Cooperative Extension Service Departments
Family and Consumer Sciences Programming
Financial Management Benchmark Data and Data Source
Financial Literacy
Bankrate.com
commissioned a survey of 1,000 Americans in early 2003. One in three (35%)
received an F grade because they failed to take enough of the 12 basic steps
the study deemed important. Only one in four scored above a C, 10% scored an A.
The steps included:
paying bills on time
reading your bank account statements regularly
making more than the minimum payments on credit cards.
preparing a will
contributing to a retirement account
comparison shopping for a mortgage
keeping an emergency fund of at least three months living
expenses
shopping around for the best insurance quotes and coverage
following a monthly budget
adjusting your W4 form annually
checking your credit report annually for accuracy
looking for and switching to credit cards with lower rates
More respondents agreed the above were important financial practices. Fewer
respondents acted.
While 71% of respondents say they feel very or somewhat satisfied with their
financial situation and 72% say they are excellent or good at handling their
money, only 59% say they feel in control when dealing with finances, and only
42% feel confident. Try the aforementioned sentences substituting driving
ability for financial ability!
More disconnects.
While 93% say it is important to pay bills on time, only 80%
said they always do it and another 17% said they sometimes do so.
Three in five said it is important to shop around for the
best insurance quotes and coverage; just 39% actually do it.
Only 76% said they shopped for the best mortgage deal, an
event where differences can add up to thousands of dollars.
Experience is a good teacher when it comes to financial
literacy.
The average age of people who scored an A was 54 years.
The average household income for the A group was $63,500.
The group takes full advantage of financial resources on the
Internet.
Keep in mind, just 10% scored an A on the quiz; 16% scored
a B.
The average age of the financial flunkies was 41 years;
average income $43,000.
Conclusion: The biggest differences between A and F groups appeared
to be mindset and good, old-fashioned discipline. The A groups plans; The F
group has spontaneous spenders. Financial flunkies say they will plan when they
get the time, cant afford an emergency fund, say making a will is depressing,
and feel finding the best mortgage deal is confusing.
Terrorism and wars are a major financial concern of the group. They fear a
weakened economy.
Financial Literacy benefits.
The A group has more savings; better interest rates on mortgages; less debt;
report more peace of mind; report more control over financial goals.
Bankrate.com financial literacy study.
Savings and Retirement
In a 1997 study conducted by the Public Agenda, only 37% of respondents
indicated that they think about retirement often. When asked how they felt about
retirement, 32% said they are looking forward to it, 11% reported they worry
about it, and almost half (46%) expressed a combination of emotions. It is
believed that such mixed feelings were driven mostly by a sense of financial
vulnerability and insecurity. Few people in the study were confident about their
retirement preparations, with slightly more than half (53%) rating their efforts
as poor or only fair. Three-quarters (76%) believed, when it comes to putting
aside money for retirement, they should be doing more.
Source: Parkas, S., Johnson, J., Bers, A., & Duffett, A
(1997). Miles to go: A status report on America' s plans for retirement, p. 9
The financial assets held by the typical Boomer are worth only $1,000, and
only one-fifth of Boomers have more than $25,000 in financial assets, i.e., the
total of their financial assets minus liabilities.
Source: AARP Public Policy Institute (1998). Boomers
approaching midlife: How secure a future? p. 28
When Boomers were asked to include anything and everything they've set aside
in any type of saving vehicle, nearly half ( 46%) report nothing or less than
$10,000 in retirement savings.
Source: Parkas, S., Johnson, J., Bers, A., & Duffett, A
(1997). Miles to go: A status report on America' s plans for retirement.
One half of American households have accumulated less than $1,000 in net
financial assets (the value of money in the bank, stocks, bonds, and other
securities after subtracting loans, credit card debt, and other secured debt)
and $35,000 in net wealth (value of all real and financial assets including home
equity , other real estate, vehicles, owned business).
Source: Consumer Federation of Anierica & Primerica
(1999)
The personal savings rate in the U. S. in 1999 declined to 2.4%, the lowest
one-year rate recorded in more than a generation. Historically the rate was
between 7% and 11 %, through 1993, but dropped to 6.1% in 1994 and has kept
falling since that time.
Source: Jackson-King, L. & Maye, N. (2000, February
14). Department of Labor and the Certified Financial Planner Board of Standards
launch new savings fitness tool for consumers.
Only 41% of Americans save regularly for any purpose.
Source: Parkas, S., Johnson, J., Bers, A., & Duffett, A
(1997). Miles to go: A status report on America's plans for retirement, p. 14.
Credit and Debt
Of the 78 million households in the U. S. that have at least one credit card,
the average balance is $7,564 and the average interest rate is 17.99%.
Source: CardTrak Online (2000)
The typical household held consumer debts that totaled well-over one-half of
gross
financial assets. One-fifth of households with the lowest net financial
assets held, by far, the highest consumer debts, most of them unsecured
(mainly credit card debt).
Source: Consumer Federation of America and Primerica,
1999
High consumer debt, especially credit card debt, is a significant reason for
low net financial assets.
Source: U. S. Census, 1995.
Almost half (47%) of American credit card users carry finance charges on
their balances
each month. In most cases, this is a factor of a consumption ethic, not an
effort to stay
out of poverty or to stretch meager financial resources.
Source: CardTrak Online, 2000.
Arkansans over the age of 45 number 1,026,813. This is 38% of the total
population.
Source:
Institute for
Economic Advancement, UALR, Census Data Center
Aging
In 1998, over half of non-metro persons age 85and older were poor or near
poor (income of 100% to 149% of poverty level), compared with only one-quarter
of those age 60-64. The oldest old are the most economically vulnerable
population and also the most in need of health, medical, and other services in
rural areas hard-pressed to provide such services.
Source: Rogers, c.c. (1999) Changes in the older
population and implications for rural areas.
Arkansas ranks 9th in the percent of residents 65 years and older.
95.8% of persons 65 and older do NOT living in nursing homes.
The U.S. ranks second (#2) among all countries in number of people 80 and
over. China ranks first.
$11,313: Median income for females 65 and over in 2001.
Arkansas ranks first (#1) among states in terms of percentage of 65 and over
with income at or below poverty.
Housing. 79.4% of those 675+ are homeowners; 45.3% of those 65 and over live
in homes that are at least 40 years old.
68.3% of Arkansans 75+ who have a drivers license.
Negative 10.55%: Percentage change in Arkansas nursing home occupancy levels
from 1992 2000. (Reflects increased supports for home care.)
Arkansas ranks fifth (#5) among states in percent of 65+ population with
mobility limitations.
Source: Aging Arkansas, February 2003.
Health Care Costs
Health Spending Makes Biggest Jump in 12 Years
Healthcare spending grew 10% from 2000 to 2001, the largest increase since
1990, according to a study released Wednesday.
Consumers Worry About Future Healthcare Costs - Survey
Americans are very pleased with the healthcare they receive in the United
States, but they are getting jittery about the cost of that care, including
insurance and prescription drugs, a new survey finds.
Source: Reuters Health Information 2002
Average daily nursing home cost in Arkansas was $100/day.
Source: MetLife April 2000.
Health care providers received a jolting wake-up call earlier this month when
a new Robert Wood Johnson Foundation report announced that one in three (75
million) non-elderly Americans were uninsured for all or part of 2001-2002.
Approximately four out of five of the uninsured were in working families.
Emergency rooms throughout America are seriously overburdened by unnecessary,
unreimbursed visits. Uninsured adults, compared with the insured, are four times
more likely to use the ER as a regular place of care. Similarly, uninsured
children are five times more likely to use the ER as a regular place of care.
Who pays when the uninsured can't?
The rate of unnecessary hospital stays for uninsured adults more than doubled
from 1980 to 1988. In 1988 an estimated 11.6% of hospital stays for uninsured
people could have been avoided if the person had received appropriate treatment
earlier. The average cost of an unnecessary hospitalization for an uninsured
adult was $3,300 in 2002.
Source: Healthwise, Inc. 2003
Bankruptcy
Bankruptcy rates increased in 2001. The number one and two reasons for filing
bankruptcy are medical costs and credit card debt.
For 2001 (latest stats) - bankruptcy:
Eastern Arkansas 13,704 cases an increase of 30% from 2000.
(Includes Batesville, Helena, Jonesboro, Little Rock, Pine Bluff)
Western Arkansas 7781 cases, an increase of 25% from 2000.
(Includes El Dorado, Fort Smith, Harrison, Texarkana, Fayetteville, Hot
Springs)
Total Eastern plus Western
21,485, an increase of 28%
Source: Bankruptcy Court, Little Rock
Poverty
Between 1999 to 2001, the rate of poverty in Arkansas was 16.3%. The rate of
poverty increased in 2000 and 2001.
Source: U.S. Census Bureau
County Data
http://www.aecf.org/cgi-bin/cliks.cgi?action=graph
http://merlot.caliper.com/maptitude/census2000maps/map.asp
Poverty Data
Prepared by Judith R. Urich, Family Resource
Management Specialist. 2003
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