Massachusetts Consumers’ Financial Knowledge
A Massachusetts bankruptcy lawyer is asked to file a Chapter 7 bankruptcy for his client, but also to provide financial education. In a study undertaken by the financial industry’s education arm, the Investor Education Foundation ,a survey in all 50 states revels some interesting facts about Massachusetts consumers verses the rest of the nation. For example, of the five financial literacy questions, Massachusetts’s residents answered 3.1 of them correctly; the national average was 3 questions answered correctly.
In the survey, one critical question was: in a year, do you spend more than you earn, not including buying major items such as a car or a house.
In Massachusetts, 21% of respondents said they did while the national average was 20%. It was the 18-34 year old age group that skewed this average. Another measurement they used was non-bank borrowing. This includes auto loans, payday loans and tax return advance loans. In Massachusetts, the percentage of folks with such loans is 16%; in the United States the average is significantly higher, at 24%. Rainy day funds protect folks when there is a personal financial crisis. Only 56% of Massachusetts residents have a rainy day fund while the national average is 60%. With respect to comparison-shopping, 62% of Massachusetts’s residents’ comparison shop, which is equal to the national average.
The Financial Capability Study authors claim that their findings “underscore the need to ensure all Americans have access to the education, resources and tools they need to manage their money with confidence.” They study is an attempt to find a baseline for financial capability in the US in observing how folks manage resources and make financial decisions.