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Posts Tagged ‘Investor Education Foundation’

NH’s Fiscal Responsibility Cited

Thursday, December 9th, 2010

Check out this article from yesterday’s USA Today:

In what is being billed as an unprecedented look at financial behavior in all 50 states, a study out today rates New York, New Jersey and New Hampshire as having the most fiscally responsible residents.

The Investor Education Foundation of the Financial Industry Regulatory Authority (FINRA) asked 28,000 people questions on five key issues and used the results to produce a state-by-state look at financial capability.

fiscal_responsibilityWhile consumers in New York, New Jersey and New Hampshire ranked high in all categories, the news was not as good elsewhere. People in Oklahoma and South Dakota are more likely to be struggling to make ends meet. And residents of Texas and Kentucky are less likely to comparison shop for credit cards.

Experts say the study’s findings could prove valuable. “If there has been a silver lining to the recession, it has refocused consumers’ attention on their own personal financial habits, and this will be a wonderful tool,” says Gail Cunningham of the National Foundation for Credit Counseling. “It may be another wake-up call.”

There is much financial disparity across state lines, partly related to each state’s economy, including the local housing market and unemployment rate, says Annamaria Lusardi, director of the Financial Literacy Center, which helped design the survey.

Financial knowledge is another important factor. “One of the clear problems here is an absence in financial literacy,” says FINRA Foundation CEO Rick Ketchum. It may not be the only problem, but it makes it easy for people to be misled in a variety of ways, from risky investments to costly loans, he says.

One issue measured in the state-by-state aptitude study was financial literacy, and that found people who live in New Hampshire, Minnesota and South Dakota rate higher than those who live in Kentucky, Arkansas and Tennessee. (FINRA has an interactive look at each state at usfinancialcapability.org.)

The study also examined age and gender differences and found that the young tend to rely on payday loans and advances on tax refunds rather than bank loans. They also are less likely to have emergency funds. It may not be surprising, but it’s distressing, because they are starting their careers overwhelmed by credit card and student loan debt, Lusardi says.

Way to go Granite State!!