Financial Capability in The United States December 2009

FINANCIAL CAPABILITY IN THE UNITED STATES
INITIAL REPORT OF RESEARCH FINDINGS

FROM THE
2009 NATIONAL SURVEY
A COMPONENT OF THE
NATIONAL FINANCIAL CAPABILITY STUDY
Prepared for the
FINRA INVESTOR EDUCATION FOUNDATION
By
APPLIED RESEARCH & CONSULTING LLC
DECEMBER 1, 2009
3 2 0 We s t 1 3 t h S t . • S e v e n t h F l o o r • N Y , N Y 1 0 0 1 4
T e l : 2 1 2 . 2 2 6 . 1 0 0 7 • F a x: 2 1 2 . 2 2 6 . 0 2 4 0
E ma i l : A r c @ A r c L L C . c o m
National Financial Capability Study 2
Initial Report, 2009 National Survey December 2009
TABLE OF CONTENTS
INTRODUCTION............................................................................................................. 3
RESEARCH OBJECTIVES ................................................................................................... 4
2009 NATIONAL SURVEY ................................................................................................ 6
METHODOLOGY – 2009 NATIONAL SURVEY ....................................................... 7
QUESTIONNAIRE DESIGN ................................................................................................. 7
PILOT TESTING ................................................................................................................ 7
FIELDING ......................................................................................................................... 7
SAMPLE ........................................................................................................................... 8
WEIGHTING ..................................................................................................................... 9
NOTE ON HOUSEHOLD INCOME AND DEMOGRAPHICS ................................................... 12
Ethnicity....................................................................................................................13
INITIAL FINDINGS – 2009 NATIONAL SURVEY .................................................. 14
SATISFACTION AND FINANCIAL MANAGEMENT ............................................................ 14
HOUSING AND MORTGAGES ........................................................................................... 19
RETIREMENT ACCOUNTS ............................................................................................... 24
CREDIT CARDS .............................................................................................................. 30
FINANCIAL LITERACY .................................................................................................... 35
INSURANCE ................................................................................................................... 42
FINANCIAL ADVISORS .................................................................................................... 45
OTHER BORROWING METHODS ...................................................................................... 48
INCOME SOURCES FOR RETIREES .................................................................................. 50
BANKING ....................................................................................................................... 51
Banked vs. Unbanked ...............................................................................................55
SUPPLEMENTAL ANALYSES ................................................................................... 56
SHOPPING AROUND........................................................................................................ 56
SELF-PERCEPTION OF FINANCIAL CAPABILITY AND BEHAVIORS..................................... 56
INTRODUCTION
In consultation with the U.S. Department of Treasury and the President’s Advisory
Council on Financial Literacy, the FINRA Investor Education Foundation commissioned
a national study of the financial capability of American adults. The purpose of this
National Financial Capability Study was to establish a baseline measure of the ability of
Americans to manage their money.
The National Financial Capability Study consists of three linked surveys:
 National Survey: A national, random-digit-dialed telephone survey of 1,488

respondents with over-sampling to enable segmentation by selected demographic
variables (e.g., ethnicity and education level)
 State-by-State Survey: A state-by-state online survey of approximately 25,000

respondents (roughly 500 per state, plus DC)
 Military Survey: An online survey of 800 military personnel and spouses
The Study was led by a multi-disciplinary team including Professor Annamaria Lusardi
of Dartmouth College, Applied Research & Consulting LLC (ARC), the FINRA Investor
Education Foundation and the Office of Financial Education of the U.S. Treasury
Department. Additional input was provided by Craig Copeland of the Employee Benefit
Research Institute (EBRI), the American Institute of Certified Public Accountants
(AICPA) and Professor Robert Willis of the University of Michigan, among others.
The report that follows presents the initial findings from the National Survey. Findings
from the State-by-State Survey and the Military Survey will be reported separately in
2010. Additionally, the datasets from these surveys will be made publicly available to
facilitate independent analyses.
RESEARCH OBJECTIVES
The overarching research objectives were to:
1. Benchmark key measures of financial capability
2. Evaluate how those key measures vary with underlying demographic, behavioral,
and attitudinal characteristics.
3. Provide data and estimates to inform public policy toward financial capability
(Note that while the survey was conducted in mid-2009, its purpose was not to measure
reactions to the financial crisis.)
The survey questionnaire was designed to encompass a wide variety of subjects and
question categories. Some questions and scales were adapted from earlier surveys, while
other questions were designed originally for this study. Following is an overview of the
main content areas of the questionnaire.
 Key measures of financial capability:

 “Banked” status (i.e., having a checking and/or savings account) and asset
ownership
 Access to and participation in pension and/or retirement savings plans
 Debt burden, with particular focus on mortgage and credit card debt
 Financial literacy measures:

 Ability to do financial calculations (e.g., compound interest)
 Understanding of financial concepts (e.g., relationship between interest rates
and bond prices)
 Financial behaviors:
 Credit card payment habits
 Mortgage financing choices
 Saving and financial planning behaviors
 Usage of expensive non-bank borrowing mechanisms
 Access to professional financial advice
 Financial attitudes:
 Personal engagement with financial matters (e.g., attention to rates and fees,
keeping up with financial news)
 Self-perceptions (e.g., satisfaction with financial condition, perception of
one’s one skills and financial knowledge)
 Preferences (e.g., appetite for risk)
 Standard demographic characteristics:

 Age and gender
 Race and ethnicity
 Education
 Household income
 Geography
 Marital status
 Employment status
Please note that all of the data collected in this survey are self-reported by the
respondents themselves and are not independently checked or corroborated by other
sources (e.g., account statements, follow-up interviews with third parties). Therefore,
while the survey can be reasonably assumed to present an accurate reflection of the U.S.
adult population’s opinions, beliefs, knowledge, and attitudes, it does not necessarily
present an accurate reflection of behaviors or of the valuations of assets and liabilities.
2009 NATIONAL SURVEY
This document is an initial report on the findings from the 2009 National Survey, one of
three surveys that collectively constitute the National Financial Capability Study. In
addition to a description of the survey methodology, this report provides totals and
demographic breakdowns of responses to nearly all of the closed-ended questions in the
survey. The demographic breaks in this report are as follows:
 Gender
 Age (18-29, 30-44, 45-59, 60+)
 Household income (less than $25,000, $25,000 to $75,000, more than $75,000)
 Ethnicity (Caucasian, African-American, Hispanic, Asian)
 Education (non-high school grad, high school grad/no college, some college,
college graduate/post-grad)
Note that for demographic breaks where cell sizes fall below 100 respondents, data are
not reported due to insufficient sample (indicated throughout the report by “--”).
METHODOLOGY – 2009 NATIONAL SURVEY
QUESTIONNAIRE DESIGN
The survey instrument was designed by Professor Annamaria Lusardi (Dartmouth

College), Applied Research & Consulting LLC (ARC), the Office of Financial Education
of the U.S. Department of the Treasury Department, and the FINRA Investor Education
Foundation. At various stages of the design process, input was provided by Craig
Copeland (Employee Benefit Research Institute (EBRI)), the American Institute of
Certified Public Accountants (AICPA), and Professor Robert Willis (University of
Michigan, former P.I. of the U.S. Health and Retirement Study), among others.
PILOT TESTING
The instrument was piloted in two separate phases.
I. In-Person Interviews
ARC conducted a series of 20 in-person interviews in which the survey instrument was
administered to respondents one-on-one by a researcher. These interviews allowed us to
identify questions that were unclear or confusing, and adjust the survey accordingly.
II. CATI Pilot
Upon completion of the questionnaire development, the survey instrument was

programmed using Computer Aided Telephone Interview (CATI) software and 100 initial
interviews were conducted over the telephone with a sample of 100 respondents obtained
through random-digit dialing (RDD). Based on feedback from these interviews, a few
minor adjustments in question wording were made, and some additional explanatory text
was added.
FIELDING
The survey was administered to respondents over the telephone by an interviewer using
CATI software. Fielding was conducted from May – July 2009.
SAMPLE
Households were contacted using standard random-digit-dialing techniques. Within each

household, the adult with the most recent birthday was selected to be interviewed, in
order to minimize selection bias. If the selected respondent was not available, an
appointment was made to conduct the interview at a later time.
 Note: The sample consists of adults randomly selected within their households.
We did not specifically target heads of households or primary financial decision-
makers.
The final sample consisted of 1,488 adults (18+) across the U.S., broken down as
follows:
Primary Sample: N = 1,200
 The primary sample was constructed to be representative of the general adult U.S.
population.
 Quotas were set to approximate Census distributions for age by gender,
income, ethnicity, education level, and region (source: 2007 American
Community Survey).
Oversamples: Minimum N = 150 per group
 To ensure sufficient respondents for analysis, oversamples were obtained for

African-Americans, Hispanics, Asians, and adults with less than high school
education, so that the total number of respondents in each of these groups reached
a minimum of 150 (including those in the primary sample).
 Loose quotas were set to ensure that none of the oversamples were too highly
concentrated within a given gender or age group.
WEIGHTING
Because of oversampling for ethnicity and education groups, the raw distributions for
these variables do not match Census distributions.
 Ethnic oversampling resulted mainly in overrepresentation of Asians.
Ethnicity Raw N Raw % 2008 ACS

White (Non-Hispanic) 952 64% 69%
Black (Non-Hispanic) 184 12% 11%
Hispanic (any race) 152 10% 13%
Asian (Non-Hispanic) 150 10% 5%
Other (Non-Hispanic; Nat. Am., 2+ races) 50 3% 2%
Total 1488 100% 100%
 In terms of education, the raw numbers show that our sample was relatively more
educated than Census distributions would predict. Even though we were able to
get over 150 respondents with less than high school education, this group was
underrepresented relative to Census population estimates, and those with college
degrees or higher were overrepresented.
Education Raw N Raw % 2008 ACS

Did not complete high school 152 10% 15%
High school graduate 411 28% 29%
Some college 431 29% 31%
College graduate 307 21% 16%
Post graduate education 187 13% 9%
Total 1488 100% 100%
Therefore, we weighted the data by ethnicity and education in order to match Census
distributions using the full sample of 1,488 respondents. Since the distribution of
education levels varies among different ethnic groups, separate education weights were
constructed for each ethnic group (i.e., the data were weighted by education within each
ethnic group, in addition to weighting the ethnic groups themselves to their representative
proportions).
[Note: Source for data on education within each ethnic group for the population 18+:
2008 Current Population Survey. We were not able to locate this data in the American
Community Survey. Note that CPS estimates differ slightly from the ACS estimates.]
Unweighted Afr.-
% of total Cauc. Amer. Hisp. Asian Other Total
Did not complete high school 6.4% 1.4% 1.6% 0.2% 0.6% 10.2%
High school graduate 18.2% 4.4% 2.9% 1.4% 0.7% 27.6%
Some college 18.9% 3.7% 3.1% 2.0% 1.3% 29.0%
College graduate 13.4% 2.2% 1.7% 3.0% 0.5% 20.6%
Post graduate education 7.1% 0.7% 0.9% 3.5% 0.3% 12.6%
Total 64.0% 12.4% 10.2% 10.1% 3.4% 100.0%
Weighted Afr.-
% of total Cauc. Amer. Hisp. Asian Other Total
Did not complete high school 6.4% 2.1% 5.0% 0.5% 0.3% 14.2%
High school graduate 21.3% 4.0% 4.0% 0.9% 0.6% 30.9%
Some college 20.0% 3.4% 2.8% 0.9% 0.7% 27.9%
College graduate 13.6% 1.4% 1.1% 1.4% 0.3% 17.9%
Post graduate education 7.0% 0.6% 0.5% 0.9% 0.1% 9.1%
Total 68.4% 11.5% 13.4% 4.6% 2.0% 100.0%
We then checked our weighted distributions against Census estimates to see whether
further weighting would be required.
As the tables below show, our weighted data approximate Census distributions on all key
demographic variables except income.
Census Divisions Raw % Weighted % 2008 ACS

Division 1: New England 5% 5% 5%
Division 2: Middle Atlantic 14% 14% 14%
Division 3: East North Central 16% 16% 15%
Division 4: West North Central 6% 7% 7%
Division 5: South Atlantic 18% 19% 19%
Division 6: East South Central 6% 6% 6%
Division 7: West South Central 10% 10% 11%
Division 8: Mountain 7% 7% 7%
Division 9: Pacific 18% 17% 16%
Total 100% 100% 100%
Gender Raw % Weighted % 2008 ACS

Male 48% 49% 49%
Female 52% 51% 51%
Total 100% 100% 100%
Age Raw % Weighted % 2008 ACS

18-24 14% 14% 13%
25-34 17% 17% 18%
35-44 19% 18% 19%
45-54 18% 19% 19%
55-64 15% 14% 15%
65+ 17% 18% 17%
Total 100% 100% 100%
Age by Gender Raw % Weighted % 2008 ACS

Male 18-24 6% 7% 7%
Male 25-34 9% 9% 9%
Male 35-44 9% 9% 9%
Male 45-54 9% 9% 10%
Male 55-64 7% 7% 7%
Male 65+ 8% 8% 7%
Female 18-24 7% 7% 6%
Female 25-34 8% 8% 9%
Female 35-44 10% 9% 9%
Female 45-54 9% 9% 10%
Female 55-64 8% 7% 8%
Female 65+ 9% 10% 10%
Total 100% 100% 100%
Ethnicity Raw % Weighted % 2008 ACS

White (Non-Hispanic) 64% 69% 69%
Black (Non-Hispanic) 12% 11% 11%
Hispanic (any race) 10% 13% 13%
Asian (Non-Hispanic) 10% 5% 5%
Other (Non-Hispanic; Nat. Am., 2+ races) 3% 2% 2%
Total 100% 100% 100%
Education Raw % Weighted % 2008 CPS

Did not complete high school 10% 14% 14%
High school graduate 28% 31% 31%
Some college 29% 28% 28%
College graduate 21% 18% 18%
Post graduate education 13% 9% 9%
Total 100% 100% 100%
[Note that CPS estimates differ slightly from ACS estimates. Because CPS data were
used to construct the education weights, we have presented them here, rather than the
ACS data.]
NOTE ON HOUSEHOLD INCOME AND DEMOGRAPHICS

Income
Neither the raw nor the weighted data approximate Census estimates at the upper and
lower ends of the income distribution. More respondents report lower incomes, and
fewer report higher incomes, than would be expected from the Census.
Income Raw % Weighted % 2008 ACS

Less than $15,000 18% 20% 13%
At least $15,000 but less than $25,000 12% 13% 11%
$150,000 or more 7% 6% 9%
Total 100% 100% 100%
Given that the survey was conducted during the recession, and that 32% of respondents
(unweighted) indicated that they had experienced a recent large drop in income, we felt
that the overall economic conditions at the time of the survey were likely to account for
why our sample appeared to have lower incomes relative to 2008 Census figures. We
therefore decided against additional weighting to match the Census on income.
It would be interesting to see if our numbers more closely match 2009 Census data, once
it becomes available.
Ethnicity
As the tables below show, ethnicity is highly correlated with income and education.
Because this report presents univariate comparisons only, it is important to keep in mind
that when looking at findings by ethnicity, income or education, there is likely to be a
considerable amount of shared variance among these three variables.
Afr.-
Income Cauc. Amer. Hisp. Asian Total
<$25K 27% 55% 52% 27% 33%
$25-75K 46% 31% 38% 37% 42%
$75K+ 28% 14% 10% 36% 24%
Afr.-
Education Cauc. Amer. Hisp. Asian Total
Less than HS 9% 18% 37% 11% 14%
HS grad 31% 35% 30% 19% 31%
Some college 29% 30% 21% 21% 28%
Coll. Grad + 30% 17% 12% 49% 27%
INITIAL FINDINGS – 2009 NATIONAL SURVEY
SATISFACTION AND FINANCIAL MANAGEMENT
The survey included several questions designed to gauge respondents’ overall views of
their financial condition, and some detailed information about their spending, saving, and
planning habits and practices.
Overall satisfaction with personal financial condition was measured on a ten-point scale.
The mean response was 5.55, very close to the precise mid-point of the scale.
Satisfaction varied by demographics, with the greatest variation occurring across
household income.
Overall, thinking of your assets, debts and savings, how satisfied are you with your
current personal financial condition? (1 = Not at all satisfied, 10 = Extremely satisfied)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Mean 5.55 5.58 5.52 5.44 5.35 5.21 6.25 4.71 5.64 6.54
Coll.
African Less than Some
Cauc. Hispanic Asian HS grad grad
Amer. HS college
+
Mean 5.69 4.95 5.30 5.88 4.72 5.41 5.49 6.22
Only one in eight respondents (12%) reported that their spending in the past year
exceeded their income. However, nearly half (49%) indicated that it was at least
somewhat difficult for them to cover their expenses and pay their bills in a typical month.
On both of these measures, the percentages were higher for African-Americans, those
without a high school diploma, those with lower household income, and young adults.
Over the past year, would you say your (household's) spending was less than, more than,
or about equal to your (household's) income?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Spending LESS than
52% 56% 49% 50% 54% 55% 49% 39% 53% 70%
income
Spending MORE than
12% 12% 11% 17% 11% 10% 9% 16% 11% 5%
income
Spending about
36% 32% 39% 33% 34% 34% 42% 44% 35% 25%
EQUAL to income
Don't know 0% 1% 0% 1% 1% 0% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Spending LESS than
56% 42% 45% 48% 36% 50% 52% 63%
income
Spending MORE than
10% 19% 10% 14% 18% 12% 12% 7%
income
Spending about
34% 39% 44% 34% 45% 37% 35% 30%
EQUAL to income
Don't know 0% 0% 1% 3% 1% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
In a typical month, how difficult is it for you to cover your expenses and pay all your
bills?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Very difficult 14% 12% 15% 14% 13% 15% 12% 27% 9% 3%
Somewhat difficult 35% 34% 37% 46% 35% 36% 26% 45% 38% 18%
Not at all difficult 51% 55% 47% 40% 51% 49% 61% 28% 53% 79%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Very difficult 11% 27% 20% 6% 30% 16% 12% 4%
Somewhat difficult 34% 39% 43% 24% 41% 40% 37% 26%
Not at all difficult 55% 34% 37% 70% 29% 44% 51% 70%
Don't know 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 1% 0% 0% 0% 0%
At the time the survey was fielded, one third (33%) of all respondents reported that their
household had experienced a large, unexpected drop in income over the past 12 months.
This measure showed somewhat less demographic variation overall than the above two
questions, but 43% of Hispanics reported experiencing a large drop in income.
In the past 12 months, have you (has your household) experienced a large drop in income
which you did not expect?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 33% 33% 34% 34% 39% 36% 25% 41% 33% 23%
No 66% 67% 65% 66% 61% 64% 75% 58% 67% 76%
Don't know 0% 0% 0% 1% 0% 0% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 1% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 31% 38% 43% 26% 39% 34% 35% 28%
No 68% 61% 57% 74% 60% 65% 65% 72%
Don't know 0% 1% 0% 0% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 1% 0% 0% 0%
Roughly half (49%) of all respondents said they had set aside 3 months of “rainy day
funds.” A smaller percentage (41%) of respondents with financially dependent children
said they were setting aside money for college. These percentages varied greatly by age,
income, race/ethnicity and education.
Have you set aside emergency or rainy day funds that would cover your expenses for 3
months, in case of sickness, job loss, economic downturn, or other emergencies?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 49% 53% 45% 31% 49% 50% 64% 26% 53% 75%
No 51% 47% 54% 68% 51% 50% 36% 74% 47% 24%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 55% 31% 31% 59% 23% 44% 49% 70%
No 44% 69% 69% 39% 77% 55% 51% 30%
Don't know 0% 0% 0% 2% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Are you setting aside any money for your children's college education? (n = 718
respondents with financially dependent children)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 41% 45% 38% 47% 45% 34% -- 20% 35% 68%
No 58% 54% 61% 52% 54% 66% -- 79% 64% 32%
Don't know 1% 0% 1% 1% 0% 1% -- 1% 1% 0%
Refused 0% 0% 0% 0% 0% 0% -- 0% 0% 0%
Coll.
Amer. HS college
+
Yes 44% -- -- -- -- 28% 41% 60%
No 55% -- -- -- -- 69% 59% 40%
Don't know 0% -- -- -- -- 2% 0% 0%
Refused 0% -- -- -- -- 1% 0% 0%
Among non-retired respondents, 42% said that they had tried to figure out how much
they needed to save for retirement. This percentage varied greatly by income and
education. Hispanics and young adults were also less likely to say they had done this
calculation.
Have you ever tried to figure out how much you need to save for retirement? (n = 1,211
non-retired respondents)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 42% 45% 39% 23% 46% 51% 50% 17% 45% 68%
No 58% 55% 60% 77% 53% 49% 48% 83% 55% 31%
Don't know 0% 0% 1% 0% 1% 0% 2% 0% 1% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 48% 38% 20% 41% 22% 28% 44% 65%
No 52% 62% 80% 58% 78% 71% 56% 35%
Don't know 1% 0% 0% 2% 0% 1% 0% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
The percentage of respondents saying they had obtained a copy of their credit reports and
had checked their credit scores over the past 12 months were 38% and 36% respectively.
The sharpest variations in these measures were by income and education.
In the past 12 months, have you obtained a copy of your credit report?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 38% 39% 37% 31% 45% 41% 33% 18% 43% 56%
No 62% 60% 63% 68% 55% 59% 67% 81% 56% 44%
Don't know 0% 0% 0% 1% 1% 0% 0% 0% 0% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 40% 39% 30% 33% 25% 30% 39% 53%
No 59% 61% 70% 65% 75% 70% 61% 46%
Don't know 0% 0% 0% 2% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
In the past 12 months, have you checked your credit score?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 36% 39% 34% 31% 44% 41% 27% 15% 42% 55%
No 64% 61% 66% 69% 56% 59% 73% 85% 57% 45%
Don't know 0% 0% 1% 1% 1% 0% 0% 0% 0% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 38% 34% 32% 37% 22% 29% 35% 53%
No 62% 66% 68% 63% 78% 71% 64% 47%
Don't know 1% 0% 0% 0% 0% 0% 1% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
HOUSING AND MORTGAGES
A central topic of the survey was home ownership and mortgages, since these comprise
such an important component of the financial condition of American households.
Overall, 61% of respondents reported owning their home. This percentage was much
lower (22%) for young adults. Home ownership also varied greatly with education and,
especially, with income. Caucasians reported a higher rate of home ownership than
African-Americans, Hispanics, or Asian-Americans.
Do you (or your spouse/partner) currently own…?

$25-
% Yes Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Your home 61% 60% 62% 22% 64% 73% 79% 34% 69% 84%
Other real estate, for
example, a second
18% 21% 16% 7% 17% 23% 25% 4% 19% 36%
home or investment
property
Part or all of a
12% 15% 9% 4% 14% 16% 12% 4% 12% 22%
business or farm
Coll.
% Yes Cauc. Hispanic Asian HS grad grad
Amer. HS college
+
Your home 69% 41% 42% 50% 45% 53% 61% 78%
Other real estate, for
example, a second
20% 12% 14% 21% 15% 13% 18% 26%
home or investment
property
Part or all of a
13% 8% 8% 12% 8% 8% 13% 17%
business or farm
Respondents were asked how recently they had bought their home and some follow-up
questions about the mortgage decision-making process were only asked of those who said
they had bought their home within the past five years.
How long ago did you buy your current home? (n = 909 homeowners)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Within the past 2
12% 11% 13% -- 18% 7% 4% 9% 12% 14%
years
3-5 years ago 16% 13% 19% -- 26% 14% 6% 13% 18% 16%
6-10 years ago 22% 23% 20% -- 35% 21% 14% 12% 24% 23%
More than 10 years
48% 50% 47% -- 20% 57% 75% 63% 45% 45%
ago
You did not purchase
1% 2% 0% -- 0% 2% 0% 2% 1% 1%
it
Don't know 0% 0% 0% -- 0% 0% 0% 1% 0% 0%
Refused 0% 0% 0% -- 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Within the past 2
12% -- -- -- -- 11% 12% 14%
years
3-5 years ago 16% -- -- -- -- 10% 18% 20%
6-10 years ago 23% -- -- -- -- 23% 22% 25%
More than 10 years
48% -- -- -- -- 55% 47% 42%
ago
You did not purchase
1% -- -- -- -- 1% 1% 0%
it
Don't know 0% -- -- -- -- 0% 0% 0%
Refused 0% -- -- -- -- 0% 0% 0%
Do you currently have a mortgage on your home? (n = 909 homeowners)

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 61% 61% 61% -- 84% 67% 34% 31% 61% 77%
No 39% 39% 39% -- 15% 33% 66% 69% 39% 22%
Don't know 0% 0% 0% -- 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% -- 1% 0% 0% 0% 0% 1%
Coll.
Amer. HS college
+
Yes 61% -- -- -- -- 54% 65% 72%
No 39% -- -- -- -- 46% 35% 28%
Don't know 0% -- -- -- -- 0% 0% 0%
Refused 0% -- -- -- -- 0% 0% 0%
Do you have a home equity loan? (n = 909 homeowners)

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 21% 21% 21% -- 27% 22% 16% 11% 20% 27%
No 77% 77% 77% -- 72% 75% 83% 87% 77% 71%
Don't know 2% 2% 2% -- 1% 3% 1% 1% 2% 1%
Refused 0% 0% 0% -- 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 23% -- -- -- -- 21% 20% 27%
No 76% -- -- -- -- 77% 78% 72%
Don't know 2% -- -- -- -- 1% 2% 1%
Refused 0% -- -- -- -- 0% 0% 0%
Among respondents with mortgages who purchased their home within the past five years,
two thirds (66%) said they compared offers from different sources. An even higher
percentage (85%) reported that they considered how much their monthly payments would
be as a percentage of their income.
Total
(n = 194 respondents with mortgages who have purchased their home within the past 5 years) % Yes
When you were getting your mortgage, did you compare offers from different lenders or
66%
mortgage brokers?
When you were getting your mortgage, did you consider how much the monthly payments
85%
would be as a percentage of your income?
Only a small minority (8%) of mortgage borrowers indicated that their mortgage had an
adjustable rate, although some (2%) didn’t know. Surprisingly, a higher percentage
(16%) stated that their mortgage was interest only or had an interest only option. [Note
that 20% of respondents answered “Don’t know” to the question about interest only
mortgages, suggesting that there may be some confusion on this issue.]
Is your mortgage a fixed-rate mortgage or an adjustable-rate mortgage? (n = 553

homeowners with mortgages)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Fixed-rate mortgage 89% 92% 87% -- 90% 92% -- -- 90% 90%
Adjustable rate -- -- --
8% 7% 10% 8% 7% 8% 9%
mortgage
Don't know 2% 1% 3% -- 2% 0% -- -- 2% 1%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Fixed-rate mortgage 90% -- -- -- -- 90% 90% 90%
Adjustable rate
8% -- -- -- -- 8% 10% 8%
mortgage
Don't know 1% -- -- -- -- 2% 1% 2%
Refused 0% -- -- -- -- 1% 0% 0%
Is this an interest-only mortgage or a mortgage with an interest-only option, or neither of

these? (n = 553 homeowners with mortgages)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes - Interest only
mortgage or interest- 16% 18% 15% -- 14% 16% -- -- 15% 17%
only option
No - Neither 63% 68% 59% -- 65% 63% -- -- 62% 69%
Don't know 20% 14% 26% -- 21% 21% -- -- 23% 14%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes - Interest only
mortgage or interest- 16% -- -- -- -- 22% 14% 15%
only option
No - Neither 65% -- -- -- -- 57% 65% 69%
Don't know 19% -- -- -- -- 21% 21% 17%
Refused 0% -- -- -- -- 0% 0% 0%
One out of six (16%) mortgage borrowers reported that they had been late with their
mortgage payments at least once in the past two years, including 10% who had been late
more than once. Only 2% said they had been involved in a foreclosure in the last two
years.
How many times have you been late with your mortgage payments in the last 2 years? (n
= 553 homeowners with mortgages)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Never 84% 87% 81% -- 80% 86% -- -- 80% 91%
Once 6% 4% 8% -- 6% 4% -- -- 8% 3%
More than once 10% 9% 11% -- 14% 8% -- -- 11% 5%
Don't know 0% 0% 1% -- 0% 1% -- -- 0% 1%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Never 86% -- -- -- -- 83% 78% 90%
Once 6% -- -- -- -- 2% 9% 6%
More than once 8% -- -- -- -- 15% 13% 4%
Don't know 0% -- -- -- -- 0% 1% 1%
Refused 0% -- -- -- -- 0% 0% 0%
Have you been involved in a foreclosure process on your home in the last 2 years?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 2% 2% 1% 1% 2% 2% 0% 1% 2% 2%
No 98% 98% 99% 99% 98% 98% 100% 99% 98% 98%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 2% 3% 1% 0% 1% 1% 3% 2%
No 98% 97% 99% 100% 99% 99% 97% 98%
Don't know 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
RETIREMENT ACCOUNTS
Measuring access to and usage of various kinds of retirement accounts was a critical
component of the survey, especially since fewer retirees in the future are expected to
have pensions and more will be expected to finance their own retirement. The questions
in this section were only asked of those respondents who are not already retired.
Past studies have shown that it is very difficult to obtain accurate information about
retirement accounts through surveys that rely solely on self-reported data, due to the fact
that many people are not familiar with all of the technical terms and distinctions used in
the retirement account category. This Financial Capability survey employed a relatively
simple sequence of “plain language” questions in an attempt to enable respondents to
distinguish among the main types of retirement accounts, without requiring them to
provide a high level of detail.
 Respondents were first asked if they had any kind of retirement plans through an
employer, “like a pension plan or a 401(k).”
 If they answered yes, they were then asked if any of these plans were the kind
where you choose how the money is invested. This was the used as a layperson’s
proxy to distinguish defined contribution (DC) plans from defined benefit (DB)
plans.
 Regardless of the answers to those first two questions, respondents were then
asked if they had any non-employer retirement accounts they had set up
themselves, “like an IRA, Keogh, SEP.”
Synthesizing the results from these questions, it can be observed that 58% of non-retired
respondents had at least one kind of retirement account. The distinctions in this measure
across income groups and education groups was extreme, ranging from 15% for lower
income respondents to 91% for higher income respondents, and from 23% for non-high
school graduates to 87% for college graduates. African-Americans (42%) and Hispanics
(36%) were also much less likely to report having some kind of retirement account than
Caucasians (65%) and Asian-Americans (64%).
Among those respondents who have a retirement plan through their employer, 72% report
having a plan that allows them to decide how the money is invested. While it is certainly
possible that some of these respondents also have access to a traditional, defined benefit
pension, it seems likely that most of these respondents will be dependent solely on
defined contribution plans and Social Security when they retire. It is instructive to look
at a trend across two age cohorts: the 30-44 year olds and the 45-59 year olds. Among
the older of these two cohorts, who are closer to retirement, 26% of those with employer-
based retirement plans report that they do not get to decide how the plan’s funds are
invested (suggesting that their plan is of the DB type). Among the younger cohort, this
percentage drops to 19%.
Do you (or your spouse/partner) have any retirement plans through a current or previous
employer, like a pension plan or a 401(k)? (n = 1,211 non-retired respondents)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 51% 51% 52% 31% 63% 57% 46% 13% 61% 83%
No 45% 46% 43% 62% 34% 40% 49% 80% 35% 16%
Don't know 4% 3% 5% 6% 4% 2% 5% 7% 4% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 57% 41% 34% 59% 22% 39% 54% 76%
No 40% 54% 57% 35% 72% 54% 43% 22%
Don't know 3% 5% 9% 6% 7% 6% 3% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Are any of these retirement plans the kind where you (or your spouse/partner) get to
choose how the money is invested? (n = 622 respondents with employer plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 72% 74% 70% -- 76% 72% -- -- 66% 83%
No 22% 21% 22% -- 19% 26% -- -- 26% 13%
Don't know 6% 5% 8% -- 6% 3% -- -- 8% 4%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes 74% -- -- -- -- 65% 68% 81%
No 20% -- -- -- -- 25% 23% 17%
Don't know 6% -- -- -- -- 10% 8% 2%
Refused 0% -- -- -- -- 0% 0% 0%
Do you (or your spouse/partner) have any other retirement accounts NOT through an
employer, like an IRA, Keogh, SEP, or any other type of retirement account that you have
set up yourself? (n = 1,211 non-retired respondents)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 28% 30% 25% 11% 29% 37% 41% 4% 27% 57%
No 70% 67% 73% 86% 70% 61% 57% 94% 71% 41%
Don't know 2% 2% 1% 3% 1% 1% 1% 2% 1% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 1%
Coll.
Amer. HS college
+
Yes 34% 14% 9% 31% 7% 14% 26% 55%
No 64% 85% 89% 66% 92% 82% 73% 43%
Don't know 1% 1% 2% 3% 1% 3% 1% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Respondents with any retirement accounts, employer-based or independent (n = 1,211

non-retired respondents)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
No retirement plans
38% 38% 38% 59% 30% 31% 33% 77% 27% 8%
of either type
Yes, at least one type
58% 58% 57% 33% 67% 67% 62% 15% 70% 91%
of plan
Undetermined 4% 4% 5% 8% 4% 2% 5% 8% 3% 1%
Coll.
Amer. HS college
+
No retirement plans
32% 53% 55% 30% 71% 49% 36% 11%
of either type
Yes, at least one type
65% 42% 36% 64% 23% 43% 61% 87%
of plan
Undetermined 3% 5% 9% 6% 6% 8% 3% 1%
Among those who say they have tried to figure out how much they need to save for
retirement, 82% have at least one retirement plan, compared to 40% of respondents who
say they have not tried to figure out how much they need for retirement.
Among respondents who have some kind of self-directed retirement plan (either through
an employer or independently), nearly four out of five (79%) said they regularly
contribute to a retirement account.
Do you (or your spouse/partner) regularly contribute to a retirement account like a

401(k) or IRA? (n = 576 respondents with self-directed plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 79% 80% 77% -- 86% 73% -- -- 74% 86%
No 20% 19% 22% -- 13% 26% -- -- 25% 13%
Don't know 1% 1% 1% -- 1% 1% -- -- 1% 1%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes 78% -- -- -- -- 70% 82% 80%
No 21% -- -- -- -- 28% 18% 19%
Don't know 1% -- -- -- -- 2% 0% 1%
Refused 0% -- -- -- -- 0% 0% 0%
Respondents with self-directed plans were asked some follow-up questions about the
allocation of their investments (e.g., percentage invested in stocks, usage of life-cycle or
target-date funds). Based on the high percentages of “Don’t know” responses and the
relative lack of variation across demographic groups, it is difficult to distinguish accurate
responses to these questions from guesses and misstatements.
How much of your (household's) retirement portfolio is invested in stocks or mutual funds
that contain stocks? (n = 576 respondents with self-directed plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
More than half 37% 42% 32% -- 39% 43% -- -- 32% 45%
Less than half 33% 33% 34% -- 30% 34% -- -- 37% 31%
None 12% 12% 12% -- 10% 12% -- -- 13% 8%
Don't know 17% 13% 21% -- 20% 11% -- -- 17% 17%
Refused 0% 1% 0% -- 0% 0% -- -- 1% 0%
Coll.
Amer. HS college
+
More than half 40% -- -- -- -- 33% 35% 42%
Less than half 33% -- -- -- -- 34% 35% 30%
None 10% -- -- -- -- 20% 14% 8%
Don't know 18% -- -- -- -- 12% 16% 20%
Refused 0% -- -- -- -- 0% 1% 0%
Are your (household's) retirement assets primarily invested in a life-cycle or target-date

fund? (n = 576 respondents with self-directed plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 22% 29% 16% -- 23% 22% -- -- 23% 21%
No 40% 44% 37% -- 32% 48% -- -- 39% 40%
Don't know 37% 28% 47% -- 45% 30% -- -- 37% 39%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes 23% -- -- -- -- 26% 19% 23%
No 40% -- -- -- -- 35% 43% 39%
Don't know 38% -- -- -- -- 39% 37% 38%
Refused 0% -- -- -- -- 0% 1% 0%
Respondents with self-directed retirement accounts who did not indicate that they used
life-cycle or target-date funds were asked how frequently they rebalanced the investments
in their retirement accounts. The distribution of responses was fairly uniform, ranging
from never to at least once a year.
How often do you (or your spouse/partner) change or rebalance the investments in your
(household's) retirement account(s)? (n = 446 respondents not in life-cycle fund)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
At least once a year 31% 33% 29% -- 32% 29% -- -- 27% 36%
Once every few years 19% 21% 17% -- 16% 21% -- -- 15% 21%
Rarely 29% 31% 27% -- 31% 32% -- -- 34% 25%
Never 18% 12% 24% -- 20% 12% -- -- 22% 14%
Don't know 3% 2% 3% -- 1% 5% -- -- 2% 4%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
At least once a year 33% -- -- -- -- -- 25% 36%
Once every few years 18% -- -- -- -- -- 19% 19%
Rarely 29% -- -- -- -- -- 38% 26%
Never 17% -- -- -- -- -- 16% 16%
Don't know 3% -- -- -- -- -- 2% 3%
Refused 0% -- -- -- -- -- 0% 0%
Finally, respondents with self-directed retirement accounts were asked if they had taken a
loan or a hardship withdrawal from their accounts over the last 12 months. Nearly one in
ten (9%) said they had taken a loan and 5% reported having taken a hardship withdrawal.
In the last 12 months, have you (or your spouse/partner) taken a loan from your
retirement account(s)? (n = 576 respondents with self-directed plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 9% 7% 11% -- 10% 9% -- -- 10% 7%
No 91% 93% 89% -- 90% 91% -- -- 90% 93%
Don't know 0% 0% 0% -- 0% 0% -- -- 0% 0%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes 7% -- -- -- -- 12% 11% 6%
No 93% -- -- -- -- 88% 89% 94%
Don't know 0% -- -- -- -- 0% 0% 0%
Refused 0% -- -- -- -- 0% 0% 0%
In the last 12 months, have you (or your spouse/partner) taken a hardship withdrawal
from your retirement account(s)? (n = 576 respondents with self-directed plans)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 5% 3% 6% -- 4% 5% -- -- 8% 2%
No 95% 97% 93% -- 95% 94% -- -- 92% 98%
Don't know 0% 0% 1% -- 1% 0% -- -- 1% 0%
Refused 0% 0% 0% -- 0% 0% -- -- 0% 0%
Coll.
Amer. HS college
+
Yes 4% -- -- -- -- 6% 6% 3%
No 95% -- -- -- -- 93% 94% 96%
Don't know 0% -- -- -- -- 1% 0% 0%
Refused 0% -- -- -- -- 0% 0% 0%
CREDIT CARDS
Respondents were asked some questions about their usage of credit cards, with particular
attention paid to understanding their payment habits.
Overall, 68% of respondents reported having at least one credit card, with 26% reporting
they had at least four credit cards. Young adults were much less likely to have any credit
cards than those who were 30 and above, and African-Americans and Hispanics were less
likely to have credit cards than Caucasians and Asian-Americans. A majority of people
with household incomes under $25,000 and a majority of those without a high school
diploma reported having no credit cards.
How many credit cards do you have? Please include store and gas station credit cards
but NOT debit cards.
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
1 16% 17% 14% 15% 14% 15% 18% 15% 18% 13%
2-3 26% 27% 25% 22% 28% 25% 28% 13% 33% 32%
4-8 23% 23% 23% 10% 25% 31% 23% 10% 23% 41%
9-12 2% 2% 3% 1% 3% 3% 2% 0% 3% 4%
13-20 1% 0% 1% 0% 1% 1% 1% 0% 1% 2%
More than 20 0% 1% 0% 0% 0% 1% 1% 0% 1% 1%
No credit cards 31% 28% 33% 51% 26% 23% 26% 61% 20% 6%
Don't know 1% 1% 1% 1% 1% 0% 1% 0% 1% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
1 16% 17% 14% 15% 13% 14% 19% 15%
2-3 27% 21% 21% 37% 17% 25% 28% 30%
4-8 25% 12% 20% 23% 11% 17% 25% 34%
9-12 3% 1% 3% 4% 1% 2% 2% 4%
13-20 1% 1% 0% 0% 0% 0% 0% 2%
More than 20 1% 0% 0% 0% 0% 0% 1% 1%
No credit cards 26% 49% 42% 19% 57% 41% 24% 12%
Don't know 1% 1% 0% 2% 0% 1% 1% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Respondents with at least one credit card vs. no credit cards

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
One or more credit 68% 71% 66% 48% 73% 76% 73% 39% 78% 92%
card
No credit cards 31% 28% 33% 51% 26% 23% 26% 61% 20% 6%
Coll.
Amer. HS college
+
One or more credit 73% 50% 58% 79% 43% 58% 76% 86%
card
No credit cards 26% 49% 42% 19% 57% 41% 24% 12%
Excluding individuals who are “unbanked” (i.e., have neither a checking account nor a
savings account), 23% of respondents reported having no credit cards (see comparison of
banked to unbanked respondents later in this report).
A little more than half (54%) of cardholders said that they always paid their credit cards
in full over the past 12 months. Roughly half (51%) said they sometimes carried over a
balance and were charged interest. Note that a small percentage of respondents answered
yes to both of these questions, suggesting that they may have been confused about the
meaning of “paying in full.”
Cardholders in the older age range (60+) were much more likely to pay in full every
month than younger cardholders. Cardholders in the middle age ranges (30-59) were
slightly less likely to pay in full every month and slightly more likely to carry over a
balance.
More than a quarter (29%) of cardholders said that in some months they only paid the
minimum. Younger adult cardholders (41%) and lower income cardholders (36%) were
somewhat more likely to report this. Very few cardholders reported being charged over
the limit fees (8%) or using their cards for cash advances (8%).
In the past 12 months, which of the following describes your experience with credit
cards? (n = 1,018 respondents with credit cards)
$25-
75K
I always paid my
54% 56% 52% 51% 45% 44% 75% 54% 52% 55%
credit cards in full
In some months, I
carried over a balance
51% 50% 52% 46% 62% 58% 33% 47% 52% 51%
and was charged
interest
In some months, I
paid the minimum 29% 25% 32% 41% 35% 31% 11% 36% 30% 22%
payment only
In some months, I
was charged a late fee 23% 20% 26% 24% 27% 29% 11% 26% 25% 19%
for late payment
In some months, I
was charged an over
the limit fee for 8% 6% 9% 14% 8% 9% 2% 12% 8% 4%
exceeding my credit
line
In some months, I
used the cards for a 8% 10% 7% 11% 10% 8% 5% 12% 8% 6%
cash advance
Coll.
Amer. HS college
+
I always paid my
56% -- -- 73% -- 55% 52% 58%
credit cards in full
In some months, I
carried over a balance
50% -- -- 27% -- 51% 52% 49%
and was charged
interest
In some months, I
paid the minimum 26% -- -- 12% -- 35% 32% 21%
payment only
In some months, I
was charged a late fee 21% -- -- 11% -- 26% 24% 19%
for late payment
In some months, I
was charged an over
the limit fee for 7% -- -- 2% -- 9% 9% 4%
exceeding my credit
line
In some months, I
used the cards for a 6% -- -- 6% -- 11% 7% 6%
cash advance
Cardholders who said they didn’t always pay their balance in full were asked for the
approximate interest rate on the card where they had the largest balance. Cardholders
who said they did always pay in full were asked for the rate on the card they used most
often. The open-ended numeric responses to these questions require more processing and
analysis before they can be reported, but it is interesting to look at the percentage of
cardholders who said they did not know the answer. Among cardholders who don’t
always pay their balance in full, 12% said they didn’t know their interest rate. Not
surprisingly, among those who do pay their balances in full, many (36%) said they didn’t
know the interest rate on the card they use most often.
Approximately what interest rate do you pay on the card where you have the largest
balance? (n = 471 respondents who do not pay in full each month)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Don't know 12% 13% 12% -- 12% 11% -- -- 11% 10%
Coll.
Amer. HS college
+
Don't know 10% -- -- -- -- 15% 12% 11%
Approximately what is the interest rate on the card you use most often? (n = 546
respondents who pay in full each month)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Don't know 36% 31% 41% -- 25% 21% 55% 43% 32% 37%
Coll.
Amer. HS college
+
Don't know 37% -- -- -- -- 38% 34% 35%
Unlike some other financial products, when it comes to credit cards, most respondents
indicated that they don’t “shop around.” Only 34% of cardholders said they collected
information about different cards from more than one company for comparison purposes
when they last obtained a credit card.
Thinking about when you obtained your most recent credit card, did you collect
information about different cards from more than one company in order to compare
them? (n = 1,018 respondents with credit cards)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 34% 38% 30% 45% 37% 34% 25% 29% 33% 39%
No 63% 59% 67% 54% 59% 64% 72% 70% 64% 57%
Don't know 2% 2% 2% 1% 3% 2% 2% 1% 2% 4%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 34% -- -- 49% -- 27% 38% 36%
No 64% -- -- 48% -- 69% 60% 62%
Don't know 2% -- -- 3% -- 4% 2% 2%
Refused 0% -- -- 0% -- 0% 0% 0%
FINANCIAL LITERACY
A core component of the financial capability survey was a battery of self-assessment

questions on financial literacy and competence, followed by a series of quiz-style
questions designed to yield an independent, objective assessment of the respondent’s
financial literacy.
In general, the self-assessment questions revealed that most respondents believe

themselves to be highly competent and knowledgeable. Using seven-point agree/disagree
scales, roughly three quarters of respondents agreed (5, 6, or 7 on the scale) that they
were good at dealing with day-to-day financial matters and that they were pretty good at
math. Also, 70% assessed their overall financial knowledge at the higher end (5, 6, or 7)
of a seven-point scale.
I am good at dealing with day-to-day financial matters, such as checking accounts, credit
and debit cards, and tracking expenses.
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Disagree 1-3 13% 12% 13% 16% 12% 13% 10% 21% 9% 7%
Neutral 4 12% 13% 11% 14% 13% 9% 12% 17% 11% 7%
Agree 5-7 75% 75% 76% 69% 75% 78% 78% 62% 80% 86%
Don’t know 0% 0% 0% 0% 0% 0% 1% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Cauc. Hispanic Asian HS grad Grad
Amer. HS college
+
Disagree 1-3 11% 18% 18% 8% 24% 17% 8% 7%
Neutral 4 10% 16% 17% 14% 15% 16% 10% 7%
Agree 5-7 79% 66% 65% 77% 61% 67% 82% 86%
Don’t know 0% 0% 0% 1% 0% 0% 0% 0%
Refused 0% 1% 0% 0% 0% 0% 0% 0%
I am pretty good at math.

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Disagree 1-3 12% 8% 15% 14% 11% 13% 9% 16% 10% 8%
Neutral 4 11% 11% 11% 10% 8% 11% 15% 15% 10% 8%
Agree 5-7 77% 81% 73% 76% 81% 76% 75% 68% 80% 85%
Don’t know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Disagree 1-3 12% 14% 10% 7% 19% 14% 9% 8%
Neutral 4 12% 11% 9% 7% 12% 14% 12% 6%
Agree 5-7 76% 75% 81% 85% 69% 72% 79% 86%
Don’t know 0% 0% 0% 1% 0% 0% 0% 0%
Refused 0% 1% 0% 0% 0% 0% 0% 0%
I regularly keep up with economic and financial news.

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Disagree 1-3 20% 18% 22% 26% 24% 15% 17% 26% 20% 12%
Neutral 4 18% 16% 21% 21% 18% 16% 18% 24% 18% 11%
Agree 5-7 61% 66% 57% 53% 58% 68% 65% 49% 61% 78%
Don’t know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Disagree 1-3 19% 23% 26% 15% 27% 26% 20% 10%
Neutral 4 17% 22% 22% 13% 22% 23% 18% 10%
Agree 5-7 63% 55% 52% 72% 50% 51% 61% 79%
Don’t know 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 1% 0% 0% 0% 0% 0% 0%
On a scale from 1 to 7, where 1 means very low and 7 means very high, how would you
assess your overall financial knowledge?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Low 1-3 13% 13% 14% 17% 15% 10% 12% 24% 9% 8%
Neutral 4 16% 17% 16% 23% 15% 16% 12% 19% 17% 10%
High 5-7 70% 70% 70% 60% 69% 74% 75% 56% 74% 83%
Don’t know 0% 0% 0% 0% 0% 0% 1% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Low 1-3 12% 19% 16% 12% 23% 17% 11% 7%
Neutral 4 15% 16% 22% 19% 19% 16% 19% 12%
High 5-7 73% 64% 62% 69% 57% 66% 70% 81%
Don’t know 0% 1% 0% 1% 1% 1% 0% 0%
Refused 0% 1% 0% 0% 0% 0% 0% 0%
[Note: Responses to the four self-assessment questions are only moderately correlated
with each other (correlation coefficients range from .28 – .39).]
The literacy quiz section of the survey revealed, however, that many respondents had
difficulty with basic financial concepts and that only a small minority of respondents
were able to answer a moderately challenging question correctly.
Less than two thirds of respondents (64%) were able to correctly identify that the money
in an account earning 1% interest during a year with 2% inflation would be able to buy
less than today. This question was answered correctly by
 58% of women
 43% of young adults
 51% of those with low household incomes
 56% of African-Americans
 42% of Hispanics
 46% of those without a high school diploma
Only one in five respondents (21%) knew that if interest rates rise, bond prices will
typically fall.
Imagine that the interest rate on your savings account was 1% per year and inflation was
2% per year. After 1 year, how much would you be able to buy with the money in this
account?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
More than today 11% 10% 12% 19% 13% 8% 5% 13% 11% 9%
Exactly the same 9% 8% 10% 14% 9% 8% 7% 12% 8% 6%
Less than today 64% 71% 58% 43% 65% 73% 73% 51% 68% 77%
Don't know 14% 10% 18% 24% 12% 10% 13% 23% 12% 5%
Refused 1% 1% 2% 1% 2% 1% 2% 1% 1% 2%
Coll.
Amer. HS college
+
More than today 10% 13% 15% 16% 8% 14% 9% 12%
Exactly the same 7% 13% 18% 4% 16% 11% 6% 6%
Less than today 70% 56% 42% 70% 46% 57% 72% 75%
Don't know 13% 17% 21% 9% 29% 16% 13% 5%
Refused 1% 1% 4% 1% 0% 2% 1% 2%
If interest rates rise, what will typically happen to bond prices?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
They will rise 20% 23% 17% 22% 18% 21% 18% 18% 19% 22%
They will fall 21% 26% 16% 12% 24% 26% 20% 13% 21% 31%
They will stay the
6% 5% 7% 5% 5% 8% 8% 8% 6% 4%
same
There is no
relationship between
18% 17% 18% 24% 19% 12% 16% 19% 19% 14%
bond prices and the
interest rate
Don't know 34% 28% 40% 36% 32% 31% 38% 40% 33% 28%
Refused 1% 1% 1% 1% 2% 1% 1% 1% 1% 2%
Coll.
Amer. HS college
+
They will rise 17% 24% 26% 22% 19% 18% 21% 21%
They will fall 24% 11% 11% 28% 11% 16% 23% 30%
They will stay the
6% 11% 6% 7% 7% 8% 7% 3%
same
There is no
relationship between
16% 23% 22% 15% 17% 20% 16% 17%
bond prices and the
interest rate
Don't know 36% 29% 32% 27% 44% 36% 33% 28%
Refused 1% 1% 3% 2% 0% 2% 1% 2%
Suppose you had $100 in a savings account and the interest rate was 2% per year. After
5 years, how much do you think you would have in the account if you left the money to
grow?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
More than $102 65% 71% 59% 59% 69% 68% 61% 53% 67% 77%
Exactly $102 11% 10% 13% 12% 12% 11% 9% 13% 11% 9%
Less than $102 9% 8% 10% 12% 6% 8% 11% 12% 9% 7%
Don't know 13% 10% 17% 16% 11% 11% 17% 22% 11% 7%
Refused 1% 1% 2% 1% 1% 1% 2% 1% 1% 1%
Coll.
Amer. HS college
+
More than $102 67% 62% 56% 68% 51% 58% 68% 78%
Exactly $102 11% 14% 10% 6% 9% 13% 13% 9%
Less than $102 8% 12% 12% 13% 14% 11% 7% 7%
Don't know 13% 12% 19% 12% 25% 17% 11% 6%
Refused 1% 1% 3% 1% 0% 2% 1% 1%
A 15-year mortgage typically requires higher monthly payments than a 30-year

mortgage, but the total interest paid over the life of the loan will be less.
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
True 70% 75% 66% 62% 77% 76% 64% 51% 77% 85%
False 16% 16% 16% 19% 14% 15% 16% 24% 12% 11%
Don't know 12% 8% 17% 18% 7% 8% 19% 24% 9% 3%
Refused 1% 1% 1% 1% 2% 1% 1% 1% 1% 1%
Coll.
Amer. HS college
+
True 75% 56% 60% 73% 57% 61% 74% 84%
False 13% 26% 23% 11% 23% 18% 15% 11%
Don't know 11% 16% 14% 14% 20% 18% 10% 4%
Refused 1% 1% 3% 2% 0% 2% 1% 2%
Buying a single company's stock usually provides a safer return than a stock mutual fund.
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
True 13% 16% 11% 18% 13% 11% 12% 18% 11% 11%
False 52% 57% 47% 40% 53% 61% 51% 34% 54% 72%
Don't know 34% 26% 41% 41% 32% 27% 37% 47% 33% 16%
Refused 1% 1% 1% 1% 2% 1% 1% 1% 1% 1%
Coll.
Amer. HS college
+
True 10% 25% 20% 12% 14% 19% 12% 8%
False 56% 43% 38% 60% 38% 36% 55% 75%
Don't know 34% 32% 39% 26% 48% 43% 32% 16%
Refused 1% 1% 3% 2% 0% 2% 1% 2%
As the tables below show, on average, respondents answered 2.72 of the five financial
literacy quiz questions correctly and 1.14 of them incorrectly, and selected the “Don’t
know” option 1.08 times.
On average, men (3.00) gave more correct answers than women (2.46), but there was no
discernible difference between the sexes in the average number of incorrect answers.
Young adults performed worst among the age cohorts, both in terms of their low average
number of correct responses (2.16) and their high average number of incorrect responses
(1.45). The highest performing age cohort, in terms of average number of correct
responses, was the 45 to 59 year olds (3.04).
The sharpest distinctions in financial literacy quiz performance appeared across income
and education groups. Both the high-income group and the college graduate group
averaged 3.42 correct answers and averaged less than 1 incorrect answer.
African-Americans and Hispanics scored lower than Caucasians and Asian-Americans.

Hispanics had the lowest average number of correct answers (2.07) among ethnic/racial
groups. African-Americans had the highest average number of incorrect answers (1.61)
among ethnic/racial groups.
Average across all five quiz questions

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Correct answers 2.72 3.00 2.46 2.16 2.88 3.04 2.69 2.02 2.88 3.42
Incorrect answers 1.14 1.13 1.14 1.45 1.09 1.04 1.02 1.38 1.07 0.93
Don’t know answers 1.08 0.81 1.33 1.34 0.94 0.88 1.22 1.55 0.99 0.58
Coll.
Amer. HS college
+
Correct answers 2.91 2.28 2.07 2.99 2.03 2.29 2.91 3.42
Incorrect answers 0.98 1.61 1.52 1.07 1.28 1.32 1.07 0.92
Don’t know answers 1.07 1.06 1.25 0.87 1.67 1.31 0.99 0.59
INSURANCE
The survey included a small number of questions about insurance, including a basic
inventory of which kinds of insurance respondents were covered by. The inventory
consisted of health, homeowner’s/renter’s, life, and auto insurance. Of these, the most
prevalent were auto insurance and health insurance, with 85% and 81% of respondents,
respectively, having reported being covered by them.
Young adults, those with low household incomes, Hispanics, and those without a high
school diploma were least likely to report being covered by health insurance. The
prevalence of life insurance and homeowner’s/renter’s insurance were very highly
correlated with household income and education.
Are you covered by health insurance?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 81% 79% 82% 65% 78% 84% 93% 61% 87% 97%
No 19% 21% 17% 35% 22% 16% 7% 38% 13% 3%
Don't know 0% 0% 0% 0% 0% 0% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 86% 71% 64% 82% 61% 77% 82% 94%
No 14% 28% 36% 17% 39% 23% 18% 6%
Don't know 0% 1% 0% 1% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Do you have homeowner's or renter's insurance?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 68% 66% 69% 31% 74% 78% 82% 36% 78% 92%
No 32% 33% 30% 67% 26% 22% 18% 62% 21% 7%
Don't know 1% 0% 1% 2% 1% 0% 0% 2% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 77% 51% 42% 56% 44% 59% 72% 86%
No 23% 48% 56% 41% 55% 40% 27% 14%
Don't know 0% 1% 2% 3% 1% 1% 1% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Do you have a life insurance policy?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 62% 62% 62% 32% 66% 73% 72% 35% 68% 87%
No 37% 38% 37% 67% 34% 26% 28% 63% 31% 12%
Don't know 1% 0% 1% 2% 0% 1% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 67% 63% 39% 60% 38% 55% 64% 80%
No 33% 37% 61% 37% 61% 44% 35% 19%
Don't know 1% 1% 0% 3% 0% 1% 1% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Do you have auto insurance?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 85% 88% 83% 72% 90% 90% 87% 65% 95% 97%
No 14% 12% 17% 28% 10% 10% 13% 35% 5% 3%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 92% 66% 72% 84% 65% 81% 90% 96%
No 8% 34% 28% 16% 35% 18% 10% 4%
Don't know 0% 1% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
Half of those respondents who reported having at least one of the four kinds of insurance
said they reviewed their insurance coverage at least once a year. One in seven (14%) of
those respondents said they never reviewed their coverage.
How often do you review your insurance coverage? (n = 1,406 respondents with some
kind of insurance)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
At least once a year 50% 51% 49% 50% 53% 49% 48% 45% 52% 52%
Once every few years 18% 18% 18% 10% 19% 21% 20% 11% 19% 25%
Rarely 17% 17% 17% 18% 15% 19% 15% 19% 17% 14%
Never 14% 13% 15% 21% 14% 10% 15% 23% 11% 9%
Don't know 1% 1% 1% 1% 0% 0% 1% 1% 0% 1%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
At least once a year 50% 47% 56% 40% 50% 47% 56% 47%
Once every few years 20% 18% 8% 14% 10% 14% 16% 29%
Rarely 17% 16% 14% 20% 12% 19% 18% 16%
Never 12% 17% 21% 26% 26% 19% 10% 8%
Don't know 0% 2% 1% 0% 1% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0%
FINANCIAL ADVISORS
The survey asked a few questions about respondents’ experience working with financial
professionals, along with some attitudes towards financial professionals.
More than half (55%) of respondents said they had asked for advice from a financial
professional over the last five years. The most common types of advice reported being
asked for were advice about savings and investments (32%) and insurance (32%).
The groups least likely to have asked for advice from a professional were those with low
household incomes (32%) and those without a high school diploma (32%). Hispanics
(38%) were less likely than other ethnic/racial groups to have asked for professional
advice.
In the last 5 years, have you asked for any advice from a financial professional about any
of the following?
$25-
75K
Debt counseling 7% 7% 8% 6% 10% 8% 6% 6% 10% 6%
Savings or
32% 32% 32% 19% 34% 37% 34% 13% 36% 51%
investments
Taking out a
23% 23% 23% 21% 34% 23% 11% 10% 26% 34%
mortgage or a loan
Insurance of any type 32% 30% 34% 24% 41% 36% 26% 16% 37% 47%
Tax planning 20% 21% 18% 12% 25% 23% 17% 8% 18% 39%
Total: Yes to any of
55% 55% 55% 43% 63% 60% 50% 32% 63% 73%
the above
Coll.
Amer. HS college
+
Debt counseling 7% 11% 7% 7% 5% 6% 9% 9%
Savings or
36% 22% 20% 28% 13% 21% 36% 51%
investments
Taking out a
25% 14% 21% 20% 16% 17% 25% 31%
mortgage or a loan
Insurance of any type 34% 35% 22% 29% 19% 23% 39% 44%
Tax planning 22% 12% 13% 26% 11% 12% 22% 32%
Total: Yes to any of
59% 48% 38% 55% 32% 43% 63% 72%
the above
Only a little more than half (56%) of those who have worked with a financial
professional said that they typically met or talked with more than one advisor before
making a choice. Interestingly, the percentage who said they did “shop around” in this
way declined with age from 66% for young adults to 43% for those 60 and above.
Typically, when looking for a financial professional, do you meet with or talk to more
than one advisor before making a choice? (n = 816 respondents who have used a
financial professional in past 5 years)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 56% 58% 53% 66% 56% 59% 43% 57% 54% 58%
No 43% 40% 45% 33% 43% 39% 55% 42% 45% 40%
Don't know 1% 1% 1% 1% 1% 2% 1% 1% 1% 2%
Refused 0% 0% 0% 0% 0% 0% 1% 0% 1% 0%
Coll.
Amer. HS college
+
Yes 53% -- -- -- -- 56% 56% 53%
No 45% -- -- -- -- 43% 43% 44%
Don't know 1% -- -- -- -- 1% 1% 2%
Refused 1% -- -- -- -- 0% 0% 1%
A minority of 15% of respondents claimed that they had checked an advisor’s

background or credentials with a state or federal regulator.
Have you ever checked with a state or federal regulator regarding the background,
registration, or license of a financial professional? (n = 816 respondents who have used
a financial professional in past 5 years)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 15% 14% 16% 16% 15% 15% 12% 14% 14% 16%
No 85% 86% 84% 84% 84% 85% 87% 86% 85% 84%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 13% -- -- -- -- 13% 12% 17%
No 87% -- -- -- -- 87% 88% 83%
Don't know 0% -- -- -- -- 0% 0% 0%
Refused 0% -- -- -- -- 0% 0% 0%
In general, respondents were somewhat more likely to agree that “financial professionals
are too expensive for me” (40%) than to agree that “it is hard to find the right financial
professional” (30%). Only 32% agreed to the statement “I would trust financial
professionals and accept what they recommend.”
How strongly do you agree or disagree with the following statements?

$25-
% Agree (5-7) Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
I would trust financial
professionals and
32% 29% 35% 38% 35% 27% 29% 34% 30% 33%
accept what they
recommend
Financial
professionals are too 40% 36% 43% 41% 46% 40% 31% 46% 41% 30%
expensive for me
It is hard to find the
right financial 30% 29% 31% 35% 31% 31% 25% 32% 29% 30%
professional for me
Coll.
% Agree (5-7) Cauc. Hispanic Asian HS grad grad
Amer. HS college
+
I would trust financial
professionals and
32% 33% 33% 35% 32% 28% 35% 34%
accept what they
recommend
Financial
professionals are too 39% 41% 42% 47% 39% 43% 42% 33%
expensive for me
It is hard to find the
right financial 29% 31% 34% 38% 36% 27% 29% 32%
professional for me
OTHER BORROWING METHODS
The survey included a battery of items designed to measure the incidence in the adult
U.S. population of the usage of a variety of alternative borrowing mechanisms that
typically charge much higher interest rates than are charged on bank loans. For each of
the five types of borrowing methods, fewer than 10% of respondents overall indicated
having used it in the past five years. African-Americans were the ethnic/racial group
most likely to have used refund anticipation loans (13%) and pawn shops (17%).
Hispanics were the most likely to have used payday loans (11%).
Please tell me if you've done any of the following in the past 5 years.
$25-
75K
Have you taken out
7% 7% 7% 7% 10% 7% 4% 5% 7% 10%
an auto title loan?
Have you taken out a
short term "payday" 5% 5% 5% 8% 7% 4% 2% 6% 6% 2%
loan?
Have you gotten an
advance on your tax
refund? This is
sometimes called a
8% 7% 8% 12% 11% 4% 3% 12% 7% 3%
"refund anticipation
loan" or "Rapid
Refund." (Note not e-
filing)
Have you used a
8% 9% 8% 19% 9% 6% 1% 16% 7% 1%
pawn shop?
Have you used a rent-
5% 4% 5% 10% 5% 3% 0% 8% 4% 1%
to-own store?
Coll.
Amer. HS college
+
Have you taken out
8% 4% 6% 2% 5% 6% 9% 7%
an auto title loan?
Have you taken out a
short term "payday" 4% 5% 11% 1% 8% 6% 6% 2%
loan?
Have you gotten an
advance on your tax
refund? This is
sometimes called a
6% 13% 9% 5% 13% 9% 8% 4%
"refund anticipation
loan" or "Rapid
Refund." (Note not e-
filing)
Have you used a
6% 17% 11% 4% 16% 11% 7% 3%
pawn shop?
Have you used a rent-
4% 10% 4% 1% 7% 6% 4% 1%
to-own store?
There were only modest degrees of overlap in the usage of these five different borrowing
methods. Overall, while 23% of respondents engaged in at least one of these methods
over the past five years, only 7% had engaged in two or more of them, and only 2% had
engaged in three or more.
Number of alternative borrowing methods used in past five years

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
None 77% 77% 76% 64% 71% 79% 91% 69% 79% 84%
1 16% 16% 16% 20% 19% 18% 8% 20% 14% 16%
2 5% 5% 5% 11% 7% 3% 1% 9% 5% 1%
3 1% 1% 1% 3% 1% 0% 0% 1% 1% 0%
4 0% 0% 0% 1% 0% 0% 0% 1% 0% 0%
5 0% 0% 0% 0% 1% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
None 79% 65% 74% 90% 65% 75% 75% 86%
1 16% 23% 14% 8% 22% 17% 18% 11%
2 4% 8% 10% 3% 11% 6% 5% 2%
3 1% 3% 0% 0% 2% 1% 1% 0%
4 0% 1% 1% 0% 0% 1% 0% 0%
5 0% 0% 0% 0% 0% 1% 0% 0%
INCOME SOURCES FOR RETIREES

The survey included a section of questions that were directed specifically to retirees and
non-working spouses of retirees. Overall, 19% of the survey sample fell into this
category. Not surprisingly, most of the respondents in this sub-population were 60 and
above.
Retirement status
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Non-retired
81% 83% 80% 100% 100% 95% 30% 79% 78% 90%
household
Retired household 19% 17% 20% 0% 0% 5% 70% 21% 22% 10%
Coll.
Amer. HS college
+
Non-retired
78% 81% 95% 87% 81% 78% 82% 85%
household
Retired household 22% 19% 5% 13% 19% 22% 18% 15%
By far the most common sources of income reported by retirees were Social Security
payments (81%) and pension plan payments (63%). Only a minority of retirees relied on
any other specific source of income. The number of retirees in the sample is sufficient to
report results by gender, but not by the other demographic groupings.
Which of the following are you (and your spouse/partner) using for your living expenses?
(n = 277 retired households)
% Yes Total Male Female
Social Security retirement payments 81% 81% 82%
Pension plan payments 63% 71% 57%
Withdrawals from savings, investments, or retirement accounts 26% 30% 23%
Dividends or interest income from savings, investments, or retirement accounts 23% 34% 15%
Salary, wages, or self-employment income 17% 20% 15%
Rental income or proceeds from a sale of real estate 12% 15% 9%
Financial support from family 3% 3% 4%
Payments from a reverse mortgage 1% 0% 1%
BANKING
The survey included some basic questions about usage of bank accounts, with a series of
follow-up questions designed specifically for the “unbanked” (i.e., those without any kind
of depository account).
Among all respondents, 85% reported having a checking account and 72% reported
having a savings account, money market account, or CDs. Not surprisingly, there was a
great deal of overlap between those with checking accounts and those with other types of
bank accounts. For example, 55% of Hispanic respondents reported having a non-
checking type of bank account (i.e., a savings account, money market account, or CDs).
However, the great majority of these respondents also reported having a checking
account. Very few (5%) Hispanics reported that their only bank accounts were non-
checking accounts.
Combining the responses to these two questions, it could be determined that 12% of all
respondents were unbanked (lacking both checking and non-checking accounts). The
unbanked represent considerably higher percentages of certain demographic groups:
 Young adults (22%)

 Lower income households (31%)
 African-Americans (28%)
 Hispanics (30%)
 Non-high school graduates (36%)
Do you (Does your household) have a checking account?

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 85% 86% 83% 72% 86% 88% 91% 63% 95% 98%
No 15% 14% 16% 28% 14% 12% 8% 37% 5% 2%
Don't know 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 1% 1% 0% 0%
Coll.
Amer. HS college
+
Yes 91% 65% 65% 95% 62% 79% 91% 97%
No 8% 35% 35% 4% 38% 21% 8% 3%
Don't know 0% 0% 0% 1% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 1% 0%
Do you (Does your household) have a savings account, money market account, or CDs?
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 72% 74% 69% 62% 74% 73% 76% 43% 81% 94%
No 28% 25% 30% 37% 25% 27% 24% 56% 19% 6%
Don't know 0% 0% 0% 1% 0% 0% 0% 0% 0% 0%
Refused 0% 0% 0% 0% 0% 1% 1% 0% 0% 1%
Coll.
Amer. HS college
+
Yes 77% 53% 55% 84% 38% 64% 79% 91%
No 22% 47% 45% 15% 62% 36% 21% 8%
Don't know 0% 0% 0% 1% 0% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 1%
Banked vs. unbanked status

$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Unbanked (no
12% 10% 14% 22% 11% 10% 6% 31% 3% 1%
checking or savings)
Banked (have
checking, savings, or 88% 89% 86% 77% 89% 90% 93% 69% 97% 98%
both)
Undetermined 0% 0% 0% 0% 0% 0% 1% 1% 0% 1%
Coll.
Amer. HS college
+
Unbanked (no
6% 28% 30% 4% 36% 15% 6% 2%
checking or savings)
Banked (have
checking, savings, or 93% 72% 70% 95% 64% 85% 93% 97%
both)
Undetermined 0% 0% 0% 1% 0% 0% 1% 0%
Among the respondents with checking accounts nearly three quarters (73%) reported
using a debit card tied to their bank account, and almost one quarter (23%) reported
overdrawing their checking account occasionally.
Do you (or your spouse/partner) use a debit card tied to your bank account? (n = 1,260
respondents with checking account)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 73% 71% 74% 86% 82% 75% 50% 62% 75% 78%
No 27% 28% 26% 13% 18% 25% 49% 38% 25% 21%
Don't know 0% 0% 0% 0% 0% 0% 1% 1% 0% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 70% 83% -- 70% -- 66% 79% 75%
No 30% 17% -- 28% -- 33% 21% 24%
Don't know 0% 0% -- 2% -- 1% 0% 0%
Refused 0% 0% -- 0% -- 0% 0% 0%
Do you (or your spouse/partner) overdraw your checking account occasionally? (n =

1,260 respondents with checking account)
$25-
Total Male Fem. 18-29 30-44 45-59 60+ <$25K $75K+
75K
Yes 23% 19% 26% 30% 27% 24% 11% 29% 22% 17%
No 77% 80% 74% 70% 72% 76% 89% 70% 77% 83%
Don't know 0% 1% 0% 0% 1% 0% 0% 0% 1% 0%
Refused 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Coll.
Amer. HS college
+
Yes 21% 33% -- 19% -- 24% 25% 18%
No 79% 67% -- 80% -- 75% 75% 82%
Don't know 0% 0% -- 1% -- 1% 1% 0%
Refused 0% 0% -- 0% -- 0% 0% 0%
Unbanked respondents were given a list of reasons that might explain why they didn’t
have bank accounts and were asked to specify which reasons applied to them. Multiple
responses were allowed. The reason that was picked most commonly (more than twice as
many unbanked respondents picked it than any other single reason) was “do not have
enough money to make it worthwhile.” However, roughly one third of the unbanked
agreed that “bank fees are too high,” a third said that they “do not like dealing with
banks,” and a third said they “do not want to share my personal information.”
Which of the following are reasons why you do not have a checking or savings account?
(n = 180 unbanked respondents)
Total
% Yes
Do not have enough money to make it worthwhile 72%
Do not want to share my personal information 35%
Bank fees are too high 35%
Do not like dealing with banks 34%
Inconvenient hours or location 23%
Banks would not let me open an account 22%
The unbanked respondents were also asked about their usage of alternatives to bank
services (e.g., check cashing facilities and money orders).
Total
(n = 180 unbanked respondents)
%Yes
Do you (or your spouse/partner) sometimes pay your bills with money orders? 71%
Do you (or your spouse/partner) sometimes cash checks at a grocery store or supermarket? 49%
Do you (or your spouse/partner) sometimes go to a check cashing store to cash checks? 47%
Banked vs. Unbanked
The following tables provide an in-depth comparison of the unbanked population to the
banked population across a variety of measures in the survey, including borrowing
practices, banking literacy, and credit card usage.
% Yes Unbanked Banked
(n = 180) (n = 1,303)
Have you taken out an auto title loan? 5% 7%
Have you taken out a short term "payday" loan? 8% 5%
Have you gotten an advance on your tax refund? This is sometimes called a
16% 6%
"refund anticipation loan" or "Rapid Refund." (Note not e-filing)
Have you used a pawn shop? 26% 6%
Have you used a rent-to-own store? 14% 3%
Suppose you had $100 in a savings account and the interest rate was 2% per year. After
5 years, how much do you think you would have in the account if you left the money to
grow?
Unbanked Banked
More than $102 52% 67%
Exactly $102 12% 11%
Less than $102 13% 9%
Don't know 23% 12%
Refused 1% 1%
Imagine that the interest rate on your savings account was 1% per year and inflation was
2% per year. After 1 year, how much would you be able to buy with the money in this
account?
Unbanked Banked
More than today 19% 10%
Exactly the same 17% 8%
Less than today 41% 68%
Don't know 22% 13%
Refused 1% 1%
Credit card status

Unbanked Banked
No credit cards 88% 23%
1 or more credit cards 12% 76%
Undetermined 0% 1%
SUPPLEMENTAL ANALYSES
SHOPPING AROUND
At three different points in the survey, respondents were asked about their financial
shopping behavior regarding various financial products. The table below compares the
results from these questions. Shopping for a mortgage is most common; shopping for a
credit card is least common; shopping for a car loan falls in between.
Total
% Yes
When you were getting your mortgage, did you compare offers from different lenders or
66%
mortgage brokers? (n = 194)
Thinking about when you obtained your most recent credit card, did you collect information
34%
about different cards from more than one company in order to compare them? ( n = 1,018)
Thinking about your most recent auto loan, did you compare offers from different lenders? (n
49%
= 428)
SELF-PERCEPTION OF FINANCIAL CAPABILITY AND BEHAVIORS
The following tables show comparisons on questions of financial management between

respondents who agree vs. disagree with the statement “I am good at dealing with day-to-
day financial matters, such as checking accounts, credit and debit cards, and tracking
expenses.”
Some questions that showed sharp distinctions between those who said they were good at
day-to-day finances and those who didn’t were:
 Difficulty of covering expenses and paying bills in a typical month

 Experienced a large, unexpected drop in income over the last 12 months
 Usage of refund anticipation loans and pawn shops
Over the past year, would you say your (household's) spending was less than, more than,
or about equal to your (household's) income?
I am good at dealing with
financial matters…
Agree Disagree
Spending LESS than income 55% 37%
Spending MORE than income 11% 16%
Spending about EQUAL to income 34% 46%
Don't know 0% 1%
Refused 0% 0%
In a typical month, how difficult is it for you to cover your expenses and pay all your
bills?
Agree Disagree
Very difficult 9% 30%
Somewhat difficult 35% 35%
Not at all difficult 56% 35%
Don't know 0% 1%
Refused 0% 0%
In the past 12 months, have you (has your household) experienced a large drop in income
which you did not expect?
Agree Disagree
Yes 31% 43%
No 69% 56%
Don't know 0% 0%
Refused 0% 1%
Do you (or your spouse/partner) overdraw your checking account occasionally?

(respondents with checking accounts)
Agree Disagree
Yes 20% 33%
No 80% 65%
Don't know 0% 2%
Refused 0% 0%
Have you been involved in a foreclosure process on your home in the last 2 years?
Agree Disagree
Yes 1% 3%
No 99% 97%
Don't know 0% 0%
Refused 0% 0%
Have you declared bankruptcy in the last two years?

Agree Disagree
Yes 1% 2%
No 99% 96%
Don't know 0% 2%
Refused 0% 0%
% Yes Agree Disagree
Have you taken out an auto title loan? 7% 7%
Have you taken out a short term "payday" loan? 5% 9%
Have you gotten an advance on your tax refund? This is sometimes called a
6% 11%
"refund anticipation loan" or "Rapid Refund." (Note not e-filing)
Have you used a pawn shop? 7% 14%
Have you used a rent-to-own store? 4% 7%

Financial Capability in The United States December 2009

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Capability in The United States December 2009

Uploaded by

Copyright:

Available Formats

FINANCIAL CAPABILITY IN THE UNITED STATES

INITIAL REPORT OF RESEARCH FINDINGS

Prepared for the

FINRA INVESTOR EDUCATION FOUNDATION

APPLIED RESEARCH & CONSULTING LLC

The National Financial Capability Study consists of three linked surveys:

 National Survey: A national, random-digit-dialed telephone survey of 1,488

 State-by-State Survey: A state-by-state online survey of approximately 25,000

 Military Survey: An online survey of 800 military personnel and spouses

The overarching research objectives were to:

1. Benchmark key measures of financial capability

 Key measures of financial capability:

 Financial literacy measures:

 Standard demographic characteristics:

2009 NATIONAL SURVEY

 Age (18-29, 30-44, 45-59, 60+)

 Ethnicity (Caucasian, African-American, Hispanic, Asian)

METHODOLOGY – 2009 NATIONAL SURVEY

The survey instrument was designed by Professor Annamaria Lusardi (Dartmouth

The instrument was piloted in two separate phases.

II. CATI Pilot

Upon completion of the questionnaire development, the survey instrument was

Households were contacted using standard random-digit-dialing techniques. Within each

Primary Sample: N = 1,200

Oversamples: Minimum N = 150 per group

 To ensure sufficient respondents for analysis, oversamples were obtained for

 Ethnic oversampling resulted mainly in overrepresentation of Asians.

Ethnicity Raw N Raw % 2008 ACS

Education Raw N Raw % 2008 ACS

Census Divisions Raw % Weighted % 2008 ACS

Gender Raw % Weighted % 2008 ACS

Age Raw % Weighted % 2008 ACS

Age by Gender Raw % Weighted % 2008 ACS

Ethnicity Raw % Weighted % 2008 ACS

Education Raw % Weighted % 2008 CPS

NOTE ON HOUSEHOLD INCOME AND DEMOGRAPHICS

Income Raw % Weighted % 2008 ACS

INITIAL FINDINGS – 2009 NATIONAL SURVEY

SATISFACTION AND FINANCIAL MANAGEMENT

In the past 12 months, have you checked your credit score?

HOUSING AND MORTGAGES

Do you (or your spouse/partner) currently own…?

Do you currently have a mortgage on your home? (n = 909 homeowners)

Do you have a home equity loan? (n = 909 homeowners)

Is your mortgage a fixed-rate mortgage or an adjustable-rate mortgage? (n = 553

Is this an interest-only mortgage or a mortgage with an interest-only option, or neither of

Respondents with any retirement accounts, employer-based or independent (n = 1,211

Do you (or your spouse/partner) regularly contribute to a retirement account like a

Are your (household's) retirement assets primarily invested in a life-cycle or target-date

Respondents with at least one credit card vs. no credit cards

A core component of the financial capability survey was a battery of self-assessment

In general, the self-assessment questions revealed that most respondents believe

I am pretty good at math.

I regularly keep up with economic and financial news.

If interest rates rise, what will typically happen to bond prices?

A 15-year mortgage typically requires higher monthly payments than a 30-year

African-Americans and Hispanics scored lower than Caucasians and Asian-Americans.

Average across all five quiz questions

Are you covered by health insurance?

Do you have homeowner's or renter's insurance?

Do you have a life insurance policy?

Do you have auto insurance?