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Inside the numbers: Why is financial fitness so important?

A 2009 study by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation looked at the financial capabilities of American adults in a state-by-state comparison of five categories.

The results demonstrate the vital need for financial education, especially when Oklahoma is put under the microscope.

Here are the five categories and results from the survey, which included more than 28,000 respondents throughout the country:

Spending vs. Saving – In Oklahoma, 21 percent of those surveyed reported their household spent more money than their income. The national average was similar at 20 percent.

No “Rainy Day” Funds – This refers to having an emergency fund that could cover three months’ worth of expenses, in case of an event like a job loss or illness. In Oklahoma, 72 percent of respondents did not have that amount set aside, as compared to 60 percent nationally.

Non-Bank Borrowing – This includes such actions as taking out an auto title loan, an advance on a tax refund, a payday loan or using a rent-to-own store. In Oklahoma, 36 percent of respondents used one or more methods of non-bank borrowing. The national number was 24 percent.

Financial Literacy – Five questions on the concepts of economics and finance were asked. In Oklahoma and nationally, respondents answered three of the questions correctly. The survey can be taken here.

Comparison Shopping – This looks specifically at the use of credit cards and deciding which card to use. Oklahoma was slightly better than the national average, with 60 percent of respondents saying they did not compare information about the credit card companies. Nationally, 62 percent did not compare before beginning to use a card.

Visit the Financial Fitness display at your hometown library and Get Moving Towards Financial Freedom.

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