Financial literacy is a hot topic.
But a new survey shows that residents in many states still have plenty to learn about handling their money.
Residents of California, Massachusetts and New Jersey are the best at that, according to a study on money management fundamentals released last week by the Financial Industry Regulatory Authority Inc.
Conversely, residents of Mississippi, Arkansas and Kentucky rank at the bottom of the list.
The results are based on an online survey of 25,509 American adults from July to October 2012. Overall, the number of respondents demonstrating a high degree of financial literacy — answering correctly four or five of the five questions about financial knowledge — dropped to 38% last year, from 42% in 2009.
More financial education is required, according to Finra chairman and chief executive Richard Ketchum.
“Clearly, this focuses on the need for policymaking,” he said at an event announcing the findings.
Securities and Exchange Commission Chairman Mary Jo White said that not enough investors are taking advantage of its online resources designed to provide financial education as well as information about financial advisers.
“It seems that we're almost more likely to go on Angie's List to check out our plumber than we are to go on the SEC's website to investigate the background of the individual with whom we are about to entrust our life savings,” Ms. White said, referring to the business reviews website.
BRIGHT SIDE
On the bright side, about 40% of respondents in the survey said that they could cover monthly bills and expenses, compared with 36% in 2009. The portion of respondents who were “very satisfied” with their financial condition rose to 24% last year, up from 16% in 2009.
But debt looms over many Americans. In the survey, 42% responded affirmatively to the statement: “I have too much debt right now.”
“No matter how much income they earn, a significant number felt they had too much debt,” Mr. Ketchum said.
The survey also showed a startling lack of savings for many Americans. Nearly 40% said that they couldn't come up with $2,000 to meet an unforeseen expense over the next month.
