Financial Survey: Illinoisans Less Likely to Live Paycheck-to-Paycheck Than National Average

America’s first State-by-State Financial Capability Survey revealed that Illinoisans are less likely to live paycheck-to-paycheck than the national average. The findings are part of the National Financial Capability Study, conducted by the FINRA Investor Education Foundation, which explores in-depth how Americans manage their resources and make financial decisions.

The survey findings are available on a new website, www.usfinancialcapability.org, which features a clickable map of the United States and allows the public, policymakers and researchers to delve into and compare the financial capabilities of Illinoisans with residents of other states and across geographic regions. The State-by-State Financial Capability Survey, which surveyed more than 28,000 respondents, was developed in consultation with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy.

Illinoisans were less likely to live paycheck-to-paycheck or use high-cost, non-bank borrowing, and they reported results near the national average in other key areas. Results include:

• Making Ends Meet: 51 percent of Illinoisans are living paycheck-to-paycheck. By comparison, 55 percent of Americans report spending more than or about equal to their household income.

• Planning Ahead: 62 percent of Illinoisans do not have a “rainy day” fund to cover three months of unanticipated financial emergencies. This compares to 60 percent of Americans nationwide.

• Managing Financial Products: 19 percent of Illinoisans have engaged in some form of high- cost, non-bank borrowing during the last five years, including taking out a payday loan or getting an advance on a tax refund, compared to 24 percent of all Americans.

• Financial Knowledge: On a test of five basic financial literacy questions, Illinoisans answered on average 2.99 financial literacy questions correctly. The national average was 2.99 correct answers.

Financial Decision-Making: 64 percent of Illinoisans did not comparison shop for credit cards, worse than the national average of 62 percent.
“This study highlights how important improving financial education is for Americans, especially during times of financial insecurity,” said FINRA Foundation Chairman Richard Ketchum. “Whilethe current economic conditions can exacerbate the consequences of poor financial decisions, some states are still well ahead of others.”

The findings emphasize the need for Americans to take greater charge of their financial well- being by forecasting future financial needs, navigating increasingly complex financial markets and managing risk. The state-by-state results break down financial decisions and literacy by gender, age bracket and region, and highlight how a lack of financial capability has disadvantaged many Americans.
The study represents an unprecedented collection of data on financial behaviors across all 50 states and the District of Columbia. The FINRA Foundation will make the extensive and multi- dimensional information in this study available to policymakers and researchers, allowing them to look at individual financial behavior from various angles and utilize the state-specific data to tailor new programs and policies to promote greater financial capability.