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June 7, 2013

Americans Short on Financial Know How

Brendan Cronin:

Some household balance sheets have mended during the recovery but that may be thanks less to fiscal stewardship than the improving economy.

In fact, Americans' grasp of concepts such as investment risk and inflation has weakened since the recovery began in mid-2009. Research released last week shows that on a five-question test (Take the test here), respondents did worse in 2012 than in 2009. The average number of correct answers fell to 2.9 in 2012 from 3.0 on the test in 2009.

The test, along with a wide-ranging survey of financial capability of more than 25,000 American adults, was conducted during the fall and funded by the Financial Industry Regulatory Authority Investor Education Foundation.

"People are finding it a little easier to make ends meet," Finra Chief Executive Richard Ketchum said in presenting the 2012 National Financial Capability Study results last week in Washington. "More respondents have rainy-day funds, which puts them in a better position to deal with life's unexpected events...But there are still very significant concerns," he said, adding that debt continues to be a serious problem.

Posted by Jim Zellmer at June 7, 2013 12:56 AM
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