New Jerseyans scored No. 1 in three of five measures of financial capability in a study conducted by FINRA Investor Education Foundation, in cooperation with the U.S. Department of the Treasury and the President’s Council on Financial Literacy.
According to the study, almost half of those queried (48.7 percent) spent less than their income, which was the highest in the nation. (New York, 46.2 percent; Washington, 44.9 percent; Maryland, 44.8 percent; and California, 44.6 percent round out the top five states in this category.)
New Jerseyans also scored No. 1 in planning ahead: 47.8 percent said they had a “rainy day” fund. The average for the country was 35.3 percent. States that performed well in this category also included New York (45.1 percent) and Washington (43.1 percent), as well as New Hampshire (41.7 percent) and Massachusetts (41.1 percent).
The third measure considered for financial capability was the number of people who said they had turned to non-traditional methods of borrowing, such as pawnshops, getting an advance on a tax refund, or borrowing against a car. Only 13.8 percent of those surveyed in the Garden State said they had resorted to these methods. The national average was 24.3 percent. Other low-scoring states include New Hampshire (15.4 percent), Massachusetts (15.6 percent), New York (17.7 percent), and California (17.8 percent).
Although New Jersey residents ranked first regarding how they were making ends meet, whether they were planning ahead and what types of financial products they used, they scored much closer to the average in financial decision-making. The mean number of correct answers was 3.02, as opposed to 2.99 for the country as a whole.
When it came to comparison shopping, New Jerseyans didn’t seem as motivated. Although they compared credit cards and obtained credit reports at a similar rate as the rest of the country, only 35 percent said they compared auto loans, as opposed to 44 percent nationwide. Maybe this is because fewer New Jerseyans taking the survey seemed to be suffering financially, compared with the rest of the country: 40 percent said they experienced a large unexpected drop in income in the past year, as opposed to New Jersey’s 34 percent.