1. NeighborWorks America Financial Capability Survey --- Final Report March 26, 2015

2. 2 Table of Contents

3. 3 NeighborWorks America Financial Capabilities Survey Research Overview

4. 4 Project Background and methodology Project Overview  NeighborWorks worked with SMARI to execute and report the results of a national consumer financial survey.  This survey is aimed at providing important consumer-based information that will inform NeighborWorks America’s delivery of financial capability services and training tools to the nonprofit community development profession, expanding understanding of the financial literacy and capability of American households.  The ability to manage personal finances for the short and long term are critical skills for personal success and community economic health. The results of this survey will add to the body of information gleaned from the first financial capability survey conducted in the spring of 2014. ‐500 surveys were completed with US consumers via telephone. ‐535 surveys were completed via email / web. 500 Telephone Surveys 535 Web-Based Surveys Total N=1035  Data were collected between March 10 and March 19, 2015.  Data were weighted to be representative of the U.S. population and reflect the U.S. Census.  Survey has a cumulative sampling error of +/- 3.0% at the 95% confidence level. Research MethodologyBlended Approach

5. 5 Respondent Demographics. Education Less than high school13% High school graduate28% Some college (Associates degree)31% 4-year (BA, BS) college degree18% Post graduate study10% Prefer not to say1% Hispanic origin or descent Yes16% No82% Don't know2% Ethnicity African American13% Caucasian/white71% Asian5% More than one race3% Other7% Age Range 18-2412% 25-298% 30-3411% 35-398% 40-449% 45-4911% 50-549% 55-597% 60-648% 65 or older 16% Homeownership I own a house or townhouse55% I own an apartment or condominium2% I rent a house or townhouse13% I rent an apartment or condominium15% I live with others who are owners or renters11% Other1% Prefer not to answer2% Region Northeast 18% South37% Midwest 22% West 23% Gender Male48% Female52% Income Under $20,00020% $20,000 - $39,99917% $40,000 - $59,99916% $60,000 - $79,99914% $80,000 - $99,9999% $100,000 - $149,99910% $150,000 - $200,0003% $200,000 or more1% Prefer not to answer10% Data were weighted by to representative of the U.S. Census. Total N=1,035 Totals may not equal 100% due to rounding.

6. 6 Important Data Considerations Comments on Data and Year over Year Comparisons  It is important to note the subtle differences in data and reported results in this year’s Financial Capabilities survey, as compared to 2014.  Often, 2015 data trended with a slight variance, comparatively. Some of this has to do with natural and expected trends in personal opinions and consumer confidence, as compared to last year.  However, some variances relate to differences in methodology (phone only survey in 2014 vs. blended approach phone and web/email in 2105). As such, the 2015 study incorporated a greater number of younger and more demographically varied respondents (which in total were weighted to correlate precisely with U.S. Census data) than the previous survey. Comments on Data and Year over Year Comparisons  It is important to note the subtle differences in data and reported results in this year’s Financial Capabilities survey, as compared to 2014.  Often, 2015 data trended with a slight variance, comparatively. Some of this has to do with natural and expected trends in personal opinions and consumer confidence, as compared to last year.  However, some variances relate to differences in methodology (phone only survey in 2014 vs. blended approach phone and web/email in 2105). As such, the 2015 study incorporated a greater number of younger and more demographically varied respondents (which in total were weighted to correlate precisely with U.S. Census data) than the previous survey.

7. 7 Executive Summary - Key Findings Financial Preparedness  Saving for one’s retirement remains the most important financial goal, according to consumers. Interestingly, pursuit of this specific financial goal varies based on ethnicity. While Hispanics and Caucasians/Whites regard saving for retirement as the most important financial goal, African Americans deem saving money for a down payment on a house as the most important financial goal.  Just under half of consumers (47%) indicated they have not reached out to others to gain information about a financial decision. The most noted reasons for not doing so related to the belief that this type of information is readily available on the Internet and also due to fears of sharing detailed financial information with a stranger. –Instilling the perception of value in the information NeighborWorks provides to consumers and that this information cannot be attained via the internet is important to instill a true sense of need with consumers. In addition, bridging fears of sharing financial information and creating a sense of “comfort and confidence” are integral to overcoming the “trust” and “fear” barriers that exist currently.  While just over 6 in 10 consumers stated they have confidence they could survive a financial emergency, this is down slightly from 2014 measures (63% confident in 2015 vs. 68% confident in 2014). More importantly, minorities, younger Americans, less educated and less affluent consumers tend to be the most vulnerable to financial hardship. Many of these individuals indicated having insufficient consumer confidence to overcome an unexpected financial emergency, with insufficient personal savings.

8. 8 Executive Summary - Key Findings Interest in Financial Services  Three quarters of consumers stated being unaware of low cost or free financial services available to them within their community. However, despite being unaware of these services, nearly 6 in 10 (59%) expressed an interest in nonprofit services to help look at finances and achieving goals. This is a notable increase from 2014, where just under 4 in 10 (35%) cited an interest in these services. Furthermore, African Americans and Hispanics expressed stronger levels of interest in this information than did Caucasians/Whites.  Despite an interest in information to educate consumers on financial matters, many consumers remain unlikely to pay for nonprofit services. All told, just 30% of consumers indicated being likely to pay for this service in 2015, as opposed in 26% in 2014.  Regarding low-cost or no cost information to available to consumers, the services which garnered the greatest interest are saving for retirement along with reducing debt and managing repayment. Receiving free tax advice was also noted as a service of interest.

9. 9 Strategic Considerations 1.Many Americans Are Vulnerable Data show that 4 in 10 consumers are not financially prepared to cope with an unexpected financial crisis. Most often these consumers are minorities, younger, less educated and less affluent. 3. Instill Value Some consumers believe they can obtain comparable financial information online. Furthermore, many indicate being unwilling to pay for these services. A clear value proposition needs to be established so consumers will realize they cannot obtain the same caliber of information via the internet. 2. Consumers are Interested in Assistance Just under 6 in 10 stated they are interested in nonprofit services to help look at finances and ways to achieve their goals. However, many are unaware these services are offered in their local communities. Making matters more challenging is that consumers are hesitant to talk about their financial situation with a “stranger.” 1 2 3

10. 10 NeighborWorks America Financial Capabilities Survey Financial Goals and Capability

11. 11 Consumers deem saving for their retirement as well as paying everyday expenses and bills as their most important financial goals. What is the most important financial goal you have right now? Saving for my retirement 24%28% Paying bills / paying everyday expenses 10%8% Saving for a down payment on a house 8%13% Don’t know / Nothing 10%15% Other 8%11% Get out of debt / Stay debt free * 7%-- Savings (Unspecified) * 7%-- Make more money / Get rich 6%5% Saving for my children's education 5%7% Career / Find a full time job * 4%-- Paying down or paying off student debt * 3%-- Pay off mortgage * 3%-- Buying a car 2%4% Paying down or paying off credit card debt 2%7% Saving for my own education 1%4% Starting a small business * 1%-- Paying health bills 1%8% Saving for emergencies 1%5% Q1. To start, what is the most important financial goal you have right now? 20152014 * New financial goals identified in 2015N=1035

12. 12 The financial goals deemed most important differ by ethnicity. Just under 1 in 3 Caucasians name saving for their retirement to be the most important, while just under 2 in 10 Hispanics have the same goal. African Americans cite saving for a down payment on a house as their most important financial goal. Q1. To start, what is the most important financial goal you have right now?

13. 13 Those with greater incomes indicated a much greater interest in saving for retirement, as opposed to those with lower annual incomes. Paying bills and everyday expenses was more important to those earning under $100k, as opposed to the most wealthy consumers. Q1. To start, what is the most important financial goal you have right now? Most Important Financial Goals by Income Range Top Responses <$40k$40k-$59k$60k-$100k$100k+ Saving for my retirement 12%23%29%42% Paying bills / paying everyday expenses 11% 8%3% Saving for a down payment on a house 10%9%7%5% Make more money / Get rich 8%7%5%3% Savings (Unspecified) 8%6%8%10% Get out of debt / Stay debt free 6%9% 7%

14. 14 Consumers under the age of 40 indicate that one of their most important financial goals is saving for a down payment for a house. For older consumers, the most important financial goal is saving for retirement. Q1. To start, what is the most important financial goal you have right now? Most Important Financial Goals by Age Range - Top Responses 18-2425-2930-3435-3940-4445-4950-5455-5960-64 65 or older Saving for a down payment on a house13%17%14% 10% 3%1%0%1% Savings (Unspecified)11%14%13%11%12%1%5%4%6%2% Make more money / Get rich9%8%4%6%4%11%5%6%4%6% Paying down or paying off student debt 8%5%3%6%1%2% 1% 0% Buying a car8%4% 1% 2%0%1% Get out of debt / Stay debt free7%11%10%14%9%7%6%3%4%2% Career / Find a full time job7%9%1%2%5%3%4%2% Nothing5%3%8%2%1%2%5%8%14%21% Saving for my children's education3% 7% 9%6%7%3%1%2% Saving for my retirement2%7%9%18%20%29%40%42%35%34%

15. 15 While some variances exist year over year, the driving sentiment on behalf of consumers remains focused on financial security and self sufficiency. The ability to pay one’s bills and have enough money gives consumers security and peace of mind. Q2. What does the term “financial capability mean to you? Security and peace of mind

16. 16 Q4. Have you ever reached out to other people or financial organizations to gain information about a financial decision? Consumers indicate they have reached out to others to gain information about a financial decision with a greater propensity now than in 2014, as nearly half state doing so.

17. 17 Q4a. If no, please rank the following reasons for not reaching out to others to gain information about a financial decision. According to consumers, the main reasons for not reaching out to others to gain information about a financial decision are the belief they can get all of the information needed on the internet and the fear of sharing detailed financial information with a stranger.

18. 18 Q5. Where do you go to gain information about a financial decision? Consumers indicate that consulting with friends and family along with a financial advisor are their main resources regarding financial decisions. Friends and family are utilized more for financial information now than in 2014.

19. 19 Q5. Where do you go to gain information about a financial decision? Consumers look to different resources for information about financial decisions, depending on their ethnicity. Caucasians rely mostly on financial advisors while African Americans and Hispanics gain information primarily from family and friends.

20. 20 Just over 4 in 10 consumers indicated they would be likely to fund a major purchase out of their personal checking account. Another 3 in 10 would seek a loan from a financial institution. Q6. Say you were planning to make a major purchase in the next 12 months. How would you most likely fund that purchase? N=1035 Lower Income (<$40k) – 2015 vs. 2014  More likely to turn to a friend or family member (18% vs 15%). Slightly more likely to get a payday loan (6% vs 4%).  Less likely to use savings account (20% vs. 29%), a personal checking account (36% vs. 41%) or get a loan from the bank (24% vs 32%). Allowed for multiple responses, so percentages may exceed 100%

21. 21 NeighborWorks America Financial Capabilities Survey Financial Preparedness

22. 22 Just over 6 in 10 consumers cite having money saved up in case of an emergency. Nearly 7 in 10 expressed confidence they could withstand a financial emergency, however, consumer confidence declined from 2104. Q7. Do you personally have money saved up in case of an emergency? 3% cited Don’t Know in 2014 Do you personally have money saved up in case of an emergency? 2014 Responses  Yes – 68%  No – 29%  Don’t know – 3% N=1035 Q8. How confident are you that you could financially withstand an unexpected financial emergency? Top 2 Box Rating  2015 = 67%  2014 = 71%

23. 23 Dramatic differences exist by income levels regarding money saved up in case of an emergency. Just under 4 in 10 consumers with an income of <$20,000 stated having no money saved up for unexpected emergencies. African Americans are least likely to have money saved for emergencies. Q7. Do you personally have money saved up in case of an emergency? Do you personally have money saved up in case of an emergency? All Respondents Have Money Saved Up By Income Level Yes, I Personally Have Money Saved up in Case of an Emergency? By Ethnicity

24. 24 Consumers indicated a slight decrease in confidence in 2015 regarding how long saved money would last during a financial setback. Conversely, increases were noted for time increments of less than 12 months. Q9. If you experienced a significant financial setback, how long do you believe any money you have saved up would last? N=1035

25. 25 African Americans indicated relatively low confidence levels across most criteria, in particular with regard to money saved up in case of an emergency. Financial Confidence Score Card By EthnicityTotal African American WhiteHispanic Do not having money saved up in case of an emergency34%47%29%42% Are not too confident or not confident at all about withstanding an unexpected financial emergency 32%31% 39% Are not confident at all about withstanding an expected financial emergency 13%15%13%11% Money saved would last less than 1 month25%30%23%31% Money saved would last less than 3 months47%51%43%55%

26. 26 Consumers who attained a high school education or less indicated having the lowest economic confidence as opposed to those with either some college or a college degree. Financial Confidence Score Card By Education 2015 Total 2015 H.S. / Less 2015 Some College 2015 College Grad + Do not having money saved up in case of an emergency34%49%30%18% Are not too confident or not confident at all about withstanding an unexpected financial emergency 32%42%40%21% Are not confident at all about withstanding an expected financial emergency 13%18%12%7% Money saved would last less than 1 month25%34%24%12% Money saved would last less than 3 months47%55%48%31%

27. 27 Lower income consumers are the least prepared for an unexpected financial hardship. Financial Confidence Score Card By Income Total <$20k<$40k$40k-$59k$60k-$100k$<100k Do not having money saved up in case of an emergency 34%61%50%34%21%17% Are not too confident or not at all confident about withstanding an unexpected financial emergency 32%55%47%31%21%19% Are not confident at all about withstanding an expected financial emergency 13%29%23%8%7%5% Money saved would last less than 1 month 25%42%37%30%16%8% Money saved would last less than 3 months 47%64%60%53%41%22%

28. 28 Younger consumers are least prepared for financial emergencies. Over 6 in 10 under the age of 30 state the money they have saved would less than 3 months. Financial Confidence Score Card By Age TotalUnder 30Under 5555+ Do not having money saved up in case of an emergency34%39%36%27% Are not too confident or not at all confident about withstanding an unexpected financial emergency 32%39%34%26% Are not confident at all about withstanding an expected financial emergency 13%14%13%14% Money saved would last less than 1 month25%36%25%16% Money saved would last less than 3 months47%63%50%29%

29. 29 Non homeowners are extremely vulnerable to financial crisis, should an unexpected financial emergency arise. Financial Confidence Score Card By Homeownership 2015 Total 2015 Homeowners 2015 Not Homeowners Do not having money saved up in case of an emergency34%22%51% Are not too confident or not at all confident about withstanding an unexpected financial emergency 32%22%48% Are not confident at all about withstanding an expected financial emergency 13%8%20% Money saved would last less than 1 month25%15%39% Money saved would last less than 3 months47%36%63%

30. 30 Men are slightly more confident than women regarding financial considerations. Non college women show the greatest financial vulnerability. Financial Confidence Score Card By Gender TotalMenWomen Women <45 Non-White Women Non- College Women Do not having money saved up in case of an emergency34%33%35%36%40%52% Are not too confident or not at all confident about withstanding an unexpected financial emergency 32%31%35% 33%49% Are not confident at all about withstanding an expected financial emergency 13%12%15%13%17%23% Money saved would last less than 1 month25% 27%26%36% Money saved would last less than 3 months47%45%48%51%52%56%

31. 31 NeighborWorks America Financial Capabilities Survey Interest in Financial Services

32. 32 Q10.Do you know of low-cost or free financial services available in your community? N=1035 Three quarters of consumers report being unaware of low cost or free financial services available to them within their community.

33. 33 Awareness or knowledge of services is relatively consistent across most demographics. However, those in income range of $40k-$59k tend to be the most informed. Q10.Do you know of low-cost or free financial services available in your community? Know of Services by EthnicityKnow of Services by Homeownership

34. 34 Nearly 6 in 10 expressed an interest in nonprofit services to help look at finances and achieving goals. This is up sharply from 2014. Q11.If there were a nonprofit service that would help you look at your finances and achieve your goals, to what extent would you be interested in that service? 59% indicate being interested in this service in 2015, as compared to 37% in 2014 N=1035 * Very strong difference noted from 2014 as compared to 2o15. *

35. 35 Consumer opinions regarding a nonprofit service aimed at looking at finances and assisting in achieving financial goals have changed in the past year across all income levels and ethnicities. Q11.If there were a nonprofit service that would help you look at your finances and achieve your goals, to what extent would you be interested in that service? Very strong difference noted from 2014 as compared to 2o15.

36. 36 While consumers remain unlikely to pay for nonprofit services aimed at looking at finances and achieving goals, that number has decreased in 2015. All told, 30% of consumers indicated being likely to pay for this service in 2015, as opposed in 26% in 2014. Q12.How likely would you be to pay for a nonprofit service that would help you look at your finances and achieve your goals? N=1035 * Very strong difference noted from 2014 as compared to 2o15. * Slight increase in 2015

37. 37 Interest in a paid nonprofit service aimed at looking at finances and achieving goals was strongest among African Americans and Hispanics. Those aged 55+ expressed the most negative opinions. Minimal differences were noted by income range. Q12.How likely would you be to pay for a nonprofit service that would help you look at your finances and achieve your goals?

38. 36 NeighborWorks America Financial Capabilities Survey Interest in Financial Offerings

39. 39 Just under 6 in 10 consumers cited saving for their retirement as their greatest area of interest if offered help on a low-cost or no cost basis. Just under half expressed an interest in reducing debt and managing repayment. Q13. If you could receive help on doing these things on a low-cost or no cost basis, how likely would you be to take advantage of them? Numbers do not total 100% as N/A responses were excluded from charts. N=1035

40. 40 With increases in “very likely” levels of interest noted across the board in 2015, saving for retirement along with reducing debt and managing repayment were cited by consumers as areas of greatest interest on a low-cost or no cost basis. Q13. If you could receive help on doing these things on a low-cost or no cost basis, how likely would you be to take advantage of them?

41. 41 African Americans and Hispanics tend to be more interested in specific financial skills as opposed to Caucasian consumers. In particular, African Americans expressed an interest in reducing debt, receiving free tax advice and building a budget. Q13. If you could receive help on doing these things on a low-cost or no cost basis, how likely would you be to take advantage of them? % Very or Somewhat Likely By EthnicityTotalWhiteAfrican AmericanHispanic Saving for retirement57%52%65%66% Receiving free tax advice52%46%67% Reducing debt and managing repayment49%42%67%65% Building a budget48%41%67%64% Acquiring and effectively using credit43%34%56%61% Purchasing or renting a home38%31%53%58% Planning to pay for college education32%27%41%49% Completing student financial aid forms27%20%38%66%

42. 42 Lower-income consumers expressed the greatest interest in learning how to build a budget. More affluent Americans cited their primary interests to be related to saving for retirement. Q13. If you could receive help on doing these things on a low-cost or no cost basis, how likely would you be to take advantage of them? % Very or Somewhat Likely By Income Total<$20k<$40k$40k-$59k$60k-$100k$100k+ Saving for retirement 57%56%58%59%66%54% Receiving free tax advice 52%55%54%56%55%54% Reducing debt and managing repayment 49%55%54%52%54%37% Building a budget 48%62%55%49% 43% Acquiring and effectively using credit 43%51%48% 41%33% Purchasing or renting a home 38%55%49%39%37%29% Planning to pay for college education 32%37%35%38%30%35% Completing student financial aid forms 27%35%30%33%24%27%

43. 43 NeighborWorks America Financial Capabilities Survey Appendix

44. 44 Year over year financial scorecard by ethnicity. Financial Confidence Score Card By Ethnicity 2105 Total 2014 Total 2015 African American 2014 African American 2015 White 2014 White 2015 Hispanic 2014 Hispanic Do not having money saved up in case of an emergency 34%29%47%43%29%24%42%39% Are not too confident or not confident at all about withstanding an unexpected financial emergency 32%26%31%35%31%22%39%32% Are not confident at all about withstanding an expected financial emergency 13%14%15%14%13%14%11%17% Money saved would last less than 1 month25%21%30% 23%18%31% Money saved would last less than 3 months47%42%51%47%43%38%55%57%

45. 45 Year over year financial scorecard by education. Financial Confidence Score Card By Education 2015 Total 2014 Total 2015 H.S. / Less 2014 H.S. / Less 2015 Some College 2014 Some College 2015 College Grad + 2014 College Grad+ Do not having money saved up in case of an emergency 34%29%49%43%30%34%18%14% Are not too confident or not confident at all about withstanding an unexpected financial emergency 32%26%42%37%40%31%21%15% Are not confident at all about withstanding an expected financial emergency 13%14%18%23%12%14%7%6% Money saved would last less than 1 month25%21%34% 24%23%12% Money saved would last less than 3 months47%42%55%53%48%50%31%28%

46. 46 Year over year financial scorecard by income. Financial Confidence Score Card By Income 2015 Total 2014 Total 2015 <$20k 2014 <$20k 2015 <$40k 2014 <40K 2015 $40k- $59k 2014 $40k- $59k 2015 $60k- $100k 2014 $60k- $100k 2015 $100k+ 2014 $100k Do not having money saved up in case of an emergency 34%29%61%65%50%52%34%24%21%16%17%11% Are not too confident or not at all confident about withstanding an unexpected financial emergency 32%26%55%57%47%48%31%27%21%17%19%6% Are not confident at all about withstanding an expected financial emergency 13%14%29%38%23%28%8%13%7%5% 3% Money saved would last less than 1 month 25%21%42%53%37%41%30%26%16%11%8%9% Money saved would last less than 3 months 47%42%64%70%60%62%53%45%41%45%22%19%

47. 47 Year over year financial scorecard by age. Financial Confidence Score Card By Age2015 Total 2014 Total 2015 Under 30 2014 Under 30 2015 Under 55 2014 Under 55 2015 55+ 2014 55+ Do not having money saved up in case of an emergency 34% 29% 39%38%36%32%27%25% Are not too confident about withstanding an unexpected financial emergency 32% 26% 39%29%34%27%26%24% Are not confident at all about withstanding an expected financial emergency 13% 14% 8%13% 14% Money saved would last less than 1 month25% 21% 36%29%25% 16% Money saved would last less than 3 months47% 42% 63%60%50% 29%31%

48. 48 Year over year financial scorecard by homeownership. Financial Confidence Score Card By Homeownership 2015 Total 2014 Total 2015 Homeowners 2014 Homeowners 2015 Not Homeowners 2014 Not Homeowners Do not having money saved up in case of an emergency 34% 29% 22%17%51%48% Are not too confident about withstanding an unexpected financial emergency 32% 26% 22%18%48%41% Are not confident at all about withstanding an expected financial emergency 13% 14% 8% 20%23% Money saved would last less than 1 month25% 21% 15% 39%35% Money saved would last less than 3 months47% 42% 36%32%63%62%