WHEREAS, Californians’ total personal income is 57 percent higher than the next closest state and accounts for 13 percent of all personal income in the United States; and
WHEREAS, Thirteen percent of Californians live below the poverty level; and
WHEREAS, During the past two decades, the proportion of households with outstanding debt has risen dramatically, and this increase has been the greatest for the lowest 40 percent of the income distribution; and
WHEREAS, In 2005, consumer bankruptcy filings numbered over 2 million, up 31.6 percent from 2004, representing one in every 53 households; and
WHEREAS, In 2005, Chapter 7 consumer bankruptcy filings, which provide consumers with the greatest relief from their debt, increased 47.2 percent; and
WHEREAS, Average credit card debt among low- and moderate-income households is $8,650; and
WHEREAS, Over one-third of young adults own credit cards, and young people receive little in the way of financial education; and
WHEREAS, Average credit card debt among indebted young adults, ages 25 to 34 years, inclusive, increased by 55 percent in the past decade, to $4,088, and average credit card debt among young adults, ages 18 to 24 years, inclusive, increased 104 percent; and
WHEREAS, Fifty-two percent of Americans do not regularly check their credit reports; and
WHEREAS, Forty-three percent of American families spend more than they earn; and
WHEREAS, A recent federal research survey found that Americans hold a total of $1.9773 trillion in debt, not including mortgage debt, meaning a debt of $18,654 per household; and
WHEREAS, The U.S. savings rate for consumers in late 2005 was a negative 1 percent, the lowest since the Great Depression; and
WHEREAS, The 2006 Retirement Confidence Survey found that a large majority of workers who have not put money aside for retirement have little in savings if at all; and
WHEREAS, The average amount in retirement accounts is $49,944; and
WHEREAS, Forty-three percent of American households do not have retirement accounts; and
WHEREAS, Almost 70 percent of retired workers reported that they now spend the same as or more than they did when they worked; and
WHEREAS, Seventy percent of retirees said they wish they had saved more during their working years and 59 percent said they should have started saving earlier; and
WHEREAS, High school seniors taking part in a national survey of financial knowledge scored an average of 52.4 percent, which is a failing grade; and
WHEREAS, Only seven states require high school students to pass a test on personal finance in order to graduate; and
WHEREAS, In recent years, total annual borrowing through student loans has soared 85 percent, easily outpacing the 41 percent rise in public college costs and the 28 percent increase at private schools; and
WHEREAS, Undergraduates reported freshman year as the most prevalent time for obtaining credit cards, with 56 percent reporting having obtained their first card at 18 years of age; and
WHEREAS, Eighty-three percent of undergraduate students have at least one credit card with an average balance of $2,237; and
WHEREAS, By the time a college student graduates he or she will have, an average, $20,402 in credit card and education loan balances; and
WHEREAS, Increasing the financial literacy of all economic and ethnic groups is documented to improve attitudes, lead to improved decision-making, and provide for a more secure future for the individuals and their families who have been educated with regard to these issues; and
WHEREAS, Financial literacy training may be easily integrated as a valuable component for elementary and secondary schools, colleges and universities, libraries, community groups, and citizen town hall meetings; and
WHEREAS, Many groups are dedicated to increasing the financial literacy of Americans and a broad range of quality personal finance instructional materials and curricula have been created for this purpose, but the audience to which this information is vital is not being reached; now, therefore, be it
Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature hereby declares the month of April 2007 as Financial Literacy Month, in order to raise public awareness about the need for increased financial literacy; and be it further
Resolved, That legislators, employers, schools, service groups, community organizations, libraries, financial institutions, and the media, be encouraged to provide opportunities for financial literacy education for all Californians through a variety of means, and to collaborate with members of the California Society of Certified Public Accountants, California Jump Start Coalition, and others, as they provide outreach and education; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the author for appropriate distribution.