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4 financial goals to help Ark consumers achieve stability

Fast Facts:

    • Four simple steps to financial stability
    • Study finds higher percentage of Arkansans outspending income between 2009-2012

LITTLE ROCK – A higher percentage of Arkansans outspent their income in 2012 compared to three years earlier, however, a slightly higher ratio of Arkansans have a “rainy day fund,” compared to 2009, according to a study by the Financial Industry Regulatory Authority.

The “Financial Capability Study” compared the money use habits of American consumers in 2009 to 2012.  The study found that in 2009, 16 percent of Arkansans were spending more than they earned. That number rose to 20 percent in 2012. Nationally, the percentage of consumers who outspent their income declined slightly from 20 percent in 2009 to 19 percent in 2012.

The percentage of Arkansans who had a “rainy day fund,” or savings for unexpected situations such as economic downturns, illness or job loss, increased from 30 percent in 2009 to 37 percent in 2012. (See:

Creating an emergency fund is one of four financial goals that consumers need to build financial stability, said Laura Connerly, assistant professor for the University of Arkansas System Division of Agriculture.

“Personal finance can be confusing and many consumers aren’t sure where to start when planning for their financial future,” she said. “Long-term financial goals may vary for consumers based on future hopes and dreams but there are still some basic targets that apply to everyone.”

She recommends these four steps:

    1. Live within your income.  Sound simple?  “In many Arkansas households, consumers spend more than they earn,” Connerly said. “This usually means there is revolving debt – credit cards.”  The problem with carrying credit card debt from month to month is that interest continues to build.  Here’s an example: A $3,000 balance at 14.4 percent interest with a $90 minimum payment would take 11 years to pay off and you would pay more than $1,500 just in interest. Another concern with living month-to-month is that there is no safety net or plan for unexpected expenses.
    2. Build an emergency fund. “An emergency fund is your safety net for times of crisis or unexpected expenses.  Life happens – cars break down, kids get sick, people lose jobs,” Connerly said. “An emergency fund helps to keep you financially stable during times of crisis. If you’re just starting to build your emergency, set your goal at $500-$1,000.  Eventually, you should aim for a fund large enough to cover two to six months of expenses.”
    3. Keep adequate insurance. Maintain adequate amounts of auto, home, and health insurance.  “Without adequate insurance, a crisis could leave you thousands of dollars in debt and possibly even lead to bankruptcy,” she said. “Become familiar with terms used in insurance policies so you’ll know what to look for in benefits. Comparison shop for the best rates on a policy that has all of the features and benefits that you need.” 
    4. Increase your credit score. Consumers with the best scores receive the lowest interest rates on car and home loans. This can save thousands of dollars over the life of the loan. For example: Financing a $150,000 home with a 30-year fixed rate mortgage at an interest rate of 4.5 percent would result in $123,610 in interest over the life of the loan.  With a 3.5 percent interest rate, you would pay $92,484 in interest. You would save a total of more than $30,000.

For more information on personal finances, download these publications:

If you would like more information on healthy money managing, contact your county extension office or visit us online at

The Arkansas Cooperative Extension Service offers its programs to all eligible persons regardless of race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.


By Mary Hightower
The Cooperative Extension Service
U of A System Division of Agriculture

Media Contact: Mary Hightower
Dir. of Communication Services
U of A Division of Agriculture
Cooperative Extension Service
(501) 671-2126

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