WASHINGTON-Low-income households are not the only ones who are asset poor. Many moderate- and even middle-income households also do not have enough rainy day savings or assets for a comfortable retirement, according to a new study by Ohio State University, sponsored by CUNA, the National Credit Union Foundation and the Consumer Federation of America. "Traditionally, as a society, we have defined affluence largely in terms of income," CFA Executive Director Stephen Brobeck explained. "Those with high incomes are considered to be affluent and those with low incomes are considered to be poor. The Consumer Federation of America and credit unions would argue that affluence should be defined in terms of wealth as well as income." Just over 25% of all American households (25.8 million) had less than $10,000 in net assets (wealth-poor), in 1998. Many of those (over 30%) had less than $10,000 in annual income, and 40% with less than $10,000 in net assets made between $10,000 and $25,000 per year, leaving 30% making over $25,000 per year. Between 1992 and 1998, the net assets of those households with incomes under $25,000 fell 6%. The heads of household in these cases tended to be younger, less educated, single minorities who rent rather than own their domicile. The other group consists mostly of young debtors. However, that is not always true. Of these households with net assets under $10,000, 10% are over age 65, 7% have incomes of at least $50,000, and 14% are homeowners. Additionally, of the wealth-poor households with incomes of at least $50,000, 14% do not save, 13% plan only a few months in advance, and 11% spend more than their incomes. Median consumer debt per negative net asset household is $11,800, far more than the $200 dollars of those with $0 to $9,999 in assets. "If they don't build their wealth during their working years, they will either not be able to retire or will be forced to accept a much lower standard of living when they do retire," Brobeck said. The study also found that 41% of households with low net assets report that they do not save regularly (only 22% say they do) compared with 23% of all households. Another 64% of those with low net assets said they spent more than they made last year, in contrast to 44% of overall households. Only 36% of the wealth-poor said they spent less than their income. CUNA President and CEO Dan Mica, also the NCUF president and a CFA Board member, told reporters at the press conference where the study was released, that it is of utmost importance to get people to stop living from paycheck-to-paycheck. "It takes a mind change, and that's something in this study that we try to point out consistently. Instead of thinking in spending and credit, we need to redirect thinking on savings and opportunities," he said. Mica added that the study results are a perfect fit for the credit union mission and pointed to CUNA's work with the National Endowment for Financial Education in bringing financial education to 60,000 students in over 600 schools nationwide. NCUF Executive Director Gary Officer commented that the study simply reinforced what people in the credit union movement have known for some time. "This in some ways validates what many of us in the credit union movement have long expected: that we have in this country a crisis of savings by many, many Americans.We are a nation of spenders, not savers, which when the economy is performing well can be disguised; when the economy is contracting, it's a recipe for economic disaster," Officer warned. NCUF supports and serves on the advisory committee to CFA's American Saves program in which 132 cities have launched or are organizing local savings campaigns which try to enroll residents to increase savings and build wealth. These campaigns typically offer no-fee savings accounts, a consumer savings hotline, motivational workshops, financial consultants and planners, and Savers' clubs. Check it out at www.americasaves.org. The study is based on the latest data from the Federal Reserve Board's Survey of Consumer Finances from 1998. Ohio State University Professor Catherine Montalto analyzed the statistics. [email protected]