Financial illiteracy and personal bankruptcy have reached alarming rates in Tennessee and throughout the nation, posing a significant risk for women. In 2003, 1.6 million Americans filed for bankruptcy – the highest amount in history and twice the number since 1993. In just twenty years, from 1981-2001, the number of women filing petitions for bankruptcy increased 662%, more than double the rate of increase for males during this period. Single filing women account for 40% of total filers. Tennessee has the second highest bankruptcy rate in the nation, with 63,344 filings in 2003.

Some of the most commonly documented reasons women file for bankruptcy include divorce, unemployment and inability to pay medical bills. Tennessee has one of the top five highest divorce rates, when compared with other states. Nationally and in Tennessee, women have higher unemployment rates than men. Additionally, the average Tennessee woman earns $23,232.00 annually versus $31,340.00 for the average man. The average US woman earns $26,884.00 annually versus $37, 339.00 for the average US man.

Tennessee women’s comprehension of personal finances is essential to their ability to become self-sufficient. It is reported that the likelihood of being on welfare is inversely proportional to financial literacy levels. The amount of money that a family needs to be economically self-sufficient depends on the family size and composition, age of children, and where they live in Tennessee. The average Tennessee woman who earns $23,232.00 annually does not earn enough money to live self-sufficiently in Knox, Shelby or Davidson Counties if she has more than one child and no other income.

The importance of youth financial literacy is critical as the buying power of young people has skyrocketed over the last few decades. Children’s spending has roughly doubled every 10 years for the past three decades and tripled in the 1990s. In 2003, teens spent $175 billion, averaging $103.00 per week and 8-14 year olds, so called “tweens,” spent $39 billion a year, averaging $66.00 per week. Children’s, tweens’ and teens’ direct buying power is expected to exceed $51.8 billion by 2006.

The Financial Educational Survey done by Capitol one found that more than 70% of parents say they have spoken with their teens about credit and using credit cards wisely, while less than 44% of the teenaged children of those respondents say their parents have talked to them about credit cards. Additionally, 54% of parents rate their teenager’s knowledge about managing money as “good” or “excellent,” while an overwhelming 78% of the teenaged children of those respondents rated their knowledge as merely average or even poor.

To improve women’s financial literacy, the Council is hosting the first statewide Economic Summit for Women on December 3, 2004 to raise awareness and understanding about the economic issues of concern for women; launching a financial literacy campaign for teen women in Middle Tennessee and Shelby County, reaching 500 by May 2005; and has hosted financial literacy workshops for adult women and young mothers, reaching 75-100.