A new report by United Way of Salt Lake City has found that a large number of Utahns are unprepared to face any major short-term financial challenge and also are failing to address their family's long-term economic security.

"Declaring bankruptcy may be a last resort for many people, but too many Utah families still are teetering on the edge of financial disaster regardless of whether bankruptcy comes into play," said Deborah Bayle Nielsen, chief executive of the United Way of Salt Lake.

In its study titled Living on the Edge: Utahns' Perspectives on Bankruptcy and Financial Security, the United Way notes that many Utahns are aware of the need to save more, but too many still live paycheck to paycheck.

"Having a commitment to saving and being able to do it are two different things," Nielsen said. "But we need to get the message out that there are ways for families to begin saving regardless of their income levels."

Bill Crim, director of strategic initiatives and public policy for the local United Way, said improving the financial security of Utah families is as important as securing funding for education or for future transportation needs.

The United Way study, which involved months of research, interviews and contributions by financial experts, offered a number of proposals Crim said can lead to long-term solutions to the problem.

People can begin by joining Utah Saves, a United Way-developed initiative that provides enrollees with tools and suggestions to help save. They also can take advantage of a new IRS intuitive that allows a portion of personal income tax refunds to be directed to a savings account.

If they haven't already, Utahns should enroll in the 401(k) plans offered by their employers or open an IRA, Crim said.

The study, however, also offers a number of policy recommendations that the United Way of Salt Lake believes can improve the financial stability of moderate and low-income households.

The study suggests the legislature establish an Earned Income Tax Credit, similar to the one available on the federal level. It suggests that the asset limits that prevent many strapped Utahns from taking advantage of Medicaid, welfare and food stamp programs be raised.

It wants to increase the availability of health insurance coverage, particularly for working adults, and supports a "modest" increase in the state's minimum wage.

Crim said the United Way of Salt Lake would like to see the creation of a "Financial Security Council" of business, religious and public-sector leaders to help develop solutions of the financial problems - low incomes, a lack of health care insurance coverage and little financial education - that are plaguing families in the state.

steve@sltrib.com