Imagine driving a car without a basic understanding of the rules of the road or how to operate the brakes. Scary, right??
Yet many Americans are taking similar risks by making financial decisions with minimal financial knowledge of investing, budgeting, and/or credit. The TIAA Institute conducted a survey on U.S. financial literacy, asking 28 basic questions about retirement saving, debt management, budgeting, and other financial matters. The average respondent answered only about half of the questions correctly.1
Another study, conducted by Pew Research, found that 1 in 4 Americans say that they won’t be able to pay their bills on time this month.2
It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial success rarely happens by accident; it is typically the outcome of a journey that starts with education. The more informed we are, the more informed our financial decisions may become. Fortunately, we can consult a wide range of resources in pursuit of greater financial knowledge.
April is Financial Literacy Month and if you are committed to increasing your financial literacy, think about turning to a financial professional with your questions.
Visit a U.S. Treasury-sponsored website like mymoney.gov, for federally-funded research reports, curriculum and lesson plans for educators, and helpful tools and games for teaching your children to save and plan for the future!
2. PewResearch,org, 2020