Studies show that financial literacy — which generally means understanding money topics ranging from income, budgeting, saving and investing — is lacking among many U.S. adults.
For instance, on average, adults correctly answered only 50% of the 28 basic money questions in the 2022 TIAA Institute-GFLEC Personal Finance index, which is the sixth annual barometer of financial literacy. And what’s worse: 23% of respondents couldn’t correctly answer more than seven of the 28 basic money questions. That percentage is higher than its been any other year.
U.S. Adults’ Lack of Financial Literacy is Costing Them
A report from the National Financial Educators Council shows that 38% of individuals who took a recent survey said their lack of financial literacy cost them at least $500 in 2022, including 15% who said it set them back by $10,000 or more. That’s up from about 11% in 2021.
The majority of respondents, or 68%, said poor financial literacy cost them somewhere from zero to $499.
The problem is that the lack of knowledge can affect everything from how much you save — whether for emergencies or long-term goals like retirement — to how much debt you take on and under what terms.
Related: “Good Debt” Versus “Bad Debt”
Because financial literacy isn’t taught in school, many adults end up learning from their mistakes.
One of our driving goals at Bautis Financial is to teach financial literacy. Through interactive webinars, educational podcasts and blog posts, and weekly newsletters, we seek to educate on a wide variety of financial topics.
Our team of financial advisors are also available for one-on-one consultations, where you can ask questions or run scenarios. You’re welcome to schedule a call below.
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