Lack of Financial Literacy Costs Many Americans

Being financially literate has many positive benefits for your life. Understanding how finances works can set you up for success, but can also support your loved ones well into the future with things like gifting and estate planning. A recent study found that financial literacy cost 15% of US adults, a minimum of $10,000 in 2022. The research was gathered and reported by the National Financial Educators Council and shows that nearly 40% of adults say that their financial literacy costs them at least $500. That’s an increase from 2021 numbers. The average cost that an American loss due to lack of financial understanding was $1,819.

The survey was conducted with 3000 adults all over the nation between October and December. Financial literacy refers to many different money related topics like saving, income, budgeting, investing, and understanding how things like credit scores and interest rates work.

Other studies have attempted to learn more about just how much Americans know about their finances. A TIAA Institute GFLEC Personal Finance Index is a test used to determine basic financial literacy, and adults typically answer 50% of those money questions correctly. Lack of knowledge about finances can impact everything from saving for emergencies to how much debt you take on and more. Regardless of what last year looked like for you, this is a chance to turn the page and start fresh with your financial strategies.