Lack of Financial Literacy Cost Workers $1500 in 2023
How much does financial literacy cost?
That’s the question asked by the National Financial Educators Council (NFEC), who asked over 1,500 U.S. adults to estimate how much money they may have overlooked in 2023 due to a lack of knowledge over personal finances.
The final number came out to $1,506, according to the survey. When considering the over 240 million adults in the U.S., that figure exceeds to $388 billion this past year alone, finds the NFEC.
“Financial illiteracy in the U.S. has reached epidemic proportions,” said Vince Shorb, the NFEC’s CEO, in a statement. “We have never needed widespread financial education more than we do today. We must help all Americans gain the knowledge about managing their personal finances that will empower them to handle the real-world decisions they need to make. The future of our economy and society depends on it.”
In additional survey findings, the NFEC found that 60.6% of participants said a lack of financial knowledge cost them more than $500 last year, with 22.1% of them reporting losing more than $2,500.
According to the organization, the results were calculated by averaging the total number of participants who choose each response category, using the lowest number in the range.
U.S. workers are losing out on even more money than before—in 2021 and 2022, Americans said they overlooked $1,389 and $1,819, respectively, due to a lack of personal financial knowledge.
Plus, the NFEC notes that survey respondents may have underestimated these numbers, as those with lower levels of financial knowledge may not understand how much their illiteracy could actually cost them. “For example, lack of financial knowledge can lead to high interest rates, bank overdraft fees, identity theft, and vehicle impoundment – which may not be included in the estimates,” the NFEC writes.
This leaves the potential for these figures to come in at much higher than previously anticipated, the organization concludes.
Additional findings from the survey can be found here.
SEE ALSO:
- Financial Wellness Month: Younger Americans More Likely to Feel ‘Economically Empowered’
- FinFit Launches Safety Net Solution
- Advisor Q&A: Exploring America’s Financial Literacy Challenges
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
