We know plenty of Americans are challenged by financial literacy, but a new poll highlights just how challenged many are when it comes to the basics. As in, a national survey of 2,000 Americans, evenly split by generation, revealed that 43% don’t know what a 401(k) is.
The study, commissioned by Beyond Finance for Financial Practice Week and conducted by OnePoll, examined Americans’ financial literacy, commitment to learning and adopting healthy money habits, and feelings regarding their bank accounts and financial futures. The results revealed a significant lack of confidence among respondents regarding their financial literacy, with only 30% believing they could win a game of personal finance trivia.
Only two in five respondents (39%) consider themselves more financially literate than others. And over a third (35%) don’t know what “interest” is in a financial context.
Four in 10 Americans (39%) admit they procrastinate when implementing healthy financial habits. Gen Z are most likely to procrastinate (49%) while Baby Boomers are least likely to procrastinate (22%).
The top reasons respondents cited for postponing personal finance tasks include stress (25%), feeling their financial health is already poor and can’t get any worse (16%), and forgetfulness (13%).
“Unfortunately, avoiding looking at your finances and making healthy changes is incredibly common,” said Dr. Erika Rasure, chief financial wellness advisor of Beyond Finance, one of the nation’s largest debt resolution organizations. “Some people tend to neglect taking stock of their financial situation, and others can become nervously consumed by it. There’s a middle ground to take when improving your financial health—learn healthy money habits, pay attention and make small, achievable adjustments to your spending and habits.”
“Some people tend to neglect taking stock of their financial situation, and others can become nervously consumed by it.”
Dr. Erika Rasure, Beyond Finance
For those trying to save money, a considerable portion of respondents said they limit themselves to infrequent social outings to bars and restaurants (39%), minimal travel or not traveling at all (36%), and rarely or never buying coffee at coffee shops (35%). Notably, 33% of respondents said they never take vacations.
Finances also influence relationships: Nearly four in 10 (39%) reported that their or their partner’s unhealthy spending habits have negatively affected their relationship. A majority of those in relationships (63%) agreed that learning about personal finance as a couple would increase their chances of improving money habits successfully in the future.
“The first step in a happier financial future is education,” Dr. Rasure said. “The more you know about money and personal finances, the more equipped you’ll be to make better decisions and create a plan to meet your goals. That’s why Financial Practice Week is important. We want to encourage people to learn the money habits and practices they’ve been putting off so they can make progress toward a more stable, optimistic future.”
Financial Practice Week will be observed for the first time from April 22-26, 2024. The week is designed to encourage consumers to embrace positive, actionable changes in financial behaviors, fostering a shift away from the cycle of debt. This recognition aligns with the broader initiatives the financial services industry encourages during April’s “Financial Literacy Month.”
Senators declare April as ‘Financial Literacy Month’
Ranking Member Tim Scott (R-SC) and fellow member of the Senate Banking Committee, Senator Jack Reed (D-RI), are leading a resolution to declare April 2024 as Financial Literacy Month. The senators are co-chairs of the Financial Literacy Caucus.
“Financial literacy is the cornerstone to achieving financial independence and opening the pathway to the American Dream.”
Sen. Tim Scott (R-SC)
Recognized by the U.S. Senate since 2004, Financial Literacy Month is a national celebration of financial empowerment that raises awareness on the importance of financial education and providing resources to help Americans of all ages develop and maintain healthy financial habits.
“Financial literacy is the cornerstone to achieving financial independence and opening the pathway to the American Dream. Throughout my time in Congress, and as the top Republican on the Senate Banking Committee, I’ve made it my mission to champion programs and resources that make financial education more accessible. This resolution furthers that work by helping to bring awareness to this important topic,” Scott said.
“From managing a household budget to making major purchases, paying for college, starting a business, and laying the foundation for a secure retirement, financial literacy is a lifelong endeavor,” Reed said. “Unfortunately, too many Americans lack basic financial literacy to make informed decisions, and this has impacts on their children, local communities, and generations to come. Raising awareness about the resources available to improve financial literacy is the first step on the path to a financially secure future. I’m pleased our Senate colleagues are coming together on a bipartisan basis to recognize and celebrate the twentieth annual Financial Literacy Month.”
Senators Ron Wyden (D-OR), Dick Durbin (D-IL), Susan Collins (R-ME), Mike Crapo (R-ID), Sheldon Whitehouse (D-RI), John Barrasso (R-WY), Roger Wicker (R-MS), Jim Risch (R-ID), Joe Manchin (D-WV), John Boozman (R-AR), Marco Rubio (R-FL), Angus King (I-ME), Shelley Moore Capito (R-WV), Bill Cassidy, M.D. (R-LA), Steve Daines (R-MT), Mike Rounds (R-SD), Todd Young (R-IN), Maggie Hassan (D-NH), Catherine Cortez Masto (D-NV), Cindy Hyde-Smith (R-MS), Kevin Cramer (R-ND), Mitt Romney (R-UT), Mike Braun (R-IN), Rick Scott (R-FL), and Ted Budd (R-NC) co-sponsored the resolution.
For full text of the resolution, click here.
SEE ALSO:
• Participants are Failing at Retirement Literacy
• Lack of Financial Literacy Cost Workers $1500 in 2023
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
