Education statistics
According to a study conducted by The Nation’s Report Card, which grades states from A to F in terms of their financial literacy, only 15 out of 50 received an (A/B) rating. Though there has been a greater emphasis on increasing financial knowledge, it may be of concern that our nation’s capital, Washington D.C., along with three states, received an F.
Of course, a big problem with financial education is that most schools don’t teach it. People say this is a big reason why they lack financial literacy. For instance, Credit Karma surveyed 1,049 people. They found:
- 63% of American adults think personal finance education should be taught in schools
- 41% say they had to teach themselves about personal finance
- One-third (33%) feel that their financial knowledge holds back their financial progress
- 77% want politicians to push for financial education in schools
- Americans would be willing to give up: Happy hour (35%), dating apps (29%), morning coffee (24%), vacation days (12%) and even their sex lives (8%) for better financial education and to get out of debt.
Another organization called the National Financial Educators Council (NFEC) has a National Financial Literacy Test that they’ve offered on their website since 2012. Since January 1, 2012, 15,797 participants between the ages of 15-18 have taken the test. The average score is only 67.93%. Sadly, even adults that have taken the test don’t fare much better.
- People aged 25-35 had an average score of 76.20%
- For participants aged 36-50, the average grade was 77.37%
- Even participants over age 51 only scored 78.13%
So even the people with the most life knowledge and real-world experience were barely able to pass a basic financial literacy test, designed for young Americans who are just starting.
Financial literacy impacts your everyday financial life
The encouraging news is that consumers themselves seem to be taking steps to get educated. Last year’s (2021) Country Financial Security Index – an annual survey that polls over 1,000 American adults to assess how they feel about the stability of their finances – showed some promising results:
- 61% rated their financial security at Good/Excellent
- 83% say they’ll be able to get out of debt
- 64% believe they are confident of enjoying a comfortable retirement
The cost of financial illiteracy
A survey from the NFEC shows the realities of not being financially literate.
From November 2021 to December 2021, 3,389 U.S. adults were asked, “During the past year, about how much money do you think you lost because you lacked knowledge about personal finances?”
- $0 – $499: 63%
- $500 – $999: 10.6%
- $1,000 – $2,499: 8.5%
- $2,500 – $9,999: 7.2%
- $10,000 +: 10.7%
The average estimated loss was $1,389.06. Extrapolating the results to encompass the entire country and you find that financial illiteracy cost U.S. consumers more than $352 billion in 2021 alone. While that’s down from the $1,634 in 2020, it does highlight the fact that more needs to be done to promote financial literacy nationwide.
Education or assistance – we’re here to help
Whether you have financial questions that need expert answers or you need one-on-one credit counseling to help you overcome financial challenges that you don’t know how to overcome on your own, we’re here for you. Call Consolidated Credit today at (844) 276-1544 to speak with a certified credit counselor or tell us about your situation by completing our online application for a free consultation.
