The annual survey indicates how much Americans lose out on financial illiteracy
dallasAnd January 11, 2023 /PRNewswire/ — Today’s Americans must navigate an increasingly complex economic world, which demands a new set of basic money management skills. And financial illiteracy — the lack of vital personal finance knowledge — costs people money.
What is the price? This is what the National Council of Financial Educators seeks to illustrate through its annual Financial Literacy Survey. In 2022, the survey was conducted from October 23, 2022l December 5, 2022, with people all over America. A total of 3,001 participants answered one question: “Over the past year (2022), how much do you think you lost due to your lack of knowledge about personal finances?”
61.8%: $0 – $499
7.23%: 500 dollars – 999 dollars
7.96%: 1000 dollars – $2,499
7.98%: $2,500 – $9,999
15.04%: $10,000 +
The NFEC then calculates the average amount that people estimate they have lost due to a lack of financial literacy. This year, it was average $1,819. When we extend this number to represent trends among all 240 million adults in the United States, the estimated total money lost due to financial illiteracy totaled more than 436 billion dollars in 2022.
Review the full data and download our annual financial literacy report at https://www.financialeducatorscouncil.org/financial-illiteracy-costs/
Additional findings indicated that over 38% of survey respondents reported that financial illiteracy costs them more than 500 dollars last year, while 23.02% reported a loss $2,500. We arrived at these results by averaging the total number of participants choosing each response option, using the lowest number in each range.
“Financial illiteracy is an epidemic in the United States, and it comes at a time when the economic climate is changing rapidly,” he comments Vince Sharp, CEO of NFEC Corporation. “This means that financial education has never been more important than it is today. It is imperative that we help Americans gain the personal financial knowledge they need to handle the real-life situations they will face, both now and in the future.”
The updated Cost of Financial Literacy has been released with the new survey data. This report explores the cost of financial illiteracy in different areas of people’s lives. See the full report here: https://www.financialeducatorscouncil.org/financial-illiteracy-costs/
The NFEC has conducted this survey annually since 2017 as part of its ongoing research effort to shed light on the true costs of financial illiteracy. These statistics underscore the importance of addressing problems caused by lack of financial knowledge.
The survey of the previous year — 2021 — showed that Americans lost, on average $1,389 due to financial illiteracy. In 2022, the average has jumped to $1,819 This is the highest average since the first annual survey was conducted 6 years ago.
Lack of financial education leads to a range of realistic consequences that can include high loan and credit card interest, bank overdrafts, identity theft, and car impoundment. Moreover, the reported data Here it may represent underestimating actual losses due to financial illiteracy, because people who lack financial skills may not even realize how much they cost.
the National Council of Financial Educators (NFEC) It is an IACET-accredited provider of financial education and a B Corporation certification. The organization promotes financial wellness by publishing educational resources and conducting financial wellness Advocacy at the national level. NFEC’s research efforts seek to characterize the financial health of individuals in the United States and abroad. Previous research findings have found strong associations between individuals’ financial behaviors and attitudes and their personal financial capabilities.
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SOURCE National Financial Educators Council. The national resource for financial educators