3244 Brookside Rd 
Suite 140 
Stockton, CA 95219

Lifestyle Read Time: 3 min

The Financial Literacy Crisis

Imagine driving a car without a basic understanding of the rules of the road or even how to operate it. Scary thought.

Here’s another scary circumstance – one that is all too real. Many Americans are making financial decisions with minimal financial knowledge of investing, budgeting, and credit. The TIAA Institute conducted a survey on U.S. financial literacy, asking 28 basic questions about retirement saving, debt management, budgeting, and other financial matters. The average respondent answered only about half of the questions correctly.1

Another study, conducted by Pew Research, found that one in four Americans say that they won’t be able to pay their bills on time this month.2

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial success rarely happens by accident; it is typically the outcome of a journey that starts with education.

One of the obstacles to greater financial literacy is the so-called “Lake Wobegon effect.” In other words, we all consider ourselves above average, and based on that belief, it only follows that our financial understanding is above average. Unfortunately, this assumption has a flaw: it may discourage us from learning as much as we need in order to continue adapting to an ever-changing financial landscape.

The more informed we are, the more informed our financial decisions may become. Fortunately, we can consult a wide range of resources in pursuit of greater financial knowledge.

If you are committed to increasing your financial literacy, think about turning to financial professionals with your questions or visit a U.S. Treasury-sponsored website, mymoney.gov, which was created for that very purpose.3

1.TIAAInstitute.org, 2020
2. PewResearch,org, 2020
3. MyMoney.gov, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

The Anatomy of an Index

The Anatomy of an Index

The S&P 500 represents a large portion of the value of the U.S. equity market, it may be worth understanding.

A Brief Guide To Condo Insurance

A Brief Guide To Condo Insurance

Important items to consider when purchasing condo insurance.

Retiring Wild: National Parks and You

Retiring Wild: National Parks and You

Get ready to enjoy America’s national park system with this helpful article.

 

Have A Question About This Topic?







Thank you! Oops!

How Big is Money?

Learn a little about worldwide currency in this fun infographic

Investment Challenges of the Affluent Investor

Affluent investors face unique challenges when putting together an investment strategy. Make sure you keep these in mind.

Will Power

Preparing for the eventual distribution of your assets may not sound enticing. But a will puts the power in your hands.

View all articles

Home Mortgage Deduction

Use this calculator to assess the potential benefits of a home mortgage deduction.

What Is the Dividend Yield?

This calculator helps determine your pre-tax and after-tax dividend yield on a particular stock.

Should I Buy or Lease an Auto?

This calculator compares the financial impact of leasing versus buying an automobile.

View all calculators

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

View all presentations

Jane Bond: Scaling the Ladder

Agent Jane Bond is on the case, uncovering the mystery of bond laddering.

A Fruitful Retirement: Social Security Benefit

Taking your Social Security benefits at the right time may help maximize your benefit.

How to Retire Early

Retiring early sounds like a dream come true, but it’s important to take a look at the cold, hard facts.

View all videos