Dave Pimper

402.721.0809

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.

Share |
 

Related Content

Supplementing Retirement Income with Whole Life

Supplementing Retirement Income with Whole Life

Whole Life insurance can add to your retirement income and allow you to live confidently.

Global and International Funds

Global and International Funds

Investors seeking world investments can choose between global and international funds. What's the difference?

Should I Buy or Lease an Auto?

Should I Buy or Lease an Auto?

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

 

Have A Question About This Topic?







Thank you! Oops!

Financial Hacks for Millennials: Going Back to School

As we continue to readjust our lives to a global pandemic, you may be wondering if now is the time to use that time to go back to school to pursue a higher degree, or if you can build new skills in other ways.

Exploring the Federal Student Grant Program

In this article, explore the benefits of the Federal Student Grant Program.

Pickleball in Retirement

Learn about the latest sport to sweep the nation with this informative article.

View all articles

Tax Freedom Day

Assess how many days you'll work to pay your federal tax liability.

Long-Term-Care Needs

Determine your potential long-term care needs and how long your current assets might last.

Annuity Comparison

This calculator compares a hypothetical fixed annuity with an account where the interest is taxed each year.

View all calculators

Investment Strategies for Retirement

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

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

5 Smart Investing Strategies

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

View all presentations

Retiring in a Post-Pandemic World

Imagine your ideal post-pandemic retirement with this animated video.

What Smart Investors Know

Savvy investors take the time to separate emotion from fact.

It May Be Time for a Financial Checkup

It’s never a bad time to speak with your financial professional about changes in your situation.

View all videos

Web site design by  Sorensen Web Design