If you lost your job and sole source of income tomorrow, could you live for more than a month on what you have saved? If you answered “no,” you’re not alone.
A survey conducted by RetailMeNot and The Omnibus Co. — just in time for Financial Literacy Month — found that just 52 percent of respondents could live for more than a month on what they have socked away in their savings accounts.
If that’s not concerning enough, nearly half of those surveyed said they lack knowledge or understanding, and thus confidence, about their personal finances. Many people are in dire need of financial literacy.
Saving money is just one part of the financial literacy equation. It is also important that consumers spend wisely to be able to afford the items they need. Making small adjustments to shopping behaviors, like utilizing discounts for everyday purchases, in addition to putting away even a small amount each month, are important steps toward achieving overall financial health.
Other key findings of the survey include:
- Savings? One in 4 respondents – 30 percent of men and 20 percent of women – said they had no idea how much money was in their savings account.
- Worried about the future. Nearly 80 percent of respondents said they are concerned that they will not be able to retire at the time they wanted, nor will they be able to afford the lifestyle they desire. This is especially true of unmarried people.
- Financial education. More than 92 percent of respondents said it’s the parents’ responsibility to educate the next generation about money. That may be difficult considering less than half of parents said they’re confident about financial issues themselves.
- Chores and money. About 70 percent of participants think doing chores for allowance “is one of the best ways to teach children financial lessons,” RetailMeNot said.
With 8 in 10 people reporting being worried about retirement, it’s alarming that a recent study by financial security company Genworth showed that relatively few Americans take the initiative to improve their financial savviness, even though it means a larger nest egg at retirement.
Sixty percent of men and 34 percent of women told Genworth that they are actively pursuing education about personal finance matters.
New York-based psychologist and money coach Barbara Nusbaum told Genworth that access to information is not the problem.
Rather, it is a feeling of being overwhelmed – by the complexity of financial products, by the amount of time perceived as necessary to improve one’s financial knowledge and a disconnect between financial needs and personal needs. An hour invested today in gaining the financial know-how that will make your life, family and money more secure will pay tremendous dividends over the long run.
Remember, April is Financial Literacy Month. What better time to educate yourself about personal finance?
Do you consider yourself financially savvy? Share your comments below or on our Facebook page.