Survey: Many Americans Admit They Lack Basic Money Skills

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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.

But truly, there are simple steps people can take. Trae Bodge, senior editor for The Real Deal blog by RetailMeNot, said:

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.

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  • Ursula Petralia

    a colleague at the university whose credit cards were “over the limit” was told she needed tires. she thought it clever to trade in her 2-year-old car for a new one because that way she got 4 new tires at low monthly payments (for 6 years). hmmm?

    • Jcatz4

      If your colleague needed tires for a car that was only 2 yrs. old, then she must have done a lot of driving. So if that is the case, then that new car your colleague just bought will need new tires in 2 yrs. Makes no sense to me.

      • Ursula Petralia

        she was told she needed new tires – i doubt that was the case! she also thought that buying a new car was a reasonable way to get out of her financial bind!

        • Jcatz4

          I’m not college educated but I think I do have common sense. Taking a car to an auto mechanic (auto dealer or garage) freaks me out. I don’t like it if they try to take advantage of me. I have had that happen. Years ago, back in the 70’s, I had made an appointment for a very simple tune-up. It was a special advertised price. Well, they took my car in to their garage area where I couldn’t see what was going on. After about 20 mins., the man came out and ran down a whole list of things that he wanted to do to my car. That list included an air filter which he had listed at $26.+. When I questioned the price – he explained that my car required a special air filter. I told him I already knew that and that I knew it only needed to be replaced every 50,000 miles (or more if I drove the car a lot in very dusty, dirty places – which I didn’t). It was also something that I could easily replace myself. I also knew where I could purchase one for $12. I told the man that and his reply was that if I knew where I could get one for that price that I should go buy a dozen. Everything that he had listed ended up tripling the price of the special advertised tune-up. He ended up telling me that if he couldn’t do everything to my car that he wanted to do – he wasn’t going to do anything. So I told him I guess you’re not going to do anything then. After about 15 mins., I was called to the counter and I expected to be handed the keys to my car – but the man wouldn’t give me my keys until I paid him $10. – he said that was for putting the car back together! I’m not stupid – I know that my car had not been “taken apart” in any way. I wrote a check out for the $10. and came home and called my bank and explained what happened and stopped payment on the check. (I worked for the bank at the time so that was a FREE service for me) This happened at a Goodyear Service Center and I used to get statements from them for about a year. I also received phone calls from them because they were really pissed about the stopped payment. Perhaps they learned their lesson not to try to take advantage of a WOMAN!!

          • michwake

            Happens all the time. Even when I go in for an oil change they try to find a million things wrong with the car. I usually just have my boyfriend look things over with the list they give me and do most of my repairs. We have been together 7 years and he hasn’t killed me…yet. LOL

  • michwake

    I think it needs to be taught at least by high school if not sooner. It needs to be mandatory to graduate. I think people also need some education before getting a mortgage. Debt, in my opinion, is the worst thing. People need to live within their means. Once they learn how to do that (do you really need that expensive of a house?) then they will have money for their savings. Banks and other places tell people you can afford up to this amount and that is what they shop for instead of looking for something a little less. I also can’t believe how many people do not understand just the very basics of finance.