Nearly 43 percent of participants in a recent study report stating they are unsure about what a 401(k) retirement plan is is. This is a significant gap in financial understanding among Americans.
To assess the country’s financial literacy and preparation to adopt good economic habits, OnePoll polled 2,000 US residents for Beyond Finance.
Exactly 9% of respondents think they are more financially educated than the average person. Only 30% of people believe they can win in a trivia game involving money, and 35 % confess to not knowing what the term “interest” means in the context of personal finance.
Additionally, according to the study, about 40% of those surveyed said they feared breaking their financial habits.
Gen Z people exhibit the highest commitment among generations to change their financial habits, whereas millennials appear to have the lowest likelihood of making positive changes. One-quarter of respondents said they put off finishing personal finance projects because of stress, and one-quarter said they are financially hopeless because they think their situation won’t get worse.
“Some individuals tend to overlook taking inventory of their financial condition, and others can be nervously consumed by it,” Erika Rasure, key financial wellness mentor of Beyond Finance, said in a statement.
Despite these challenges, 80 percent of people in the surveys said they try to set a monthly budget. The most diligent people in the millennial and baby boomers were the 81 percent of those who said they had saving ideas.
But, sticking to budgets continuously proves difficult. On average, respondents said they follow their resources only 66 percent of the time, with baby boomer being the most disciplined at 76 percent, and Gen Z least likely to follow through at 58 percent.
The survey revealed various money-saving strategies, including buying sale items ( 53 percent ), utilizing coupons and discount codes ( 47 percent ), and reining in clothing expenses ( 45 percent ). Another 36% of respondents said they deprioritize or deviate travel from their vacation plans, while another 39% said they cut back on going out to bars and restaurants.
The survey also addressed the private side of financing, with 39 percent of people in dedicated relationships claiming that bad spending habits, either on their or their partners, have a negative effect. On the flip side, 63 percentage of coupled respondents concur that combining financial education with other factors may improve their chances of developing better wealth behavior.
The more you understand about money and personal income, the better equipped you will be to make wiser decisions and develop a strategy to achieve your objectives, Rasure said.