By SWNS Staff
Two in five (41%) Americans are intimidated by their own finances, according to new research.
The study, which asked a nationally representative panel of 2,000 people about their knowledge of their finances, found that those who are intimidated by their finances are more likely to fit within the millennial age bracket.
Millennials aged 25-34 are also the most likely to “fake it ‘till they make it” when it comes to their finances — at 57% compared to 42% of all Americans polled.
Seven in ten respondents said they’ve resorted to teaching themselves important aspects of their finances, such as budgeting, credit card interest and investing.
Conducted by OnePoll on behalf of Ria Money Transfer, the survey showed that the most complicated finance topics that people still struggle to understand are how the stock market works (32%), how to invest (30%) and the difference between stocks and bonds (27%).
Other common financial hurdles include doing taxes (22%), planning for retirement (20%) and understanding what a 401K is (19%).
Just over half (52%) of Americans want to turn their financial confidence around and learn more about their finances, but don’t know where to go for help. Another 50% struggle with wanting to invest their money without knowing where to start.
Currently, Americans prefer consulting online searches (39%) and friends and family (33%) for information about their finances.
On average, people believe they need about $3,881 saved up in order to start investing. Nearly one in four (23%) think the average 30-year-old should have at least $10,000 in their savings account.
Yet two in five are too afraid to ask a professional for help because they feel like they can’t afford it (42%), are embarrassed to ask (40%) or simply don’t know where to get help from (39%).
“Financial literacy is much more than just knowing how to save. It is an essential skillset which is often overlooked and typically underestimated,” said Taylor Kwan, VP of Financial Planning and Analysis at Ria Money Transfer. “This knowledge is essential for everyone regardless of age or gender. Any improvement in financial literacy will have a significant impact on people's ability to provide for themselves and for their families in the future.”
A battle of the sexes may also be to blame, as half of female respondents (51%) still think finances and investing are male-dominated sectors — joined by even more men who agree (54%).
Others choose not to ask for help because they don’t think they understand finance terms (33%) or don’t have enough time (28%).
When they finally do seek out advice, they focus most frequently on saving for the future (35%), investing (32%) and maintaining a budget (28%).
Forty-four percent feel like they’re left in the dust because their friends and family know more about finances than they do, and 65% trust their families with information about their finances.
Perhaps this is why half of respondents (49%) said they were determined to learn more about their finances so they can teach their own children about important financial decisions in the future.
Out of all the basic financial lessons out there, Americans seem most interested in teaching their children how to save money (52%), how to manage their own finances (47%) and how to pay bills (44%).
“As these findings show, the reality is that there isn’t a natural place for financial education to come into play. That’s why we prioritize providing personal finance insights for our customers and the public at large through our blog and social media channels,” said Gabrielle van Welie, Global Content Manager at Ria Money Transfer. “Online banking and other financial services are also becoming more globalized and accessible, offering people options to save, invest, and send money, which can represent a lifeline for millions.”
TOP FINANCE TOPICS PEOPLE DON’T UNDERSTAND
- How the stock market works (32%)
- How to invest (30%)
- The difference between stocks and bonds (27%)
- How to do taxes (22%)
- How to plan for retirement (20%)
TOP FINANCIAL TERMS PEOPLE ACTUALLY KNOW
- 401K (56%)
- FICO score (52%)
- Adjusted gross income (46%)
- Compound interest (41%)
- Escrow (41%)