Based on a new survey from National Financial Educators Council, the of financial knowledge is costing Americans collectively more than $2.3 trillion dollars over a lifetime.
Respondents estimated that their lack of financial knowledge cost them an average of $9,724.83 (calculated by averaging the total number of respondents choosing each category, using the lowest number in each spread).
Reported lifetime losses over $15,000 were reported by 1 out of 3 respondents, and nearly 1 in 4 people reported losses over $30,000 due to a lack of financial knowledge. Respondents in the 55 – 64-year-old category estimated experiencing the highest losses, with 41.5% believing they had lost $15,000 or more.
Respondents who estimated their losses at $30,000+ broke down by age as follows:
18 – 24 15.8%
25 – 34 16%
35 – 44 25.4%
45 – 54 28.4%
55 – 64 32.7%
The 18 – 24 year olds reported the lowest losses, with 42.5% stating that lack of financial knowledge cost them between $0 and $999.
These survey results represent the first part of a larger research effort aimed at defining risks and costs associated with financial mismanagement.
The goal of the initial survey was to gain better understanding of people’s estimates of financial losses they incurred due to their lack of knowledge regarding personal finance.
Lack of personal finance knowledge costs people money: bank fees, interest on credit card debt, higher interest rates on loans, and investment losses are just a few examples. Results of this survey do not capture those areas where respondents lost money, but do not recall or may not even know they lost money.
The National Financial Educators Council is a financial education resource provider, industry advocate, and thought leader.