With the sudden emergence of COVID-19, quarantine and the closing of all non-essential businesses, stress and anxiety around money is at an all time high. In contrast, financial literacy in America is at an all time low and has been declining since 2009. According to a global survey conducted by Standard & Poor’s, the United States was ranked number 14 in terms of its citizens’ financial literacy and rated only 57% of adults as being financially educated. Let me say that again. Only 57% of adults in the United States have a BASIC level of understanding of financial concepts.
Another survey, conducted by FINRA’s Investor Education Foundation, showed that back in 2009, 42% of respondents were able to answer four or more questions correctly — in a five question survey — on the fundamentals of economics and personal finance. 9 years later, by 2018, the number of respondents that could successfully answer those same questions dropped to 34%. What’s even more shocking is that 44% of Americans don’t even have enough money saved to cover a $400 emergency and 33 % have $0 saved for retirement.
So what’s the disconnect? Why is it that such basic concepts and practices are so foreign to so many? The answer is simple. The financial industry was not designed for the average consumer to understand it. In fact, more than 75% of millennials say that shopping for financial services products leave them unsure and out of their depth. 70% say that financial services companies intentionally make the purchasing process and the “terms and agreements” unnecessarily confusing and frustrating. I think the real issue however, is that 77% of millennials believe that it is just a matter of time before the “unethical behavior” of the financial industry leads to another economic crisis. The traditional financial industry has spat on the trust of their consumers so many times that millennials would rather suffer and remain uneducated than seek help from a financial professional who may take advantage of them.
As a millennial who knew less than nothing about finances up until about 3 years ago, I can attest to how confusing, frustrating and manipulative traditional financial services companies and their representatives can be. It wasn’t until 2017 that I really started to take control of my own financial future and educate myself on the different tools and strategies available to me. Through my research, I found that people just like me were utilizing new and proprietary debt relief products that not only eliminated debts in record time, it also allowed them to save and grow their money. When I first heard about these financial tools, I thought that something this amazing could never exist. It sounded way too good to be true. I’m so glad that I was wrong. Now I work with Key 2 Debt Free to help spread the financial education that was withheld from me for so long.
For those of you who would like to test your financial literacy skills, here is a link to the big 3 and the big 5 questions that most people are unable to answer. https://gflec.org/education/questions-that-indicate-financial-literacy/#3
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