Wow: An Overwhelming Majority Of Americans Are Financially Illiterate

by
editors
Ignorance of basic financial issues will certainly not help an overwhelming majority of Americans struggling with rent and others expenditures.

Money

Do you know what a bond is? No?

Don’t worry, you’re not alone. In fact, you’re part of an overwhelming majority of Americans who couldn’t pass a very basic financial test.

Only 37 percent of Americans can pass a financial literacy test, according to a new study released by Financial Industry Regulatory Authority.

A group of 27,564 subjects were surveyed over the course of five months last year for the National Capability Study and only 37 percent were able to answer five questions related to bond prices, inflation rates, mortgages and risk management.

The 2015 performance is by far “the worst in the past six years,” FINRA found, noting that in 2009, 42 percent passed the quiz, getting four or five of the questions right. But in 2012, the numbers dropped to 39 percent and later to 37 percent last year.

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Although economic conditions and employment rates have improved after the 2008 financial recession, a huge chunk of the American population is just a paycheck away from the streets.

Moreover, a recent report by Harvard University stated nearly 11 million people in the United States spend at least 50 percent of their total income on housing and naturally struggle when it comes to other expenses.

Ignorance of basic financial issues will certainly not help an overwhelming majority of Americans struggling with rents and others expenditures.

“This research underscores the critical need for innovative strategies to equip consumers with the tools and education required to effectively manage their financial lives,” said FINRA Foundation Chairman Richard Ketchum in a press release.

“My hope is that policymakers, researchers, and advocates will use these findings to make more informed decisions about how to best reach underserved populations.”

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