A new study by Experian has highlighted significant financial knowledge gaps among Americans, particularly younger generations, that are contributing to costly errors.
The research, which surveyed 2,000 US adults, found that three out of five respondents believe their insufficient grasp of credit and personal finance has led them to make expensive financial mistakes.
Among those acknowledging mistakes, 60 percent reported losses exceeding $1,000. The issue is most acute for younger demographics, with 71 percent of Gen Zers and 70 percent of millennials admitting that their lack of financial knowledge has been financially detrimental. That includes 29 percent of Gen Zers and 38 percent of millennials who say they experienced financial losses of $5,000 or more.
The survey also shed light on the disconnect between the need and availability of financial education. Despite 78 percent of adults advocating for mandatory personal finance courses in high schools, only 25 states currently require such education, as reported by advocacy group Next Gen Personal Finance.
"Understanding credit and personal finance is paramount for financial well-being, especially for younger generations navigating today's financial landscape," Christina Roman, consumer education and advocacy manager at Experian, said in a statement.
““Financial mistakes, such as missed payments, overpaying on interest or simply not understanding the terms you are agreeing to, can come at a serious cost for consumers,” she added.
The study also revealed that two-thirds of adults are eager to enhance their understanding of personal finance, with interest even higher among Gen Zers and millennials at 80 percent and 79 percent, respectively.
Experian’s survey found adults most commonly acquire financial knowledge from family members (36 percent), educational institutions (33 percent), or online research (32 percent). When it came to trusted information sources, financial advisors led the pack with 48 percent, followed by financial institutions like banks and credit unions (45 percent) and national credit reporting agencies (37 percent).
Social media platforms also play a significant role in financial education. Approximately 30 percent of adults in the survey said they use social media to learn about personal finance, with 52 percent of Gen Zers and 47 percent of millennials turning to platforms like YouTube, TikTok, and Instagram.
Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.
Markets have always been unpredictable. What has changed is the amount of information investors are trying to process and the growing role advisors play in helping clients avoid emotional decisions
Six apartment deals, one "big account," and $2.7M in undocumented insider loans. Now the lawsuit lands
The Illinois order refers to Brandon Ellington’s investment program as a “Ponzi-like scheme.”
But the Amazon executive chair seems to want it both ways, arguing that taxing the ultra-wealthy won't help struggling Americans.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
