A new survey authorized by the Fifth Third Bank
and performed by Research Now, reveals that Americans have limited financial knowledge and stability, based on
The Corliss Group online magazine report.
The survey was conducted from March 5 to 17 and
had 1,068 respondents.
Ninety percent of Americans didn't know that
individuals under the age of 50 can make contributions up to $18,000 a year to
a 401(k) plan.
57.9% of those surveyed said they were
financially knowledgeable and 38.5% understood the annual percentage rate (APR)
on their primary credit card.
In addition, 60% did not have sufficient savings
to survive for at least 6 months.
A certified financial planner Eric Meermann, who
is based in Scarsdale, N.Y., said that financial literacy is truly a big
concern and based on the survey, it is not focused on nearly enough.
55.8% of those surveyed knew what a credit score
measures. Meermann says that you should have a focus on getting a good credit
score if you wish to be able to accomplish many things that a lot of Americans
consider important. Simply because the better credit you have, the better terms
and fees you can get on your debt.
Strikingly, only 13.3% of the younger generation
knew the maximum amount they could put into a 401(k) plan for the year. This
indicates that the gaps in finances and knowledge among Millennials were also
surprising.
Stacie Haas, a spokeswoman for Fifth Third Bank
says that when she was younger, she would see her parents balancing their
checkbook and actually going to the bank to make a payment.
She thinks that you don't see that anymore, and
she also thinks that kids these days don't grow up witnessing the daily
management of money. It just happens around them or inside the cellphone or
laptop.
"They do not understand there's a real
management level to this. You don't just make it and spend it."
The Fifth Third Bank's senior vice president of
community and economic development, Camino Smith says that younger people are
not going to understand financial issues in school if they don't achieve it in
home, because schools usually doesn't have a lot of financial literacy courses
or themes provided within the curriculum.
Fifth Third Bank provides different type of
financial literacy program such as the "young bankers club" that has
educated thousands of fifth-graders about the benefits of maintaining a budget
and other guidelines regarding money.
Another program instructs adults how to pay for
a home, as well as retirement and higher education.
Smith added that there many Baby Boomers
retiring who are not prepared for retirement, and somehow they're going to have
to be supported or reduce their standard of living. And that's not good for the
economy or the country as a whole.
He also thinks that if individuals make financial
literacy more of a priority in the education system, it could truly help the
next generation, and generations to come.
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