Shocking Facts About Americans Personal Finances
The majority of our high schools, colleges and even graduate schools don’t have a course teaching the really needed skill of personal finances. This is the reason why most Americans never took this kind of training and don’t know how to handle their personal finances. I have read about high school principals saying that this kind of knowledge doesn’t help the students on their preparation for the real world.
And when some school do provide some kind of personal finance class, it is more probable to be related with economics. There are a few lucky people that get the opportunity to study with great success the financial basics reading some books, doing internet research or talking to friends illustrated on that matter. But sadly, there are others that never do or they do it the tough way losing their money and assets. This deficiency in personal finances education causes severe problems and concern on the individuals. Next I will present some facts about personal finance that will shock you:
- United States, one of the most economically powerful countries in the world, is actually having filled near 1.5 million personal bankruptcies annually, which represents almost 1 in every 80 households. This means in the next 10 years, almost 10% of all households will fil bankruptcy.
- If you ask American adults about 401(k), less than 10 percent of them understand it well enough to explain it to another person. And when we go to a municipal bond, less than 1 in four will do it.
- Twenty five percent of the adults between the ages of 35 and 54 have not yet started to save for retirement and studies show that only one fifth of baby boomers are saving correctly for retirement.
- Financial stress is one of the main reasons for marital problems. And remember that one of every two marriages ends in separation in America.
- Do you know how the grace period on a credit card works? Almost 80% of American consumers don’t know it. And even more people doesn’t get that credit card interest starts accumulating straightaway on any purchase when you have a credit card with already outstanding debts.
- On a test made by a well-known Survey company, almost 35 percent of the individuals who took the test responded correctly less than 50 percent of the questions. These outcomes become shocking when you discover that the questions only had two or three multiple choice answers!
- A little more than half of the people who took a multiple choice investing test didn’t know that when you need to know the best measure of a mutual fund’s return you have to look at their total return.
There are huge consequences in our society because of this lack of personal finance knowledge. People spend too much money year after year buying inefficient and low quality financial products and all this lower the long term economic growth of the country. People just spend too much but save too low!