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September 12, 2013 at 01:23 PM
Although most Americans know they’d get an A or a B on a test of saving and investing know-how, the grade they gave the average American was a D.
While there may be more than a little pride inflating respondents’ opinion of their own literacy level, respondents almost unanimously agreed that financial literacy is important — and something they don’t have enough of.
Whose job is it to teach Americans about finance? Three-quarters of respondents said it was up to them to learn how to be financially responsible. Fifty-six percent said parents are responsible for teaching financial lessons and 50% said schools and teachers should take responsibility. Just one-third of respondents put the responsibility for teaching Americans about finance on the financial industry.
“We learn is much of our financial behavior from our parents,” Barbara Nusbaum, a psychologist and money coach who consulted Genworth on the survey data, told ThinkAdvisor on Thursday. “I think a lot of times people don’t think we should learn from our parents because it’s just not done, so there isn’t the expectation that it should be done that way. I think it doesn’t happen because a lot of people don’t feel competent and confident enough to do it.”
Nusbaum said it was crucial to give more attention to that early education. “It’s crucial that we talk about money at home and that we do financial education in lots of different forms, but in ways that are appropriate for kids. There are a lot of blocks that we all have about money and what it means to us. It’s not just a knowledge gap, but it’s also a block around our personal feelings.”
While the economy was the most commonly cited reason for low retirement savings overall, respondents put a lot of the blame on individuals. Fifty-eight percent said lack of financial education was a reason for low savings, almost the same percentage who put the blame on irresponsible spending (57%).
As is usually the case in studies determining financial literacy, women scored themselves lower than men. Two-thirds of male respondents gave themselves an A or a B, while just 40% of women gave themselves the same score. Furthermore, women were more likely than men to say they went looking for more information out of fear (21% versus 14%).
Nusbaum (left) also noted that women tend to grade themselves harder than men. “Women, whether it’s about finance or other things, say they’re less good at things and men say they are better at things than their actual performances.”