The survey asked 1,515 respondents in six different age groups, “During the past year (2017), about how much money do you think you lost because you lacked knowledge about personal finances?”
Based on the categories ranges provided, 18 percent reported financial losses over $2,500, while 41 percent said they lost over $500 for the year because of their lack of knowledge about personal finance.
Extrapolating this to 240 million adults in the United States, that is about $280 billion lost last year due to lack of financial knowledge.
“Americans today have to negotiate a very complex financial and economic landscape, and given recent changes to the tax code and new digital currency options, that complexity is only going to increase,” Vince Shorb, CEO of NFEC, a financial education resource provider, said. “Improving people’s ability to make informed financial decisions and increasing access to financial education programs is more important now than ever before.”
The lack of knowledge about money and finances can lead to more money spent on bank charges, credit card debt interest, and interest rates. It can also lead to investment losses. These are just some of the areas where people may be wasting money, but there are certainly others.
Last year, the NFEC did a similar study where it asks people how much money they lost in their lifetime due to lack of financial knowledge. It estimated that the average American lost about $9,725 in their life.