Four in 10 Americans admit they procrastinate when implementing healthy financial habits. Which would be less alarming if they also didn’t lack financial knowledge. A mere two in five respondents consider themselves more financially literate than others — and 35% don’t know what “interest” means in a financial context.
Those are the conclusions of a national OnePoll survey of 2,000 Americans, evenly split by generation. Only 30% believe they could win a game of personal finance trivia. The study, commissioned by Beyond Finance for Financial Practice Week, further reveals 43% of respondents have no idea what a 401(k) is — the essential building block for most American’s retirement.
The future of retirement continues to be a topic of conversation across the country. A survey from the National Council on Aging found that most older Americans lack the resources that would let them deal with “financial shocks” that might come up in their retirement. 80% of households with older adults struggle with finances or are at risk of dealing with economic insecurity as they age.
Start Young
There are a number of reasons people might put off planning for their financial future. The top reasons respondents cited include stress (25%), feeling their financial health is already poor and can’t get any worse (16%), and forgetfulness (13%).
Gen Z are most likely to procrastinate, while baby boomers are least likely to delay the inevitable.
“Unfortunately, avoiding looking at your finances and making healthy changes is incredibly common,” explains Dr. Erika Rasure, Chief Financial Wellness Advisor of Beyond Finance, which can be overwhelming. Some people tend to neglect taking stock of their financial situation, and others can become nervously consumed by it. There’s a middle ground to take when improving your financial health — learn healthy money habits, pay attention, and make small, achievable adjustments to your spending and habits.”
The survey examined Americans’ financial literacy, and their commitment to learn and adopt healthy money habits. The average American typically checks their banking app twice daily, but more than a quarter of all respondents avoid signing into their banking apps even once a day.
Exactly half of respondents say they feel nervous when opening their banking portal, with Gen Z feeling most uncomfortable at 65%, while baby boomers feel the most calm.
The Answers in the Budget
Economists and personal finance gurus have repeated almost endlessly how important budgeting is, although their message seems to be falling on deaf ears. Eight in ten respondents try to hold themselves accountable to a monthly budget, with millennials and baby boomers tying at 81% for the best-laid financial plans.
Of those who do create a monthly budget, respondents only stick to it 66% of the time on average, with baby boomers exhibiting the highest accountability (76%) and Gen Z deviating the most from their budgets (58%).
For those trying to save their hard-earned money, the most popular strategies include buying on-sale items (53%), using coupons and discount codes (47%), limiting spending on clothing (45%) and shopping at discount stores (42%).
A considerable portion resort to more drastic measures to save money, such as limiting social outings to bars and restaurants, and rarely or never indulging in coffee at coffee shops or buying gifts.
One drastic trend is planning for minimal travel — or eliminating it completely. One third of respondents say they never take vacations in order to save money or, more reasonably, because they simply can’t afford to.
Finances also influence relationships. Nearly four in ten report that their or their partner’s unhealthy spending habits have negatively affected their relationship.
A majority of those in relationships (63%) agreed that learning about personal finance as a couple would increase their chances of improving money habits successfully in the future.
“The first step in a happier financial future is education,” explains Dr. Rasure. “The more you know about money and personal finances, the more equipped you’ll be to make better decisions and create a plan to meet your goals. That’s why Financial Practice Week is important. We want to encourage people to learn the money habits and practices they’ve been putting off so they can make progress toward a more stable, optimistic future.”
