Americans got a "D" in financial knowledge in a new Financial Literacy Survey sponsored by Bankrate.com Financial Literacy survey. In the survey, Americans averaged a 67 out of 100 possible points, with more than a third failing the test.
The Bankrate.com survey of 1,000 Americans listed a dozen steps that are basic to financial well being, including paying bills on time, reading account statements regularly, making more than the minimum payments on credit cards, contributing to a retirement account, preparing a will, comparison shopping for a mortgage, keeping an emergency fund of at least three months' living expenses, following a monthly budget, shopping around for the best insurance quotes and coverage, adjusting one's W4 form annually, checking credit report annually for accuracy, and looking for and switching to credit cards with lower interest rates.
Survey participants were asked to assess the importance of each of the 12 subjects and then whether they actually did them.
Bankrate.com said the majority of survey participants indicated that they recognize the importance of paying bills on time and making more than the minimum payment on credit cards, less than half felt that switching to lower- rate credit cards were "very important" to good money management.
The survey also uncovered a significant gap between people's knowledge of what they should do to be financially literate and what they actually do. For example, 93% of survey participants acknowledged the importance of paying bills on time to avoid late fees, but only 80% said they do it all the time. Moreover, 66% said they felt tucking money away in an emergency fund was very important and 26% felt it was somewhat important, but only 40% actually commit to such.
The Bankrate.com survey found that gender and formal education were not a factor in how well or how poorly one scored on the financial literacy test. However, age, as well as income, was a factor. The average age of people who scored an "A" on the test was 54 and the average age of those that flunked was 41. Those with an average income of $43,000 scored significantly lower than those with an average income of $63,500. Of those surveyed, 9% scored an "A," 16% scored a "B," and more than one-third, 35%, scored an "F."