‘Financial illiteracy is an epidemic’: Americans lost an average of over $1,800...
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Americans lost an average of over $1,800 to financial errors in 2022 — here are 3 big money mistakes you could be making right now
Americans are learning the hard way that they can’t always bank on their own financial knowledge.
On average, U.S. adults lost $1,819 to personal financial errors in 2022, according to the latest National Financial Educators Council (NFEC) report.
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That’s a total loss of over $436 billion when scaled up for all 240 million American adults.
“Financial illiteracy is an epidemic in the U.S., and it's coming at a time when the economic climate is changing rapidly,” says Vince Shorb, CEO of the NFEC. “That means financial education has never been more important than it is today.”
Need a quick crash course? Here are some financial lessons that can have a direct impact on your bottom line.
Money mistakes come at a cost
Over 38% of individuals said their lack of financial knowledge cost them more than $500 in 2022, while 23% reported losing over $2,500, and 15% said it set them back by $10,000 or more, according to the NFEC’s latest financial illiteracy survey.
The cost of financial illiteracy has ticked up gradually since 2017 and the pandemic drove those costs to new heights. In 2020, those costs spiked by 27.7%, largely due to pandemic panic. 2022 saw an even larger increase of 31.6% due to record-high inflation and other economic challenges.
“People weren't prepared for the rapid increase in the cost of food, gas, and other necessities in 2022,” says Shorb. “Many people that were just getting their finances back in order after COVID times are now back to struggling to make ends meet.”
The NFEC identified several common money mistakes that cost Americans billions of dollars every year — here are three of the most common — and costly — errors:
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