Are Americans Making the Grade When It Comes to Financial Literacy? According to Genworth Survey, it Depends on Who You Ask
Phase II of Research Series ‘Psychology of Financial Planning’ Further Explores Americans’ Relationship with Money and Finance
Richmond, VA (September 10, 2013) – /PRNewswire/ – Americans have a bit of a superiority complex when it comes to grading their financial prowess. Genworth’s latest Psychology of Financial Planning research reveals that more than half (52%) of Americans gave themselves an A or B grade on their saving and investing knowledge, while giving the average American a failing grade of D. What nearly everyone (97%) can agree on, however, is the importance of financial literacy and the fact that they don’t have enough (88%). In fact, 58 percent of respondents blamed lack of financial education as a top reason why pre-retirees don’t have enough money saved for retirement.
Genworth’s continuing series of Psychology of Financial Planning consumer research aims to gain further insight into the psyche of Americans and what prompts or restricts them from planning for their financial futures. Genworth’s latest study focuses on Americans’ financial literacy.
“Despite having more financial education resources available than ever before in the form of books, TV shows, websites, blogs, etc. we don’t take advantage of them and, if we do, we don’t apply what we learn. Why? Financial decisions, behaviors, and actions are highly motivated by emotional and psychological factors,” says Dr. Barbara Nusbaum, a New York-based psychologist and money coach. “If we can better understand our personal feelings about money, we will be more able to educate ourselves and, most important, better apply this knowledge to secure our own and our families’ futures.”
Psychological feelings about one’s finances and motivation to become financially educated vary by individual, with particularly significant differences between genders. The data reveals that only 40 percent of women would give themselves a grade of A or B on their knowledge of saving, preparing for the future, and investing options compared to 66 percent of men. Furthermore, women (21%) appear to be more driven by fear than men (14%) when it comes to seeking more financial education.
“For men, making money is often tied to how they feel about themselves, including their positive self- identity, and how their success is measured, which creates a greater motivation to become financially literate. Conversely, women are more socialized to focus on financial and family security, such as budgeting, easy access savings, debt-reduction and lower-risk investing, rather than accumulation strategies often taught in financial education,” explains Dr. Nusbaum.
The Accountability Factor
When asked who should take responsibility for educating the American public on basic financial matters, the vast majority (75%) of respondents place the responsibility for financial literacy on themselves, followed by parents and family (56%), teachers/school (50%), the financial industry (34%), independent third-party organizations (19%) and government (17%).
Ensuring a stable financial future is the number one motivation (67%) for consumers to seek more financial education, far exceeding fear of running out of money (18%) and envy of other’s financial success (2%).“Take your education into your own hands. People get so busy living day-to-day that their long-term financial goals get put on the sidelines,” says Wendy Boglioli, national spokesperson for Genworth. “The great value in working with a financial professional is that they can help keep you on task in meeting your goals and provide important financial knowledge.”
Boglioli provides three tips for staying motivated and on track when it comes to financial literacy:
- Genworth’s Let’s Talk website offers tips for initiating conversations about long term care and retirement planning with loved ones.
- Join Genworth’s national spokesperson and Olympic Gold Medalist, Wendy Boglioli, for discussions on being Financially Sound, Physically Strong at AskWendyB.
- Are you prepared? Take our survey and see.
Genworth can also be found online through its social media platforms, including Facebook and YouTube.
About the Study
Genworth’s Financial Education study was conducted in collaboration with J&K Solutions, LLC and Toluna, Inc. The data from this omnibus study was collected from an online survey over the course of 3 days in June 2013. 1011 adults (ages 25+ with household incomes of $50,000 or higher) across the United States were surveyed providing a highly stable and reliable data source. This allows for estimates of the stated population within +/- 3% with 95% confidence, unless otherwise noted.
Additional information about the survey, video content, tips and advice for consumers, all of which can also be used by financial advisors to leverage with clients, is available via our multimedia news release.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement — including life insurance, long term care insurance, and financial protection coverages — and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.
Genworth operates through three divisions: U.S. Life Insurance, which includes life insurance, long term care insurance and fixed annuities; Global Mortgage Insurance, containing U.S. Mortgage Insurance and International Mortgage Insurance segments; and the Corporate and Other division, which includes the International Protection and Runoff segments. Products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth, headquartered in Richmond, Virginia, traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com. From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the “Investors” section of genworth.com.