Why 90% of Americans Feel Financially Lost—And a Simple Fix That Could Help

Rising food prices and high interest rates are the tell-tale signs of soaring inflation, and Americans are certainly feeling the pressure. 

As Americans navigate the effects of inflation on their wallets, the mismatch between spending and revenue has only exacerbated debt management. Neither national nor household debt is on the mend, with household debt adding another $93 billion in Q4 2024.

April is Financial Literacy Month, and reflecting on our economy, it is clear the need for financial education among everyday Americans has never been more pronounced.

BadCredit.org commissioned a nationwide survey of 1,500 U.S. adults aged 18 and older to get a firmer grasp of the status of financial literacy across the U.S. The survey explored public perceptions of financial literacy, underscoring gaps, barriers, and the role that language plays in shaping the public’s engagement with financial topics.  

Despite the increasing importance of financial literacy in today’s economy, most Americans still feel they lack the foundational knowledge needed to manage their finances effectively. As a matter of fact, 90% of Americans reported gaps in their financial education. 

When asked to rate their financial knowledge and wellness, 39% of respondents considered themselves intermediate, while only 6% saw themselves as experts. Another 16% viewed themselves as beginners, and 4% described feeling completely lost. 

The study revealed a stark reality: Most Americans don’t exude the financial confidence they feel they need to make informed financial decisions. 

Comparing generations, 36% of Millennials rated themselves as confident in their financial abilities, holding the majority within the different groups. Meanwhile, Gen Z had the majority of intermediate learners, with 41% compared to other generational groups. 

Accessibility has always been a major theme in the conversation surrounding financial literacy in the U.S., and for good reason. Though the internet and more resources exist, Americans still view financial literacy as an inaccessible or intimidating subject. 

In fact, 33% of respondents associate financial literacy with what they don’t know, and 19% believe it’s for experts, revealing an emotional barrier that many don’t fully acknowledge. 

Based on our findings, it seems some of the blame can be attributed to language. How financial education is framed and communicated has a significant impact on consumer engagement. As it happens, the choice of terminology can unintentionally intimidate and alienate people, especially those who feel they lack knowledge or experience. 

Our survey found that the term “financial literacy” can be viewed as intimidating or overwhelming for many consumers. When looking at alternatives, respondents rated “financial knowledge” (36%) as the most appealing, followed by “financial empowerment” (22%) and “financial confidence” (17%).

In another question, 60% of respondents said they would engage more with programs using “financial confidence” instead of financial literacy, showing a preference for simpler, more actionable terms that resonate with their stage of understanding. 

Despite being widely used and recognized, the term financial literacy alone reveals itself to be a barrier impacting consumer confidence and engagement. Given the power of language, reevaluating the terminology we use and making strategic changes could be one of the first steps institutions can take to make financial education more accessible to everyone.  

“I’ve always thought that calling people financially illiterate is insulting,” says Erica Sandberg, personal finance expert for BadCredit.org. “Once people learn about money and credit, they become knowledgeable – not literate. It’s not only a more respectful term, it’s powerful.”  

The term financial literacy isn’t the only barrier consumers have encountered. They also highlighted the convoluted landscape surrounding financial education as a roadblock. 

Over half of Americans (52%) find the sheer volume of financial advice overwhelming. Respondents pointed out that the overload of information and choices has made it a challenge to choose where to begin with their financial education journey. 

Our study also identified a notable gap among male and female respondents when addressing this matter. When asked about their barriers, 58% of women reported feeling overwhelmed as a primary hurdle to financial literacy, while 45% of men reported being overwhelmed. 

Besides financial education being viewed as daunting, other common barriers Americans face include:

• Misinformation/conflicting advice (38%)
• Financial struggles and stress (32%)
• Lack of time (31%)
• No formal financial education in school (25%)
• Lack of interest or concern (22%)

Many consumers perceive financial education as unattainable due to the everyday stresses of life and its complexity. On the flip side, they also reveal target areas of improvement that the financial industry can address to bridge the knowledge gap among Americans. 

According to our findings, it seems financial education as an offering still has some way to go before becoming an approachable topic for all people. This can also be supported by the fact that formal sources for financial education aren’t the first stop for consumers. Instead, consumers go closer to home for advice. 

Our study found that respondents lean on informal, peer-to-peer networks and internet sources more than anything else for advice. Nearly 49% of respondents turn to family and friends for financial guidance, while 41% rely on online articles and blogs. Financial professionals are only consulted by 37%.

These findings also shine a spotlight on an even more important opportunity: early financial education. Getting students comfortable with financial education at an early stage can create longstanding, positive implications, potentially leading to consumers creating sound, generational habits for financial management. 

In fact, 40% of respondents believe financial education should be taught in schools as a core subject. This way, people can gain credible tools and resources to make informed decisions from the start and can share them with others in their networks. 

Sandberg adds, “Integrating personal finance education into the curriculum, starting at the elementary grades and moving up into high school, just makes sense. It can be done in a variety of subjects, from math to social studies and even history.”

Furthermore, 28% of respondents also expressed the need for more practical, step-by-step guidance when learning personal financial knowledge. Taking hands-on, practical steps to understand everyday financial priorities can help consumers improve their financial outcomes. 

When asked which topics are challenging to understand, respondents revealed gaps in understanding these key financial areas:

• Investing (61%)
• Taxes (50%)
• Retirement planning (39.6%)
• Credit scores and reports (35%)
• Homeownership and mortgages (28%)

Approximately 26% of respondents also reported debt management as being difficult to understand. This is crucial as credit card debt remains a pervasive issue for many Americans. In our study, 44% of respondents reported having credit card debt, underscoring the ongoing need for credible and practical resources in managing debt and financial wellness. 

Bridging the gap is possible. However, financial educators, institutions, and policymakers must rethink how they frame financial education to do so. They can start the process by prioritizing practical skills, encouraging accessibility by using empowering language, and making financial education commonplace in all schools. Digital platforms are also a clear opportunity that institutions can leverage to provide accessible, credible financial advice that meets people where they are. At BadCredit.org, we recognize the power of language in shaping financial confidence and remain committed to using thoughtful, stigma-free messaging that supports financial confidence for all.

This study was conducted through a nationwide survey of 1,500 U.S. adults aged 18 and older. The respondents were randomly selected to ensure a diverse and representative sample of the U.S. population. The survey was designed to explore the current state of financial knowledge, barriers to learning about personal finance, and the impact of language on engagement with financial education. Data was collected over seven days, and responses were analyzed to identify key trends and insights.