A new survey authorized by the Fifth Third Bank and performed by Research Now, reveals that Americans have limited financial knowledge and stability, based on The Corliss Group online magazine report.
The survey was conducted from March 5 to 17 and had 1,068 respondents.
Ninety percent of Americans didn't know that individuals under the age of 50 can make contributions up to $18,000 a year to a 401(k) plan.
57.9% of those surveyed said they were financially knowledgeable and 38.5% understood the annual percentage rate (APR) on their primary credit card.
In addition, 60% did not have sufficient savings to survive for at least 6 months.
A certified financial planner Eric Meermann, who is based in Scarsdale, N.Y., said that financial literacy is truly a big concern and based on the survey, it is not focused on nearly enough.
55.8% of those surveyed knew what a credit score measures. Meermann says that you should have a focus on getting a good credit score if you wish to be able to accomplish many things that a lot of Americans consider important. Simply because the better credit you have, the better terms and fees you can get on your debt.
Strikingly, only 13.3% of the younger generation knew the maximum amount they could put into a 401(k) plan for the year. This indicates that the gaps in finances and knowledge among Millennials were also surprising.
Stacie Haas, a spokeswoman for Fifth Third Bank says that when she was younger, she would see her parents balancing their checkbook and actually going to the bank to make a payment.
She thinks that you don't see that anymore, and she also thinks that kids these days don't grow up witnessing the daily management of money. It just happens around them or inside the cellphone or laptop.
"They do not understand there's a real management level to this. You don't just make it and spend it."
The Fifth Third Bank's senior vice president of community and economic development, Camino Smith says that younger people are not going to understand financial issues in school if they don't achieve it in home, because schools usually doesn't have a lot of financial literacy courses or themes provided within the curriculum.
Fifth Third Bank provides different type of financial literacy program such as the "young bankers club" that has educated thousands of fifth-graders about the benefits of maintaining a budget and other guidelines regarding money.
Another program instructs adults how to pay for a home, as well as retirement and higher education.
Smith added that there many Baby Boomers retiring who are not prepared for retirement, and somehow they're going to have to be supported or reduce their standard of living. And that's not good for the economy or the country as a whole.
He also thinks that if individuals make financial literacy more of a priority in the education system, it could truly help the next generation, and generations to come.