According to a report that was released after new research was carried out in the United States, a majority of American nationals have a lack of knowledge when it comes to their finance. The study concluded that over 50% of American citizens could not explain what 401(K) meant. The scientific research had 1,000 participants who were above the age of 30 years. The study whose main aim was to determine the financial grasp of terminologies that related to how the ordinary American citizens handle their money found that many have trouble defining even the most basic of terms.
Many of the respondents failed to understand what the term interest means to their banking, how inflation works and the concept of bankruptcy. The study was commissioned by the GuideVine Company which is a firm that matches Americans to advisors on matters relating to finance. GuideVine revealed that 55% of all the respondents who took part in the poll had a lost feeling when it comes to a stable and long-term financial plan. Only a third of respondents in the survey admitted that their budget and current earning allowed them to craft a financial plan that was beneficial to their long-term stability.
Only a mere 13% of those who participated in the study admitted to having a financial plan that spanned for the next five years. The lack of financial accountability is the main reason why most Americans lacked confidence for their future when it comes to financial stability. Another od the statistics that is astonishing is that only 27% of the over 30-year-olds in the United States said that they had made the proper planning regarding their finances to one day own a home. Another 315 said that they had imagined or made the necessary financial plan to see a day in their lives when they would never operate without debt.
Another 36% of the respondents said that they were not specific on whether they would have a comfortable retirement. GuideVine’s CEO, Raghav Sharma said that said that the results of the poll carried by her firm were astonishing and alarming at the same time. Sharma’s company has assisted thousands of Americans to get the best financial resources. The Chief Executive admitted that one of the most significant barriers to financial independence in the United States was lack of confidence regarding finances and below average financial literacy in the masses even to have the roughest of ideas about where to start.