Covid-19 has put many Americans in a financial bind, and most of them are hamstrung in trying to overcome their hardships by a lack of knowledge.
The need for greater financial awareness among vulnerable Americans is never more apparent than during major crises as many find themselves mired in financial difficulties and unable to cover emergency expenses, according to a new Charles Schwab Financial Literacy survey of 2,046 Americans.
Schwab found that half of all respondents would experience financial hardship if they had to cover an emergency expense of $1,000 or less in the next 30 days.
Respondents bemoan not having better money management skills. When asked what they would teach their younger selves about personal finance based on what they know today, 59% of respondents said the value of saving money, 52% said basic money management, and 51% said how to set financial goals and work toward them.
On a scale of one to 100, Americans rated money management (62.9) as the most important skill for kids to learn, edging out the dangers of drugs and alcohol (60.5), healthy eating and exercise habits (58.3) and safe driving practices (57).
Most respondents (65%) believe that schools should be the primary vehicle for providing financial education, 12% said the government should take the lead and 10% said employers should be primarily involved in teaching financial literacy. The research noted that only 21 states require high school students to take a personal finance course.
The survey also showed that nearly two-thirds (63%) of respondents chose financial education as the most important supplementary graduation requirement for math, English and science. Forty-three percent chose health and wellness education.
Carrie Schwab-Pomerantz, president of Charles Schwab Foundation, said financial literacy is a survival skill that everyone needs. “Financial illiteracy is insidious. The antidote is financial education, which gives people the skills they need to make smart money decision and can help improve their lives,” she said. “The pandemic has underscored just how critical basic personal finance skills are in preparing for the unexpected,” she added.
The survey also reveals that most Americans (89%) believe that the lack of financial know-how contributes to some of the key issues the country faces. Fifty-eight percent blame the lack of financial illiteracy for poverty, 53% for lack of job opportunity, 53% for unemployment and 52% for wealth and inequality.
The online survey was conducted by the Harris Poll in June.