Americans are losing around $1,000 a year due to poor financial literacy

Your lack of dollars-and-cents savvy may be costing more than you think.

A survey of 1,200 people, by the National Financial Educators Council, found that the average American adult believes they’re losing $948 a year because of their lack of knowledge about personal finances (so-called “financial literacy”). With the average person losing hundreds annually, the need for better financial education is acute, said Vince Shorb, the council’s CEO.

“Americans today need financial education more than ever before,” Shorb said in a press release. “Financial illiteracy has become an epidemic in this country. We need to start teaching comprehensive financial education to children early in life, so that all Americans have the knowledge they need to make the financial decisions they’ll face in the changing economic world. Our future depends on it.”

The National Financial Educators Council estimated that the collective loss due to poor financial literacy is more than $245 billion.

The council’s survey offered respondents six ranges to choose from when asked how much they believe they were losing each year due to their lack of financial education.

Some 51.4 percent of respondents said they lose anywhere from $0 to $499 each year. Around 10 percent of respondents said they lose $2,500 to $9,999 a year, and roughly 5 percent of respondents said they believe they miss out on $10,000 or more annually.

On a positive note, the survey found that the share of those who think they lose $10,000 a year decreased from 5 percent in the 2024 survey to 4.3 percent this year. The portion of participants who believe they lose $499 or less each year rose from 49.8 percent to 51.4 percent.

Additionally, the survey, which the council has conducted yearly since 2019, reveals that consumers’ financial literacy may be improving. The average amount of money lost to subpar financial education has declined every year since 2022.

This year’s average loss was the lowest in the survey’s history and is nearly half of what it was in 2022 and more than $300 lower than the survey’s first-year results.