OnePoll conducted a poll for TD Bank that found that most Americans aren’t confident with handling their finances until they are 30. The survey of 2000 Americans found that 25% of the respondents felt they needed to become financially literate as they entered their mid and late twenties.
Americans weren’t as financially literary as they thought
About 82% of the respondents felt they were financially literate. However, when researchers asked them questions from the Financial Industry Regulatory Authority, most of them could only answer 50% of the questions.
The researchers found that the respondents lacked sufficient knowledge of finance. For example, 33% felt confident in their investment skills, while 45% knew completely about inflation. When it came to stocks and bonds, only 29% felt confident in their knowledge.
In addition, the pandemic had changed the financial habits of many of the participants. About 67% had begun to save money for their long-term objectives. Things they were saving for include retirement (48%), a house (49%), and investing (56%).
Millennials were more curious about finances
Millennials seemed most curious about investing. Over 50% were already looking into investing, while others had invested in things like silver, gold, or cryptocurrency. They also seemed to have heard of several types of loans, including cash advances (27%), small business loans (30%), auto loans (40%), and mortgages (43%).
About 62% felt they knew a lot about home equity. However, almost 50% could not differentiate between home equity lines of credit and home equity loans. Another 33% didn’t know these loans could be made expensive if federal fund rates rose.
About 8 in 10 respondents thought they could approximate or give an exact figure for the amount of equity in their homes. Since the pandemic housing boom, they had felt the need to know the value of their homes even though some weren’t aware of other aspects of their finances.
According to the Head of Community lending at development at TD Bank, Michael-Innis Thompson, many Americans don’t know the tools they need to start planning for their future. For instance, many don’t know they could use home equity to renovate their homes via a line of credit.
