Written by: The Knowledge Academy
American public are most confident (88%) about the meaning of a ‘savings account’ Thereafter, Americans (76%) are assured by the true connotation of a ‘credit union’ Opposingly , the cryptocurrency ‘Bitcoin’ is the financial term that the majority of US citizens (52%) are uncertain about Just 67% of Americans know what a ‘recession’ is, despite the fallout from the 2008 financial crisis causing a severe global economic downturn for several years Shockingly, only 16% of Americans have a high level of financial literacy We can’t all be financial wizards, that is unfortunately and undoubtedly true. But as we navigate through different life stages, the urgency to acknowledge and grasp what numerous financial terms mean becomes ever apparent when making tough financial decisions.Considering words and phrases in areas such as banking, investment, mortgages and savings are more than likely to feature a lot in an individual’s management of their personal finances – the hope would be for them to have a firm education of commonly used financial jargon. Unfortunately, this does not seem to be the case, as shockingly
only 16% of Americans have a high level of financial literacyaccording to research by financial services organisation ‘TIAA: Investing, Advice, Retirement and Banking’.Interested in the financial competency of everyday Americans, training and qualifications provider
TheKnowledgeAcademy.comanalysed findings from
YouGov, who surveyed 1,135 American adults to see how confident they are with the definitions of a range of financial words and phrases.The Knowledge Academy found that
‘savings account’is the financial term that
most Americans are confident about at 88%. Thereafter,
76%claim to be assured by what a
‘credit union’is. In third position,
72%of Americans feel confident enough to know what
‘net worth’ represents.Interestingly, the main two aspects needed to work out someone’s ‘net worth’ –
‘assets’(e.g. homes, cars, jewellery etc) minus
‘liabilities’(e.g. credit card debt, cars loans, mortgages etc) –
70%of US citizens were
equally confidentabout what is entailed within each of their true definitions.
Moreover, despite the fallout from the 2008 financial crisis causing a severe global economic downturn for several years,
just 67% of Americansare surprisingly sure what a
‘recession’really is in terms of an important stage in the
economic lifecycle.On the other end of the scale,
more than half of Americans (52%)are
unconfidentabout what
‘Bitcoin’really is. Perhaps unexpected, given
‘Bitcoins’ prominent position in the cryptocurrency marketand its value noticeably rocketing to sky-high levels at the end of last year (2017). Closely by,
49% are unsureabout the proper connotation of an
‘index fund’. Further on,
44% of American publiclack certainty about what an
‘asset allocation’is – a strategy which aims to diversify an asset portfolio based on an investor’s investment objectives and risk appetite.
Joseph Scott, a spokesperson from the TheKnowledgeAcademy.com commented:“Every industry is riddled with jargon, none more so then in the tricky world of finance. It can therefore feel like a confusing mind field when dealing with financial terminology. Regardless of the difficultly, various financial terms have a considerable presence and impact in the minor as well as major saving and spending decisions of Americans. Consequently, a lack of knowledge on financial terms will mean Americans not having the awareness and competencies to make the best possible decisions when handling a range of situations relating to savings, investments and property management. For many, acquiring better knowledge on financial terminology will be essential for them to achieve a higher standard and quality of living”.Learn more at the
Knowledge Academy.
