Recently, we conducted a survey on personal finance in collaboration with OnePoll, a leading marketing research company. With a sample of 2,000 Americans, we set out to establish average financial literacy levels and whether or not people felt intimidated by their personal finances.
It turns out that the majority of people (two in five Americans) are taking a “fake it until you make it” approach when it comes to their finances.
In today’s blog post, we’ll address the most pressing questions that came to light during the survey and give you some tips to help you overcome any fears you may have when it comes to your finances.
How to make a monthly budget
Almost 86% of people asked weren’t sure of how to make a monthly budget. Monthly budgeting is considered one of the main components of financial literacy. Finding a reputable source with clear and easy-to-follow steps can be difficult. To save you time scouring the web, we’ve prepared a quick guide to help you gain your financial independence.
How to create a savings account
Knowing which type of savings account is best for you and your needs can be tricky. There are many options to choose from; short-term, long-term, investment-based savings, etc. Over 90% of Americans struggle to open a savings account, too. The first step would be to speak with your bank. Once you have an account set up, you’ll need to devise a plan on how to start filling it with your savings. To start, you could move what’s left in your current account after you’ve paid bills and other expenses into your savings account. For more ideas, check out our thoughts on the best ways to save money!
Jargon being a barrier to entry
You know that feeling when you are reading something and there’s some form of jargon or lingo that you don’t understand? Convoluted language can make things off-putting, particularly where money is concerned. Well, you’re not alone. Almost seven out of ten (67.2%) Americans feel the same way. Knowing the terminology is half the battle! Here are 15 financial terms you should know.
Ask for help or seek out the answers for yourself?
It doesn’t matter which you prefer, so long as you get the information you need. Many people prefer learning to do things for themselves, as is the case for three in four survey respondents (74%). With that in mind, here are some personal finance books we think you should read.
Saving for a rainy day
Making ends meet can be a daily challenge, and 65% of respondents agree that finding ways to save is a tough job. However, rainy days are bound to come, so it’s vital to find ways to set up an emergency fund. We know this sounds easier said than done, but don’t worry! There are ways to save money on a tight budget.
A few other points of interest
Some of the questions participants were asked were centered more on their feelings about different personal financial topics. Let’s have a look at a selection of them and give you some tips on how you can overcome those troublesome feelings.
- Feeling like friends and family know more about finance than I do. Just under half (45%) of Americans feel this way. While some in your inner circle may know more than you, there will be others who know less. That’s why talking about finances with the people you love and trust is so important. Sharing what you know and encouraging open communication around the topic can help you and others become more financially savvy!
- I want to learn about finance, so I can educate my children. Why is financial literacy important? Well, for 48% of Americans, gaining a better understanding of their finances means they can pass that knowledge on to their children. At Ria, we couldn’t agree more and have a post to share about what your kids can learn from your money transfers.
- I don’t understand how to set up an emergency fund. Sometimes called a contingency fund, an emergency fund is money you set aside for the unexpected. And by this we don’t mean money from your current account. Imagine your washing machine breaks, or you need to take some days off work to help a loved one. The emergency fund is the money you can use for when life throws those curveballs at you. 83% of Americans said they weren’t sure how to set up an emergency fund, and while there is no one correct answer, a good place to start would be with a second bank account. Any account that can provide you with a debit card and no withdrawal limits will do the trick! Each month, transfer a small amount to this new account to start working on your emergency fund.
And there you have it. We hope you’ve found this post useful and that you feel better informed about managing your finances. Stay tuned to the Ria blog for more financial tips coming soon!