New survey from eToro finds Americans are eager to start financial education at an earlier age, even as they express discomfort discussing financial matters with friends and family
- 66% of Americans start learning about financial literacy before their 30s
- 53% feel confident in their knowledge of investing and trading
- 69% of respondents think people should begin learning about financial literacy as teenagers (or younger)
- Younger Americans would rather talk about their love lives than their finances
April 18, 2023– Three in four Americans think that financial literacy should be taught in formal settings such as schools, according to new survey data released today by trading and investing platform, eToro – and 69% of Americans think financial education should begin during teenage years, if not before.
Taken from a survey of more than 2,000 respondents across the United States, 50% of Americans say they had the opportunity or were mandated to participate in financial literacy education. While the survey finds two-thirds (66%) of Americans are learning about financial literacy before their 30s, the survey also suggests there’s an eagerness to learn at an even younger age.
Commenting on the latest report, Lule Demmissie, U.S. CEO, eToro, said: “You’re never too old or too young to expand your knowledge regarding financial matters. If you’re trying to engage younger family members, consider non-traditional methods of learning — kids might be bored out of their minds discussing IRAs and 401Ks, but family board games that strengthen their “game theory’ skills; experiencing the joys of asset ownership; and tracking the movement in that asset’s value over time can foster engagement and intellectual curiosity. Learning-by-doing is key, which is why eToro invested in an award winning virtual investing platform in addition to its other investor education services for regular investors.
Americans Would Rather Discuss Politics, Religion, Debt & Mental Health Than Investing
While Americans are opening up about important topics such as mental and physical health, it seems many are still uncomfortable discussing certain financial topics like debt, salary and investments.
When it comes to their next family get together, many Americans would rather talk about potentially tough topics like religious beliefs, politics, their love life and relationships than their investments.The survey also found younger Americans are more likely to want to chat about romance over finance: 41% of Americans between the ages of 25-34 say they’re comfortable talking about their love lives, while just 30% say they feel the same way about discussing investments.
Family get-togethers can be fraught with conversational landmines, but social media can offer an alternative for younger people to discuss their finances and investing via secure social media platforms like etoro.com. 37% of those between the ages of 25-34 say they’re most comfortable using this channel, compared to just 10% of those between the ages of 55 and 65 who said the same.
Commenting on the findings, Lule Demmissie added: “Financial topics don’t have to be taboo – we can all cultivate communities centered on increasing financial literacy, but we have to lean into courageous and shame-free conversations about money, intellectual curiosity and the joy of community-based learning.”
Google and Social Circles Drive Research and Decision-Making – But Gender Gaps Persist
When it comes to confidence in investment decisions, the gender gap sadly persists: data shows that while men and women have an equal hand in household financial management, men are more confident about it: 68% of men say they’re comfortable making decisions around investments, while just 40% of women say the same. But it is critical to note that from a trendline perspective women’s comfort with investing has increased remarkably over the last three to four decades. Not bad progress when we think about the fact that women were not allowed to apply for a bank account, or credit card, as early as the mid-1970s.
Just shy of two in three Americans (63%) are satisfied with the financial literacy resources available to them, yet, when it comes to making decisions about investing, Americans continue to turn to Google! Almost half (47%) of Americans say they use Google when researching and making decisions about crypto investing, almost the same (46%) use the search engine for traditional investing.
Americans also value personal recommendations from friends and family with 34% saying they tap their in-person social circles for information when making decisions about traditional investing. That number is even higher for women – 39% say they mainly tap their family and friends for information, compared to 31% of men who say the same.
Furthermore, half of Americans (51%) surveyed believe that financial literacy education is equally available to people of all backgrounds and identities. While 51% is a start, there continues to be a need for companies and communities alike to expand access to financial literacy resources for people of all backgrounds and identities.
Americans Confident in Investing and Trading, Quickly Getting Up to Speed on Crypto
Despite recent market uncertainty, more than half (53%) of those surveyed say they feel confident in their knowledge of investing and trading. While consumers are more likely to be able to define common credit-related terms like “loan” “interest” and “credit score” (all of which around 60% of respondents feel comfortable defining), gaps in knowledge persist when examining investment terms such as “bonds” (69% cannot define), “options” (78% cannot define) and ESG, which a whopping 94% of respondents cannot define without looking up or researching.
When it comes to crypto investing, Americans are still in the learning stages, however, given it’s a relatively new asset class,they’re learning pretty quickly! More consumers feel comfortable defining crypto than bonds, options and ESG – even though those investment terms have existed for significantly longer time periods. Just 67% of consumers said they were unable to define the term “crypto” – but things get a little tougher for blockchain and web3, with 83% of respondents indicating they would struggle to define “blockchain,” and 94% struggling to define Web3. Almost 7% of respondents said they could not define any of the terms listed – indicating an overall need for increased education in both traditional and newer investing instruments.
ENDS
Notes to editors:
About this report:
The 2023 Financial Literacy report was based on a survey of 2,000 US respondents using a nationally representative sample of 18 – 65 year olds. The majority of the questionnaire was directed to a nationally representative sample of consumers, whilst some questions were asked towards only those who were identified as investors. In this survey, investors were defined as those who own some form of investment option including shares, bonds, funds, crypto, investment ISAs or equivalent, they did not need to be eToro users. The survey was conducted between April 4, 2023 and April 6, 2023.
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