Nearly half of Americans don’t understand what a 401(k) is, according to a recent survey.
A nationwide survey of 2,000 Americans, evenly split across different generations, found that 43% of participants are unfamiliar with the concept of a 401(k). The survey explored Americans’ financial knowledge, commitment to adopting healthy money habits, and feelings about their bank accounts and financial futures.
The findings showed a significant lack of confidence among participants in their financial knowledge, with only 30% believing they could succeed in a personal finance trivia game.
Additionally, more than a third (35%) don’t understand what “interest” means in a financial context.
The study, commissioned by Beyond Finance for Financial Practice Week and conducted by OnePoll, highlighted that despite these concerning gaps in knowledge, only 39% of respondents consider themselves more financially knowledgeable than others.
Four in ten Americans (39%) admit they delay adopting healthy financial habits. Gen Z is the most likely to put off these habits (49%), while Baby Boomers are the least likely to do so (22%).
The main reasons given by respondents for delaying personal finance tasks include stress (25%), a belief that their financial situation is already so poor that it can’t get any worse (16%), and forgetfulness (13%).
“Unfortunately, avoiding your finances and making healthy changes is very common,” said Dr. Erika Rasure, chief financial wellness advisor at Beyond Finance. This avoidance can be overwhelming. Some people tend to ignore their financial situation, while others become anxious about it. There’s a middle ground to improving financial health—learn healthy money habits, pay attention, and make small, achievable adjustments to your spending and habits.”
The study found that the average American checks their banking app twice daily. Exactly half of the respondents say they feel nervous when opening their banking app, with Gen Z feeling the most uneasy (65%).
In contrast, Baby Boomers are the most relaxed (26%), and over a quarter of all respondents avoid checking their banking apps daily (26%).
When it comes to budgeting, 8 out of 10 respondents try to stick to a monthly budget, with Millennials and Baby Boomers tying for the best financial plans (81%).
Among those who create a monthly budget, respondents stick to it 66% of the time on average, with Baby Boomers showing the highest accountability (76%) and Gen Z straying the most from their budgets (58%).
