Tue, 09 April 2024 | consumers financial education
The latest results from Primerica, Inc.'s Financial Security Monitor™ (FSM™) paint a stark picture of the financial education landscape in America, particularly for the middle class. An overwhelming two-thirds (66%) of middle-income Americans report feeling unprepared by their education to tackle their financial futures, a sentiment that spans across various age groups but is particularly pronounced among the younger population.
The survey highlights a growing concern over the adequacy of financial education, especially in light of recent economic fluctuations. “The slight decrease in purchasing power for middle-income families from January to February—though seemingly minor—is a significant indicator of the persistent challenges of inflation,” noted experts from Primerica. This sentiment echoes across age groups but reveals a striking generational divide; a majority of individuals under 65 believe their financial education was lacking, with dissatisfaction highest among the 18-34 age group at 73%.
Surprisingly, older Americans have a different perspective, with 61% of men over 65 feeling adequately prepared by their education, in stark contrast to their younger counterparts and to the 57% of women in the same age group who disagree.
Key areas where education was found wanting include tax preparation (71%), managing student loans (67%), understanding credit and loans (64%), and household budgeting (59%). Glenn J. Williams, CEO of Primerica, expressed concern over these findings, emphasizing the importance of addressing these educational gaps to ensure individuals are equipped to navigate their financial journeys confidently.
Primerica’s concurrent release of the Household Budget Index™ (HBI™) sheds further light on the financial pressures facing middle-income households. Despite a slight improvement in purchasing power compared to the previous year, rising costs for essentials like gasoline continue to impact budgets, underscoring the volatile nature of the current economic climate.
Amy Crews Cutts, Ph.D., an economic consultant for Primerica, highlighted the nuanced impact of gas price increases on middle-income Americans, noting that while some relief has been felt from lower gasoline prices and income gains outpacing inflation, the journey towards financial security remains fraught with challenges.
The FSM™ survey also delves into concerns over credit card debt, the merging of finances post-marriage, and the alarming trend of decreased savings for retirement among middle-income Americans. With 88% of respondents feeling the pinch of rising food prices, the need for a more comprehensive financial education has never been more apparent.
Primerica’s findings offer a crucial insight into the financial uncertainties facing middle-income Americans today, underscoring the need for improved financial literacy and education to navigate the complexities of modern economic life.