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From saving money to paying down debt, here’s why financial literacy is so important

April 25, 2022

To achieve financial success, knowledge is key.

Yet many Americans lack financial literacy. That can impact everything from the amount of money saved to debt owed.

The situation is dire for more than a few. More than half of Americans can’t cover a $1,000 emergency expense with savings, a January survey from Bankrate found. Meanwhile, about 20% of employees run out of money before their next paycheck, according to Salary Finance. That’s up from 15% last year.

Meanwhile, U.S. adults correctly answered only 50% of the questions on the TIAA Institute-GFLEC Personal Finance Index in 2021, a noted measure of financial literacy. That’s 2 percentage points lower than the previous year.

“Financial literacy can help Americans feel confident about the decisions they make on a daily basis,” said NFL linebacker Brandon Copeland, who teaches a personal finance class at his alma mater, University of Pennsylvania.

“To expect success in anything I do, I must first understand the rules and guidelines of that game,” he added. “The same applies to understanding money and how it operates.”