Bank of America, in cooperation with Harris Interactive, recently conducted a survey entitled “Bridging the Knowledge Gap.â€ The survey results showed some Americans are still not confident when it comes to certain aspects of money management. For example, some admit they don’t feel knowledgeable about the definitions of key financial terms and concepts.
Black Enterprise spoke with Barry Simmons, Bank of America Western Vice President about the survey.
BLACK ENTERPRISE: What prompted Bank of America to conduct this survey?
BARRY SIMMONS: We conducted the “Bridging the Gapâ€ survey in an effort to gauge financial literacy among U.S. adults. The survey questions gave us perspective on the attitudes and aptitudes towards learning, understanding, and practicing personal finance.
B.E.: What surprised you most about the survey results?
SIMMONS: When I reviewed the results, I had to stop for a second to actually understandÂ that even with the hundreds of websites, tools, apps, and other materials available, consumers feel it’s more difficult than ever to get simple answers and advice on their personal finance questions. For instance:
- Four in five U.S. adults (78%) feel it is difficult to learn about personal finance, primarily because they are overwhelmed by the number of financial education resources available (38%).
- 32% of U.S. adults recognize their lack of financial knowledge has led them to make poor financial decisions.
- 43% feel they have missed out on good financial opportunities.
B.E.: What do you think caused these adults to realize their lack of financial knowledgeÂ resulted in poor financial decisions?
SIMMONS: For so many of us, as adults, the experience of a poor financial decision doesn’t sink in until we make it; we feel the effects when we look at our statements. Whether it’s maxing out a credit card and not being able to pay it off or getting hit with a high interest rate on an auto loan, we tend not to recognize our lack of financial knowledge until we come to terms with our own financial predicaments.
B.E.: What is the solution to financial illiteracy?
SIMMONS: We believe that the solution to financial illiteracy is a simplified approach to learning so that consumers can come away with actionable insights and “next stepsâ€ rather than complicated theoreticals. This spring, Bank of America partnered with Sal Khan and the Khan Academy to launch BetterMoneyHabits.com, a learning experience that’s simple, conversational and self-paced. The Khan Academy has mastered the ability to take complex topics and make them simple and approachable. BetterMoneyHabits.com takes that same approach to financial education, providing consumers with an easier way to establish and maintain healthier financial lives and better money habits.
B.E: How can consumers continue to build their financial literacy?
SIMMONS: Seek help and feel empowered to create your own path toward financial literacy! The best way to improve financial literacy is to proactively take steps toward becoming better educated. With the appropriate tools and a certain amount of awareness, it’s possible to gradually change habits thatÂ contribute to poor financial management and begin to develop habits that lead to a better financial future.