Financial Illiteracy Costs Americans Nearly $1,000 Each, Survey Finds

DALLAS, TX – December 29, 2025 – A lack of financial knowledge cost the average American adult an estimated $948 in 2025, according to a new annual survey that puts a stark price tag on a nationwide skills gap. The findings, released by the National Financial Educators Council (NFEC), suggest that poor personal finance skills collectively drained over $246 billion from U.S. households last year.

The annual study, which polled 1,200 adults across the country in late December, asked a single, direct question: "During the past year (2025), about how much money do you think you lost because you lacked knowledge about personal finances?" The results paint a picture of significant, tangible losses. Nearly half of all respondents (48.6%) estimated their financial knowledge gap cost them more than $500, while a notable 14.6% reported losses exceeding $2,500.

"Americans today need financial education more than ever before," commented Vince Shorb, CEO of the NFEC, in the organization's press release. "Financial illiteracy has become an epidemic in this country. Our future depends on it."

The Billion-Dollar Blind Spot

The nearly one-thousand-dollar average loss per person is not an abstract figure. It represents real money lost to preventable mistakes, such as paying excessive interest on credit cards, incurring bank overdraft fees, missing out on investment returns, or falling victim to predatory loans. When extrapolated across the estimated 260 million adults in the United States, the individual cost balloons into a national economic burden of over $246 billion.

These self-reported losses align with broader, troubling trends in American financial health. The NFEC report points to recent data from the Federal Reserve Bank of New York showing that total U.S. credit card debt soared past $1.13 trillion in late 2024. This mountain of high-interest debt suggests many are struggling to manage their borrowing effectively.

Furthermore, long-term financial security remains elusive for a significant portion of the population. A 2023 Federal Reserve report highlighted that 31% of non-retired adults have no retirement savings whatsoever, a vulnerability that a lack of financial planning skills can directly exacerbate. Experts argue that financial literacy is a critical tool for navigating these challenges, enabling individuals to build wealth, manage debt, and prepare for the future.

A Contradictory Trend?

Interestingly, the NFEC's latest data reveals a downward trend in self-reported losses over the past four years. The average estimated loss was $1,819 in 2022, which fell to $1,506 in 2023, $1,015 in 2024, and now $948 in 2025. On the surface, this could suggest that Americans are becoming more financially savvy.

However, other comprehensive studies on financial literacy present a more complicated picture. An ongoing index from the TIAA Institute and GFLEC has shown that objective financial literacy rates have remained stubbornly stagnant, hovering around 50% for eight consecutive years and even dipping slightly in the last two. A separate 2024 survey by the Financial Industry Regulatory Authority (FINRA) found that only 27% of adults could correctly answer five out of seven fundamental financial knowledge questions, a figure largely unchanged from 2021.

This discrepancy raises a critical question: if objective knowledge isn't improving, why are self-reported losses decreasing? Some analysts suggest it may not reflect a true increase in financial skill but rather a shift in perception or economic behavior. In a challenging economy, individuals may become more conservative, taking fewer financial risks and thus perceiving fewer direct losses. Others may simply be growing accustomed to certain costs, no longer identifying them as losses due to a knowledge gap. The survey's methodology, conducted by insights firm Prodege, relies on self-perception, which can be influenced by a host of economic and psychological factors.

The Push for a Smarter Financial Future

Regardless of the trend's interpretation, advocates insist the nearly $1,000 average loss is still far too high and underscores a critical need for systemic change. In response, a powerful movement to embed financial education into the nation's school systems is gaining momentum.

As of 2023, 22 states had passed laws requiring a dedicated financial literacy course for high school graduation, a significant increase over the past decade. States like Florida, Michigan, and Ohio have recently implemented or are phasing in new mandates, aiming to equip the next generation with essential money management skills before they enter adulthood. These courses cover topics from budgeting and saving to understanding credit, investing, and taxes.

Non-governmental organizations are playing a pivotal role in this educational push. Junior Achievement's "JA Finance Park" offers a powerful, hands-on simulation where students manage a fictional household budget in a realistic, life-like setting. The Council for Economic Education (CEE) works to develop state standards and provides K-12 teachers with the training and resources needed to effectively teach personal finance and economics.

Bridging the Knowledge Gap

Despite this progress, significant challenges remain. Experts caution that simply mandating a course is not a silver bullet. The quality of instruction, the depth of the curriculum, and equitable access for all students are paramount to success. The NFEC itself notes that many states with mandates still fail to meet minimum standards for a comprehensive education.

Research also consistently shows that financial illiteracy disproportionately affects certain demographics, including women and those with lower levels of education, creating cycles of economic vulnerability. According to one economist specializing in financial decision-making, the goal should be to instill an "economic way of thinking"—an ability to analyze trade-offs and make evidence-based choices—not just to memorize financial facts.

As Americans navigate an increasingly complex economic world, the $246 billion question remains: how to effectively arm every individual with the knowledge needed to secure their financial well-being. While the cost of ignorance appears to be trending downward, the data confirms it remains a profoundly expensive problem that education is poised to solve.