Almost half (43%) of Americans don't know what a 401(k) is

A recent study sheds light on a significant gap in financial knowledge among Americans, with nearly 43 percent of participants admitting they’re unsure about what a 401(k) retirement plan entails.

The survey, conducted by OnePoll on behalf of Beyond Finance, polled 2,000 US residents from various age groups to assess the country’s financial literacy and readiness to adopt sound financial practices.

Thirty-nine percent of respondents believe they are more financially literate than the average person. However, confidence in personal finance knowledge is relatively low, with only 30 percent feeling they could excel in a trivia game focused on financial topics, and 35 percent admitting they are unfamiliar with the term “interest” as it relates to personal finance.

The study also revealed a reluctance to engage with personal finances, with approximately 40 percent of respondents saying they delay taking steps toward healthier financial habits.

Among different age groups, Gen Z members show the most willingness to improve their financial behaviors, while millennials appear to be the least likely to make positive changes. A quarter of all respondents said they postpone personal finance tasks due to stress, and 16 percent expressed feeling financially hopeless, believing their situation cannot improve.

"Some individuals tend to neglect evaluating their financial situation, while others may become overly anxious about it," noted Erika Rasure, chief financial wellness advisor at Beyond Finance.

Despite these challenges, 80 percent of people in the poll said they attempt to set a monthly budget. Millennials and baby boomers were the most diligent, with 81 percent from each group reporting that they create spending plans.

However, adhering to budgets consistently proves challenging. On average, respondents said they stick to their budget only 66 percent of the time, with baby boomers demonstrating the most discipline at 76 percent, and Gen Z being the least likely to follow through at 58 percent.

The survey uncovered various money-saving strategies, including purchasing sale items (53 percent), using coupons and discount codes (47 percent), and reducing clothing expenses (45 percent). Additionally, 39 percent said they cut back on dining out, while another 36 percent said they either scale back or eliminate travel from their vacation plans.

The poll also explored the impact of personal finance on relationships, with 39 percent of people in committed relationships saying that poor spending habits – either theirs or their partner's – have a negative impact. However, 63 percent of coupled respondents agree that improving financial literacy together would increase their chances of developing better money habits.

"The more you understand about money and personal finances, the better equipped you'll be to make informed decisions and create a plan to achieve your goals," Rasure concluded