The more American middle class families understand personal finances, the less financially strapped they feel, a new survey shows.
First Command Financial Services Inc., an investment adviser firm, administered a financial literacy test in March to people with household incomes of $50,000 or more to gauge the financial knowledge of the middle class.
Of those who answered all of the questions correct, 63% said they didnt feel financially strapped versus 48% who said the same but had answered one or more questions incorrectly.
Some 42% of people who got a perfect score on the test also said they were comfortable with their debt levels. Meanwhile, of those who answered questions wrong, 32% said they were comfortable with their debt.
Overall, the survey respondents scored pretty well on the tests: They answered 7.5 out of nine questions correctly, on average. And three out of 10 respondents earned a perfect score.
Despite higher levels of confidence among the most financially literate, even they didnt feel comfortable with their savings or their ability to retire. Less than a quarter of those who answered all the questions correctly said they felt comfortable with their savings. A slightly higher 36% said they were very confident in their ability to retire comfortably.
Among those who answered at least one question incorrectly, just 15% felt good about their savings and 29% said they were sure they would be able to retire comfortably.
The test surveyed 659 people and has a margin of error of plus or minus 3.8 percentage points.