In the spirit of Financial Literacy Month, and now that the 2025 tax year is almost in the rearview mirror, it makes sense to take a moment to see what we can learn about ourselves using your tax return as a planning tool for this year and beyond. Now’s NOT the time to put your return in a filing cabinet (virtual or literal), without really looking at the story your tax return might be telling you. Are you where you want to be financially? Does your financial situation fit your goals and dreams?
Recent data from Intuit Credit Karma and TurboTax, published March 18, illustrates how many Americans feel they are making informed financial decisions and what they know about managing their finances.
- 74% of Americans consider themselves to be financially literate
- 83% said their parents’ attitudes toward money and financial tools (e.g., credit cards, saving, and budgeting) influenced how they think about and approach those same topics today
- 52% said they have experienced a setback due to a financial decision they made that was based on incorrect information
Additionally, results from this same survey show the following:
“Nearly three-quarters of Americans (74%) say they consider themselves financially literate, especially when it comes to budgeting with 64% feeling very or extremely confident managing a budget. But confidence drops sharply with more complex financial topics. 35% of Americans feel only slightly or not at all confident about their investing knowledge, 22% feel slightly or not at all confident about taxes, and 26% feel slightly or not at all confident about loans.
Even though many Americans feel financially literate to an extent, one third of respondents (67%) admit they’d be further ahead in life if they were more financially literate. This shows that while many feel confident in their financial knowledge, they still recognize there are gaps that may be holding them back.
Just like when we plan a vacation, to prepare clients for the financial planning process and fill those gaps, we first need to start with an understanding of where you are now and where you want to be. What do you know about your personal financial situation?
Fortunately, we have two specific tools to help answer that question. The first is a Simple Financial Statement – what you own and what you owe. Very quick to complete and helpful in understanding your current financial situation.
The second is a Budgeting Tool to help you understand where your money goes and what you’d like to be spending your hard-earned dollars on monthly.
The Tax Knowledge Gap Is Real
Taxes are a particular sticking point for Americans. More than half of Americans (55%) say they depend on a parent, accountant or friend to help them file their taxes because they lack the foundational knowledge to do it confidently on their own. Among Gen Z, that number jumps to 72%.” [1]
While you don’t need to be experts in all things financial, it is helpful to understand some of the things you can control. Grab that tax return we mentioned at the beginning, use the tools above, and ask questions of your financial advisor or tax professional. What could you be doing differently? What opportunities exist for you to improve your situation?
As always, if you have further questions or want to chat about your specific circumstances, please give us a call at 360-464-2025 to schedule a time to chat!