Americans are getting smarter with money, but financial mistakes still cost the average adult nearly $1,000 each a year.
According to the latest survey from the National Financial Educators Council (NFEC), Americans lost an average of $948 from mistakes made due to a lack of personal finance knowledge in 2025. In a nation of approximately 260 million adults, that adds up to $246 billion in the train.
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Losing almost a thousand dollars hurts, but the good news is that it is the lowest level reported in the last seven years of the survey.
The year 2022 was especially bad: the average amount lost reached $1,800 during a time of painful inflation. The second-worst year was 2020, when the average loss was $1,634 amid shutdowns, job losses and pandemic panic.
Just under half (48.6%) of Americans surveyed reported losing at least $500 in 2025 due to inadequate financial education; for one in seven, it was $2,500 or more. Just over 4% said their lack of financial knowledge cost them at least $10,000 (1).
Three common currency mistakes accounted for the costliest mistakes, costing Americans billions combined last year. Here’s what they were and how you can avoid the same fate.
Racking up credit card interest and fees is by far the costliest financial mistake most Americans make, and will amount to a whopping $120 billion nationwide starting in 2022, according to the Consumer Financial Protection Bureau (CFPB) (2). Nationally, according to the Federal Reserve, credit card balances reached $1.23 trillion during the third quarter of 2025, an increase of $24 billion from the previous quarter (3).
Also according to the Federal Reserve, the average interest rate on credit cards issued by commercial banks reached nearly 21% in November of last year (4), while new card offers now average just under 24% according to LendingTree (5). At those levels, carrying a balance, even for a few months, can inflate the effective cost of purchases, especially for borrowers with lower credit scores, who tend to face the highest rates.
Paying on time each month, avoiding carrying a balance, and prioritizing payments on the balance of the debt with the highest interest can help prevent interest charges from piling up even more.
A balance transfer could be a way to get a break on debt that’s been rolling over month-to-month for a while—transferring your balance to a card that offers a 0% introductory rate could give you some time to pay off your balance.
Read more: The average net worth of Americans is a staggering $620,654. But it almost doesn’t mean anything. Here’s the number that counts (and how to make it fire)
Overdraft protection can be more expensive than most Americans realize. Among retail banks, the average fee for overdrafting a debit card is $34, according to the CFPB, and most of these fees apply to transactions of $24 or less (6). In total, the CFPB estimates that consumers spend $17 billion on overdraft and non-sufficient funds (NSF) fees (1).
The easiest way to avoid overdraft fees is to regularly monitor your account balance and maintain a margin to cover upcoming transactions.
Requesting a fee waiver is sometimes successful, particularly as a courtesy on the first overdraft fee (7).
There are several ways to reduce the risk of receiving an overdraft fee, such as setting up low balance alerts or accepting automatic transfers from other accounts. Although overdraft protection prevents your transactions from being declined, fees add up quickly and can quietly drain your account. Opting out eliminates that risk.
We know Americans whip out their credit cards too quickly, but what do they spend all that money on? Well, in part, it’s things they definitely don’t need.
The US luxury goods market was worth $115.22 billion in 2024 (8), and US consumers were responsible for approximately 21% of global luxury revenues (9).
According to a 2024 LoopMe survey, 70% of U.S. consumers report purchasing luxury goods or clothing each year, and one-third of those consumers say they spend at least $1,000 on premium products annually (10).
Nearly one in three (31%) luxury shoppers surveyed by YouGov in 2024 said they planned to spend more on high-end purchases in the next year than last year (11). In a different survey, nearly three-quarters (72.6%) of luxury shoppers said they plan to maintain or increase their spending on luxury (12).
While splurging occasionally in the context of a larger budget can be a good way to celebrate a special occasion or purchase an investment piece, purchasing premium goods with credit is a recipe for snowballing debt.
Experts recommend treating this type of high-value discretionary spending differently than spending on necessities: paying for optional purchases with fun money set aside for that purpose and within clear limits (13).
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National Council of Financial Educators (1); Consumer Financial Protection Bureau (2); Federal Reserve Bank of St. Louis (3); Federal Reserve Bank of St. Louis (4); Loan tree (5); Consumer Financial Protection Bureau (6); Consumer Financial Protection Bureau (7); Research and Markets (8); Bank of America (9); Loop(10); YouGov (11); e-vendor (12); Ramsey Solutions (13)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
