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Ignorance can be bliss, but when it comes to personal finance<\/a>, it can also end up costing you a lot of money<\/a>.<\/p>\n\n See: 4 Reasons You Should Cancel Amazon Prime<\/a> Indeed, a new National Financial Educators Council (NFEC) survey found that lacking financial literacy \u2014 and not knowing how to manage personal finances \u2014 carried a high cost in 2022. The NFEC survey showed that 38% of Americans said their lack of financial literacy cost them $500 or more, and a whopping 23% said it cost them more than $10,000 \u2014 a steep increase from the 10.7% who said the same in 2021.<\/p>\n\n As a result, the estimated average amount of money that financial illiteracy cost Americans was $1,819 in 2022 \u2014 the highest average since the first annual survey took place six years ago. This figure correlates with record-high inflation rates and other economic challenges, the NFEC noted.<\/p>\n\n \u201cYou have to learn about money from somewhere. For a lot of people, they learn from mistakes. That can put them in survival mode versus really being able to thrive and win with money,\u201d said Kristina Ellis, college finance expert at Ramsey Solutions. \u201cEarly financial literacy equips people with the tools they need to not only meet their basic financial needs, but it encourages them to save and invest, ultimately allowing them to reach financial freedom.\u201d<\/p>\n\n In terms of common costly mistakes, overdraft fees were prominent: the median overdraft fee on a debit card is $34, according to the Consumer Financial Protection Bureau (CFPB).<\/p>\n\n According to the survey, which cites CFPB data, most debit card overdraft fees happen on transactions of $24 or less \u2014 and American consumers end up spending $17 billion a year on overdraft and non-sufficient funds fees.<\/p>\n\n Not paying attention to credit card interest rate fees is another common mistake. In the week ending Jan. 18, the average credit card interest rate was at a record 20.16%, according to Creditcards.com \u2014 so paying only the minimum balance monthly will quickly add up.<\/p>\n\n Additional common mistakes include needless luxury spending, buying overpriced new vehicles and succumbing to identity theft, scams and frauds, the survey found.<\/p>\n\n Madison Sharick, CFA, CFP and writer at Madi Manages Money, noted that while these are \u201cexplicit costs,\u201d there\u2019s a whole set of other costs that aren\u2019t as commonly considered \u2014 and they\u2019re the bigger-ticket items.<\/p>\n\n \u201cFor instance, taking an early cash withdrawal from a retirement account can cost thousands of dollars in penalties. Or, holding all of your money in cash instead of investing it leads to erosion to inflation over time,\u201d she said.<\/p>\n\n \u201cWhat percentage of us need to understand geometry in our day to day lives? But all of us need to understand how to make a budget, how to invest for retirement, and how to use credit responsibly,\u201d said Todd Stearn, founder and CEO of The Money Manual. \u201cThe U.S. can be a very difficult place to live comfortably when you\u2019ve never been taught at least the basics of personal finance. I highly recommend prioritizing gaining this knowledge in 2023.<\/p>\n\n For example, Stearn recommended learning how compound interest can \u201cliterally save your life in retirement.\u201d In addition, learning how to build your credit score can help one qualify for the best mortgage or auto loan rates, and learning about inflation can help you manage your savings better.<\/p>\n\n \u201cYou don\u2019t need to be perfect. Gaining financial literacy is the start to greater peace of mind,\u201d he added.<\/p>\n\n Other experts also stressed the importance of better understanding the cost of higher education.<\/p>\n\n \u201cMore attention needs to be paid to educating families about 529 college savings plans and other ways to prepare for higher education expenses,\u201d said Patricia Roberts, COO of Gift of College and author of \u201cRoute 529: A Parent\u2019s Guide to Saving for College and Career Training with 529 Plans.\u201d<\/p>\n\n \u201cFamilies need to realize that borrowing excessive amounts to attend an unaffordable dream school can lead to financial nightmares,\u201d said Roberts.<\/p>\n\n Roberts added that in addition to unmanageable amounts of student loan debt potentially causing significant stress for years to come, it can stymie borrowers\u2019 ability to save for retirement, qualify for a mortgage, or save for their own children\u2019s education when they start a family.<\/p>\n\n Take Our Poll: Are You In Favor of More Inflation Relief in 2023?<\/a> This sentiment is echoed by several experts, including Will Sealy, CEO of Summer. Sealy said the top advice for student loan borrowers is to start your homework early and lean on trusted sources like Federal Student Aid.<\/p>\n\n \u201cWhen in doubt, ask your HR or benefits team for help. Employers may offer student loan assistance as a free employee benefit, along with other financial literacy tools. Student loan contribution programs are only becoming more popular and can make a big impact on your financial situation,\u201d said Sealy.<\/p>\n\nWhat can Americans Do To Lower Costs in 2023?<\/h3>\n\n