Enlarge image
Skyline of Frankfurt am Main: The majority of those surveyed do not even know that the bank collects a decent commission for this system
Photo: Thomas Lohnes / Getty Images
The majority of adults in Germany are not familiar with very practical money matters.
The Finanztip Foundation asked 3,000 adults between 16 and 69 years of age in a representative study how overdraft facilities or installment loans work, which insurance is really necessary and what they should pay attention to when investing.
The result is somewhat disastrous.
More than half of the respondents failed this quiz, which concerns everyday life.
So there is still enough work to be done in this decade.
The best result was on the subject of inflation: Almost 70 percent of those surveyed know that they will be able to buy less of their savings in the coming year if their interest rate is one percent and inflation is two percent.
But more than 30 percent do not know this.
That was only one of twelve questions.
Another: Grandma bequeaths 5,000 euros, the money is to be invested in buying the kitchen in two years.
How should you invest the money: time deposits, giro, gold or equity funds?
Only 38 percent know the correct answer: Fixed-term deposits.
Or rent: the apartment is rented out warm for 850 euros.
What are the additional costs?
The respondents answer correctly about electricity and the Internet, but they also suspect water, garbage fees or stairwell cleaning.
Only around 24 percent are completely correct with their answer.
The general financial knowledge of insurance companies looks even worse.
Three out of eight insurances mentioned on the questionnaire are really necessary, five are not necessary, including the residual debt insurance.
Only ten percent of those surveyed were able to reliably differentiate between necessary and unnecessary insurance.
Ignorance exacerbates social problems
The first thing that is exciting is the wide spread in the results.
Basically: older people are on average more knowledgeable than younger, men more knowledgeable than women and homeowners more knowledgeable than tenants, although one of the twelve questions - about the ancillary rental costs - concerned decisions and the experience of tenants.
And when it comes to household income, it was the people with higher incomes who tended to be more knowledgeable.
Only when it comes to knowing about stocks is there an opposite trend.
The younger ones are more familiar with equity funds than the older ones.
They know that having a global equity fund that has holdings in many companies lowers the overall equity risk.
On the other hand, the boys often underestimate the short-term risk and want to invest Grandma's legacy in equity funds over two years.
Younger people don't know any interest
I suspect that experience is crucial for knowledge here.
Anyone who has started to earn money in the past ten years and think about their own finances has also understood that interest cannot currently increase money.
Since 2004 there has only been one year in which the interest on the overnight money account has exceeded inflation.
The preoccupation with stocks is therefore obvious.
Then there are the many new apps on the younger generation's favorite household device - the smartphone.
From Smartbroker to Scalable to the Sparkasse app, these programs are downloaded millions of times.
Risk of overconfidence
Ignorance is stupid enough.
But it becomes really dangerous when people think they know their way around but don't do it.
Around a quarter of those surveyed consider themselves financially smart.
The only annoying thing is that a third of these self-confident people fail the quiz with a bang and don't even get half of the possible points.
In practical life this easily leads to the following constellation: Confident and full of vigor, wrong decisions are made and expensive mischief is done.
The correct self-assessment "I have no idea" is also not much better.
Because it means that when in doubt, people seek advice from those who are very interested in other people's money, but not necessarily as interested in the well-being of their customers.
Then - with the very correct awareness that an international, market-wide equity fund could be the right investment for the long term - they go to the bank.
However, the majority of respondents do not even know that the bank collects a lot of commission with this investment, which is immediately deducted from the money invested.
Only 42 percent of those questioned are in the picture here.
Seven percent of the respondents seriously believe that the bank earns nothing and around twelve percent hope for the Samaritan gene of the banks: They think that the banks only charge fees if the equity fund makes a profit.
And now?
Heroic tasks
Heroic tasks await here: Knowledge of everyday finances must improve!
It is up to us journalists to provide information in such a way that consumers can only make stupid decisions in the knowledge that they are also stupid decisions.
When I look at the numbers, we also have to think about how we can make women more concerned with money.
The industrialized countries organization OECD calculates year after year that the difference in old-age income between men and women (46 percent) is nowhere higher than in Germany - within the OECD.
The financial literacy debate has been raging at school for 20 years.
And I still find out that the boys cannot replace empirical knowledge with knowledge.
Not because that would not be possible, but because it is often not taught in the first place.
Not everyone has to make every mistake themselves.
And then, like a vaccination campaign, we need outreach care.
Our information needs to reach people.
We look for some on Youtube, the others on Tiktok.
Mail readers get the right mail to their home.
Newspaper subscribers will not find consumer journalism on the last page, but in everyday life.
The report on the annual balance sheet of the local savings bank also contains information about the fees that the savings bank charges for the current account and whether it is actually the cheapest bank in the area or even in the state.
more on the subject
ETFs and overnight money: How you should invest your money nowBy Henning Jauernig
Finance professor on shares as an investment: "The Germans are no less fearful than they used to be" An interview by Tim Bartz
In times of digitization, outreach care means to be where the people are.
On Google or on ARD, on the radio or on your favorite podcast on Spotify.
Cost of ignorance
This week a fellow journalist asked me how much these knowledge gaps cost us as a society.
I then made a small two-part rough calculation from the area in which I am familiar - for the around 40 million households in Germany.
Leaving out what is not needed:
Superfluous insurance
Installment loans for the new red sofa (it has to wait for savings)
Installment loans for vacation, balcony instead of Tunisia
Christmas gifts on credit
Frustration shopping because the partner or employer is annoying
That saves a total of
500 euros a year
.
Buy cheaper, what is cheaper:
Changing the electricity tariff quickly brings in 100 euros.
Switching gas providers quickly brings in 100 euros.
Use the tank app until the e-car arrives: 80 euros a year.
Check car insurance: 100 euros or more are in it.
Modernize cell phone tariffs for the whole family, 120 euros per person.
As you can see, it quickly accumulates a thousand a year.
40 million times a thousand euros is 40 billion euros.
Don't nail me down on the total, but there is a lot of money involved.