Two in five people say they struggle with money management. At the same time billions of dollars go down a virtual drain each year, partly driven by low levels of financial literacy in the U.S.
In 2025 alone, the average U.S. resident lost $948 due to mistakes stemming from poor financial literacy, amounting to $246 billion nationwide across 260 million adults.
In light of Financial Literacy Month taking place during April 2026, the firm BrokerChooser has analysed data to uncover the financial terms that people tend to find most confusing.
Financial Literacy Month is dedicated to raising awareness about smart money management, budgeting, saving, and investing. It promotes education on financial principles, such as understanding credit, reducing debt, and planning for long-term goals.
Financial Literacy Month: Top 10 financial terms that baffle us the most
| Rank | Finance term | Average monthly searches for definition (US) | Average monthly searches for definition (Worldwide) | Share of total searches (%) |
| 1 | Equity | 70,000 | 247,100 | 11.73% |
| 2 | APR (Annual Percentage Rate) | 55,100 | 107,590 | 5.11% |
| 3 | GDP (Gross Domestic Product) | 49,000 | 176,800 | 8.39% |
| 4 | ETF (Exchange Traded Funds) | 48,900 | 142,230 | 6.75% |
| 5 | Annuity | 34,000 | 77,550 | 3.68% |
| 6 | Principal | 33,200 | 76,750 | 3.64% |
| 7 | Capital | 27,300 | 81,700 | 3.88% |
| 8 | Yield | 25,100 | 88,250 | 4.19% |
| 9 | Correlation | 21,500 | 71,700 | 3.40% |
| 10 | Arrears | 18,900 | 83,260 | 3.95% |
As shown in the data table, equity is the most misunderstood financial term worldwide and in the U.S. Adam Nasli, Head Analyst from BrokerChooser, tells Digital Journal: “While it’s a fundamental financial concept, equity is often misunderstood due to its broad usage across different contexts. Equity is the amount an owner would retain if they sold an asset or business, after settling any debts tied to it. In simple terms, it’s the value you truly own. For example, if you own a house worth $300,000 and you owe $200,000 on the mortgage, your equity in the home is $100,000.”
Nasli adds: “In the stock market, equity usually refers to shares in a company – giving investors partial ownership, potential voting rights, and a share in the profits. As with a home, a company’s equity represents the difference between its assets and liabilities – what the owners would effectively be left with after selling all assets and settling all obligations.”
APR (Annual Percentage Rate) places second in the US, with 55,100 monthly searches
Despite appearing on everything from credit card statements to mortgage agreements, APR continues to perplex many. It represents the total annual cost of borrowing, including not just the interest rate but also any additional fees or charges tied to the loan, providing a more accurate picture of what borrowers will actually pay.
GDP ranks third, with 49,000 US searches per month. Despite being frequently mentioned in the news, ‘GDP (Gross Domestic Product)’ ranks as the third most confusing financial term. GDP measures the total market value of all final goods and services produced in a territory – usually a country – within a given time frame such as a quarter or a year.
ETF (Exchange Traded Fund) continues to puzzle investors. An ETF is a fund traded on a stock exchange. A fund can include many asset types, including equities, bonds, commodities or even forex. For example, a fund that tracks the S&P 500 Index holds the 500 stocks that constitute the index. The most popular ETFs are equity ETFs that track popular equity indexes like the S&P 500. ETFs are issued by asset management companies like Vanguard or BlackRock. One asset management company can issue many ETFs.
