Tracking current financial literacy trends in the U.S.
Financial literacy: A insanely necessary skill that you may not even know you need.
When it comes to understanding key financial topics, most people unfortunately fall short. Formal personal finance education doesn’t really exist in most places. And when it does exist, it’s often extremely outdated. For instance, most of our staff who received at least some education in finance say they learned things like how to balance a checkbook… Not exactly a useful skill these days.
Financial Literacy is the ability to understand basic financial tools and processes that you need to be successful. The articles below track current consumer literacy trends in the U.S. to see how different groups fare. Below the articles, you can find more information about what financial literacy is, why it matters and what it looks like today.
August 9, 2017 | Joe Pye
The number of Americans without an emergency fund is at a six-year low.
August 4, 2017 | Michael Koretzky
Our favorite answer: Marrying the wrong person.
July 12, 2017 | Brian Bienkowski
They remind the My Family On a Budget writer of his money mistakes.
July 11, 2017 | Ryan Lynch
Even though parents want to have a conversation, bad habits are passed down through generations
July 3, 2017 | Dori Zinn
Generations retiring in a couple decades may not even get a retirement because of a $400 trillion retirement savings gap.
June 29, 2017 | Brandon Ballenger
States that voted for Trump have fewer credit cards, lower balances, and a worse understanding of money.
June 27, 2017 | Ryan Lynch
The test on basic money knowledge has been administered twice — and Americans failed it both times
June 13, 2017 | Dori Zinn
Women are not only better at saving, but also at investing. However, women don’t know they are better than men at money management.
May 16, 2017 | Gregory Cox
Study finds that women are more likely to financially prepare for the future
May 8, 2017 | Howard Dvorkin, CPA
Are kids today financially smarter than previous generations?
May 4, 2017 | Dori Zinn
Millennials don’t know what basic money terms are, and that’s a big problem.
May 2, 2017 | Dori Zinn
Men are more likely to ask for financial advice than women. What’s holding women back from talking about money?
April 26, 2017 | Dori Zinn
You probably don’t know enough about financial literacy, and your parents are to blame for it.
April 24, 2017 | Howard Dvorkin, CPA
It’s just another manufactured holiday. It doesn’t matter. Right?
April 21, 2017 | Dori Zinn
A quarter of Americans expecting a tax return will spend their money before they get it.
April 14, 2017 | Money Talks News
We’ve got a big list of ways to save on everything — and we do mean everything.
April 10, 2017 | Dori Zinn
Aging Americans want to leave an inheritance, but don’t want to talk about it.
April 4, 2017 | Howard Dvorkin, CPA
This month, Debt.com answers all your questions – in under a minute.
March 27, 2017 | Dori Zinn
Most families believe having money chats is very important but neither parents nor their adult children are actually talking about finances.
March 2, 2017 | Make Change
One woman’s personal quest to get right in her head and wallet.
February 23, 2017 | Brandon Ballenger
If Congress needs help helping people, it should look to these state legislators.
February 21, 2017 | Joe Pye
Most Americans aren’t financially prepared to handle an emergency expense. Cars and sickness are the worst.
February 15, 2017 | Dori Zinn
Most families have strong misconceptions about the value of an estate and this hurts us later in life when our loved ones pass away.
February 14, 2017 | Joe Pye
Americans prefer financial stability over looks and fitness in romantic partners.
January 26, 2017 | John Rampton
If you do, they’ll grow up better human beings, even if they never become an entrepreneur.
January 25, 2017 | Dori Zinn
Two-thirds of young adults have an actual fear of debt, even though they plan their spending on a constant basis.
January 11, 2017 | Dori Zinn
Money has a huge impact on our overall well-being in life. To reduce stress and be happier, we need money or a better attitude when it comes to money.
January 11, 2017 | John Rampton
No matter what our wealth level, we seem to waste money. It must be some part of human nature because it doesn’t matter how little or how much we have – there are some that see money as burning a hole in their pocket and they must spend it. Still others have proven it’s possible […]
December 13, 2016 | Dori Zinn
No state in the union has an A in financial literacy
December 6, 2016 | Dori Zinn
Most middle-income Americans don’t have a financial plan, while nearly half of those making more than $100,000 a year have do have one.
December 5, 2016 | Howard Dvorkin, CPA
Three new polls prove we know what to do about money, but we just refuse to do it.
November 24, 2016 | Debt.com
For those who answer yes, there’s good advice and even outside help.
November 14, 2016 | Howard Dvorkin, CPA
The swimmer, dancer, and Debt.com spokesman just got a credit card. Here’s why that matters.
November 7, 2016 | Lucy Lazarony
Will female clients increase demand for female financial planners?
October 19, 2016 | Howard Dvorkin, CPA
A mother has the money to lend her daughter for a jewelry business, but she’s not sure it’s a good idea.
October 17, 2016 | Dori Zinn
There’s a generational divide when it comes to kids knowing how much their parents earned
October 4, 2016 | Money Talks News
Only 26 percent of cardholders regularly read them. Find out why that’s a mistake.
September 19, 2016 | Howard Dvorkin, CPA
Focus on the parents first, then persuade them to teach their children.
September 13, 2016 | Money Talks News
There are at least 250,000 financial advisers in the United States, and not all are created equal.
September 1, 2016 | Dollar Stretcher
Don’t let old mistakes ruin your future. Try these five tips.
August 31, 2016 | Dori Zinn
These Transparency Dodgers are the 10 largest charities that didn’t disclose operation information, including fundraising performance.
August 17, 2016 | Howard Dvorkin, CPA
A reader wants to know the best way to teach her children about the value of money.
August 3, 2016 | Dori Zinn
You can now apply for financial aid a year in advance
July 28, 2016 | Treanna Lawrence
Many households don’t think they qualify for need-based financial aid – they’re wrong.
July 27, 2016 | Dori Zinn
They can teach saving and budgeting — barely — but not much else
July 18, 2016 | Howard Dvorkin, CPA
The latest craze in mobile gaming can teach as much as it entertains.
June 22, 2016 | Howard Dvorkin, CPA
A reader has only enough to pay the mortgage, car lease, or credit card. But not all three.
May 30, 2016 | Howard Dvorkin, CPA
3 financial lessons we can learn from the artist known as Prince
May 16, 2016 | Treanna Lawrence
Many Americans are figuring out the hardest lesson from college comes after you graduate
April 25, 2016 | Howard Dvorkin, CPA
For years, “experts” argued against teaching fin lit in high school. Now the public has spoken.
February 17, 2016 | Howard Dvorkin, CPA
A reader doesn’t want to deny her daughter anything, but her husband does.
January 13, 2016 | Howard Dvorkin, CPA
A reader wants to know how to shut up her boyfriend about her lottery habit. Howard sees a bigger problem.
November 19, 2015 | Debt.com
The good news: You can easily avoid all of them without breaking a sweat.
October 14, 2015 | Howard Dvorkin, CPA
A reader thinks her husband is crazy to pay for someone to advise them when they have no money.
September 21, 2015 | Howard Dvorkin, CPA
Long live the king!
September 14, 2015 | Howard Dvorkin, CPA
Giving an allowance is just the beginning.
September 10, 2015 | Debt.com
Hint: They value privacy and lack confidence.
August 10, 2015 | Howard Dvorkin, CPA
If so, there’s a right way and a wrong way. The right way is called “allowance.” The wrong way is called “cookies.”
May 19, 2015 | Jason Steele
This ridiculous fee cost you big, even though it didn’t cost your credit card company anything.
May 18, 2015 | Howard Dvorkin, CPA
Their woes might be good for the rest of the country.
May 7, 2015 | Jess Miller
Millionaires are expected to have it all, but here’s why they fear losing it — and what you can learn from them.
April 23, 2015 | Jess Miller
Women and younger people freak out about finances more, but they don’t have to. Here’s why.
April 22, 2015 | Brian Bienkowski
If you make these mistakes in college, you could be paying for them long after graduation.
April 16, 2015 | Jess Miller
April is Financial Literacy Month. But if you’re like most Americans, you may not know what all that stuff means. We break down some key terms for you.
April 15, 2015 | Brian Bienkowski
Don’t make an identity thief’s job easy. Avoid these costly mistakes.
April 14, 2015 | Jess Miller
Surprised? Here are 5 myths about winning the lottery that you didn’t know.
April 13, 2015 | Howard Dvorkin, CPA
It’s not a trick. Your boss will pay you to live healthy.
April 6, 2015 | Howard Dvorkin, CPA
You need to have “the talk” with your kids — about money.
March 30, 2015 | Howard Dvorkin, CPA
What do saving your money and saving your teeth have in common?
February 23, 2015 | Jess Miller
Women save better than men, but talking about financial planning is a different story.
February 16, 2015 | Howard Dvorkin, CPA
Last month, Slate magazine declared financial literacy a useless pursuit. That made me mad.
January 29, 2015 | Jess Miller
A new study says that Americans who vowed to lose weight in 2015 are also losing something else: debt.
November 10, 2014 | Howard Dvorkin, CPA
Women, because they know what they don’t know.
September 30, 2014 | Jess Miller
Gen Y’s coming of age party was the Great Recession, so they don’t trust banks for financial advice. Guess who they turn to.
September 26, 2014 | Jess Miller
The U.S. Department of Education says too many students at these schools are defaulting on loans.
September 5, 2014 | Jess Miller
Avoiding campus credit cards, why butter prices are going up, and the unconventional way one woman plans to pay for her daughters’ college education.
August 25, 2014 | Howard Dvorkin, CPA
I can’t spare you from dying, but I can help you with something you fear even more.
July 7, 2014 | Howard Dvorkin, CPA
Learning about money doesn’t have to feel like homework at Debt.com.
June 4, 2014 | Brandon Ballenger
New research shows we may have the wrong priorities when it comes to stress. But is that really a bad thing?
April 24, 2014 | Brandon Ballenger
A quirky nonprofit thinks underwear and Lindsay Lohan can teach high school students financial literacy.
March 24, 2014 | Michael Koretzky
You should worry more about your kids’ financial activity than their sexual activity.
October 24, 2013 | Brian Bienkowski
Walter White created a drug empire by generating the best product and brutally defending his turf. But he also imparted valuable lessons on life and money. it may sound crazy to learn life lessons from a meth dealer, but when it comes to money there is definitely wisdom to be imparted.
What is financial literacy?
If you’re financially literate, it means that you understand a wide range of key consumer finance topics. You:
- Know how basic checking and savings accounts work and how to avoid things like overdrafts and account closures.
- Understand general rules for financing and loans, so you can get approved to meet major life goals.
- Recognize the importance saving and have at least a basic grasp of investing to achieve better growth.
- Can manage debt effectively to minimize the risks of financial distress, repossession, bankruptcy and foreclosure.
- Understand how credit works and what steps you need to take to achieve and maintain a high credit score.
You don’t have to be a financial expert to be financially literate; you just need to know enough that you can manage your money day to day without causing problems. When it comes to personal finance, knowledge really is power. The more you know, the more likely you are to be successful.
5 Key Financial Literacy Statistics from 2017
#1: Less than one in five Americans give themselves an “A” for education
According to an 2017 Mintel study published through Experian, most Americans aren’t confident about their financial knowledge. Only 19% of Americans would give themselves an “A” for financial literacy. The rest of us fully admit that when it comes to solid money management, we know that we don’t know.
The same study found 21% of Americans are “not at all confident” that they can achieve their retirement goals. That makes sense, because if you don’t know how to strategically manage debt and invest wisely, you can save effectively.
#2: The average score on the National Financial Capability Test is 63
The National Financial Educators Council offers a National Financial Capability Test that measures your financial IQ. They created the test for 15-18 year-olds to see whether or not young adults are prepared for financial independence. Last year, that age group scored an average grade of 60.
However, the test is also open online to adults of all ages. They don’t score much better at 63.17, on average. In fact, only 48% of the over 17,200 people that have taken the test received a passing grade.
If you have some time, we recommend following the link above to take the test. It can be a good way to figure out if and where you lack key financial knowledge. Then you can come back here to start studying up in our Education Center.
#3: New Hampshire has the highest literacy rate, while Louisiana has the lowest
WalletHub conducted a WalletLiteacy Survey this year to see which states had the highest and lowest levels of financial literacy in the U.S. The scores measured everything from Financial Literacy Test grades for high school students to the number of adults with savings.
New Hampshire scored the highest at 72.26, while Louisiana scored the lowest at 57.10. Still, it’s not saying much when the highest score is barely a “C”; it just goes to show how far we all have to go before we can really claim to have a high literacy rate.
#4: 69% of Millennials say they’ve received no form of financial education
If you think grade-school educators are any more engaged with personal finance education now than they were when you went to school, think again. According to a National Association of Federally-Insured Credit Unions study, almost 7 in 10 Millennials admit they haven’t received any education.
Oddly, the same study revealed that 3 out of 5 Millennials reported they were “extremely” or “very” knowledgeable about financial products. You may be able to chock that up to the inexperience of youth. Unlike the adults polled in #1, Millennials haven’t had time to make enough mistakes to realize they don’t know enough.
#5: For every $1 spent on financial education, $25 get spent on marketing
Without classroom courses to learn, most people learn by encountering financial products in their daily lives. However, given that 25 times more money gets spent on marketing than on basic education, most people only encounter financial products when someone is trying to “sell” them a product. That’s according to a CFPB study of spending by financial institutions.
That’s not exactly a recipe for financial success. Without a basic knowledge of financial products outside of an up-sell marketing message, people don’t know what to use and what to avoid. For example, let’s say you overspend on credit and end up $10,000 in debt. Your mailbox is likely to be filled with offers for debt consolidation loans, balance transfer credit cards and settlement offers. How do you know which option to use to actually get out of debt successfully?
If you just read that question and don’t know how to answer it, start here. However, it shows just how dangerous a marketing culture without education can be.