20+ Compelling Financial Literacy Statistics [2023] - Zippia (2024)

Financial literacy research summary. Financial literacy is one of the most important skills a person can have, but that doesn’t mean everyone has it. From knowing how to save money to knowing just how much you can afford to spend, there are many skills that make someone financially literate. According to our research:

• Only 57% of American adults are financially literate.

• 73% of teens want a more personal finance education.

• Americans lose an average of $1,819 annually due to financial illiteracy.

• 77% of Americans are financially anxious.

For further analysis, we broke down the data in the following ways: Adult Financial Literacy | Education | Cost of Financial Illiteracy | Financial Insecurity

Financial literacy rate demographics

Financial literacy can be more or less common depending on many different factors. For more information about the demographics of financial literacy, here are some key statistics:

• Only 36% of Gen Z are financially literate.

  Younger generations are significantly less financially literate than older generations. For instance, 59% of Baby Boomers are considered financially literate.

  Financial literacy by generation

  Generation	Financial literacy rate
  Gen Z	36%
  Millennials	48%
  Gen X	48%
  Baby Boomers	59%

• Women are 40% more likely to have low levels of financial literacy.

  Approximately 21% of women score a low level of financial literacy, compared to 15% of men.

• Asian and White Americans score the highest on financial literacy tests, answering 53.3% of questions correctly.

  Asian Americans and White Americans answered an average of 3.2 out of 6 financial literacy questions correctly. While Hispanic Americans answered 2.6 out of 6 questions correctly (43.3%), and Black Americans answered 2.3 out of 6 questions correctly (38.3%).

  Financial literacy by race/ethnicity

  Race/ethnicity	Average questions answered correctly	Percent of questions answered correctly
  White	3.2	53.3%
  Asian	3.2	53.3%
  Hispanic	2.6	43.3%
  Black	2.3	38.3%

• Financial literacy rates have fallen 19% within the past decade.

  Financial literacy rates have decreased considerably just within the past 10 years; in line with the fact that financial literacy rates have fallen from generation to generation.

Adult financial literacy

A surprising number of US adults lack financial literacy, young and old. For more essential facts about financial literacy among adults, keep reading:

• 25% of American adults don’t have anyone to ask for trusted financial guidance.

  Financial literacy is a generational problem, with many adults feeling like they have no one to turn to for advice. This means many children, parents, and grandparents likely struggle with financial literacy.

• 63% of Americans live paycheck to paycheck.

  Approximately 125 million Americans live paycheck to paycheck week after week. While not all of these people lack financial literacy, lack of financial literacy is likely contributing to this issue.

• 71% of Americans believe they have high financial literacy levels.

  See Also

  4 Points about Gen Z Financial Literacy and Habits | EVERFIBaby Boomers, Gen Xers Wound Down Nonmortgage Debt | LendingTree

  The average American rates their financial literacy at 6.2 out of 10, despite the fact that on tests, the average American only answers 35-55% of the questions correctly.

• Only 16% of Millennials understand basic financial principles.

  The northern triangle is made up of El Salvador, Guatemala, and Honduras. Mexico also has a low average English literacy rate of 25%. While, on the other hand, immigrants from Asian countries have an average literacy rate of 54%

Financial literacy education

Financial literacy is lacking among adults primarily because of a lack of education. Whether received from parents or the public school system, proper financial literacy education is vital. For example:

• Only 25% of American teens have confidence in their personal finance knowledge.

  Divided on gender lines, 33% of teen boys and only 21% of teen girls are confident in their personal finance knowledge.

• 24% of 15-year-olds regularly discuss finance with their parents.

  Financial discussion with parents is lacking, which means financial education in school is even more vital for growing teens.

• There are 20 states that require high schools to teach financial literacy.

  To learn more about the states with financial literacy requirements, and the effects of those requirements, here is a detailed list of all 50 states:

  Financial literacy education requirements by state

The cost of financial illiteracy

Low financial literacy costs Americans thousands of dollars per year, which hurts not only you, but also the economy as a whole. To find out more about the cost of poor financial literacy, here are some stunning facts:

• 15% of adults lost over $10,000 last year due to a lack of financial literacy.

  $10,000 is a huge amount of money to be lost to a lack of financial literacy. From down payments for a new home to being able to purchase a new car, losing this much money in a year is devastating.

• 38% of adults lost at least $500 last year due to a lack of financial literacy.

  While not as extreme as $10,000, losing $500 per year can still mean the difference between affording an important car repair, or being able to buy groceries.

• 53% of Americans don’t have an emergency fund.

  A stunning 60% of Americans can’t cover the cost of a $1,000 emergency with cash from their savings, putting most in dire circ*mstances when faced with emergencies.

Financial insecurity

Financial insecurity is a concern for millions of Americans, especially due to unideal financial literacy rates. To find out more about how Americans are feeling about their finances, here are some key facts:

• Despite working full-time, 35% of American families still can’t afford rent, food, transportation, medical care, and minimal household expenses

• 18% of adults claim to just “get by” financially

• 55% of Americans don’t think their retirement savings are on track

• 73% of American adults rank finances as their primary stressor.

• 29% of Americans stress about money daily

Financial Literacy FAQ

1. What is financial literacy?

   Financial literacy is knowing the skills and behaviors needed to make informed decisions with money. In other words, someone with financial literacy is able to competently earn, spend, invest, save, budget, and borrow money.

   For example, someone who is financially literate would know that a car loan should constitute no more than 10-15% of their total income. Then, use that information to purchase a car that will have a payment within or less than that range.

   There are many other examples of financial literacy, but the most important thing to note is that it impacts almost every aspect of modern life.

2. What percentage of Americans are financially literate?

   57% of US adults are financially literate. This is down 19% from a decade ago, in part due to the generational differences in financial literacy. For instance, 59% of baby boomers are considered financially literate, while only 36% of Gen Z are.

   Whether through a lack of proper education or a struggling economy, the reality is that many Americans experience financial stress, and are struggling to make ends meet day to day.

3. Where does the US rank in financial literacy?

   The US ranks 14th in financial literacy. While this isn’t the worst score in the world, it is concerning when you consider the fact that the US is the richest country on Earth.

   The number 1 country in the world for financial literacy is actually Denmark, where approximately 71% of all adult citizens are considered financially literate.

4. What percentage of adults are financially literate globally?

   Only 33% of adults worldwide are financially literate. This translates to an astonishing 3.5 billion adults who lack financial literacy across the globe.

Conclusion

Financial literacy is a crucial skill for all adults to have, but not all Americans have that skill. As of 2023, only 57% of Americans are financially literate, and that number seems to be going down generationally.

With the amount of financial stress Americans are facing amid post-Covid inflation hikes, financial literacy is not more important than ever before.

However, to improve financial literacy rates, states, parents, and educators will need to take the steps necessary to provide American teens with the financial literacy education they need to succeed as adults.

References

1. Annuity – From the Experts: Is Financial Illiteracy a Growing Problem in the U.S.?

2. Advisor – How Much Do Americans Lose Due To Financial Illiteracy?

3. CNBC – 77% of Americans are anxious about their financial situation—here’s how to take control

4. TIAA Institute – Financial literacy and wellness among U.S. women

5. TIME – Financial Literacy Education Could Help Millions of Americans

6. PR Newswire – Survey Finds Gen Z Lacks Knowledge and Confidence in Personal Finance and Investing

7. MoneyRates – States Where Financial Literacy Education Is Working

8. Orlando Sentinel – Empowerment through education during National Financial Literacy Month

9. New York Post – More than a third of working families can’t afford basic needs: study

10. CNBC – 55% of Americans are behind on saving for retirement—and that’s OK