Financial Literacy Statistics, Data and Results

The NFEC’s provides financial literacy statistics, empirical data and professional opinions on topics centered on financial literacy. Using polls, surveys, research, and think tanks, the NFEC gathers data and an open source model to share the results with the industry and general public.

The goal is to share the latest information and best practices with the financial education industry, provide those in the media the latest information and to support the development of financial literacy programming. Visit the Financial Literacy Test & Survey Center for the most recent data and live results.

Financial Literacy Testing Center & Financial Literacy Statistics

Young Adults Financial Literacy Survey

Survey – What high school course would benefit you the most in the real world? Over 1,100 recent graduates responded in favor of personal finance.

62.42%

Average test results for all ages groups tested for the National Financial Capability Test

National Financial Literacy Test Results

View the results from over 8,000 participants and test your Financial IQ.

Sponsor Opportunities Financial Education

Hiring, Promotion – Personal Finance Survey

NFEC survey of 35 – 54 year olds reveals many are denied jobs an/financial-background-check-surveys/d promotions due to their personal finance situation.

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The National Financial Educators Council asked 1,101 young adults aged 18-24 “What high school-level course would benefit your life the most?” The majority (51.4%) responded “money management” as the high school-level course they thought would be most beneficial to their personal lives. 99% confidence interval and a less than 4% margin of error.

Three years after implementing a financial education mandate in Georgia, Idaho and Texas, all three states examined saw increased credit scores and lower delinquency rates on credit accounts. FINRA Investor Education Foundation State Financial Education Mandates

The Federal Deposit Insurance Corporation longitudinal evaluation results indicated that participants who completed the published the results of a program on checking, savings, budgeting, and credit showed statistically significant improvements in their financial behaviors and confidence, improvements which persisted 12 months later. Federal Deposit Insurance Corporation. Longitudinal Evaluation of the Intermediate-term Impact of the Money Smart Financial Education Curriculum Upon Consumers’ Behavior and Confidence as reported in the National Financial Capability Strategy.

Three years after implementing a financial education mandate credit scores of participants improved by 11 points in Georgia, 16 points in Idaho and 32 points in Texas. FINRA Investor Education Foundation State Financial Education Mandates

A financial literacy test conducted in 2010 regarding a specific retirement contribution plan found that respondents were largely unable to differentiate between investment options, but that making personal contributions was associated with greater knowledge. Dvorak T, Hanley H. Financial Literacy and the Design of Retirement Plans as reported in the National Financial Capability Strategy.

Three years after the states implemented their financial education mandate in Georgia, Idaho and Texas, 90-day delinquency rates on credit accounts decreased in all three states. FINRA Investor Education Foundation State Financial Education Mandates

Financial decision-making can be influenced positively by presenting high-quality, non-complex information; providing incentives for good decisions; and facilitating the best use of available information in real-life situations.   Altman M. Implications of Behavioural Economics for Financial Literacy and Public Policy as reported in the National Financial Capability Strategy.

According to the State Financial Education Mandates study, it takes time for state financial education mandates to have an effect. While very few positive effects were measured one year after implementation, by the second year after implementation, there were consistently positive results for the students. The authors contend that this lag could be due to both students and teachers adjusting to changes in the course curriculum. FINRA Investor Education Foundation State Financial Education Mandates

The National Financial Educators Council asked 1,101 young adults aged 18-24 “What high school-level course would benefit your life the most?” The majority (51.4%) responded “money management” as the high school-level course they thought would be most beneficial to their personal lives. 99% confidence interval and a less than 4% margin of error.

In a poll conducted by the National Financial Educators Council – Adults age 35 to 54 were asked “Have you ever been turned down for a job or promotion as a result of your credit or financial background?” Of the 1,165 who responded to the first question, 5.2% stated that they had been turned down for a job due to their financial profiles (with 18.2% responding “not sure”).

In a poll conducted by the National Financial Educators Council – Adults age 35 to 54 were asked “Has an employer or potential employer ever conducted a credit or financial background check as a condition of hiring you or giving you a promotion?” Among the 1,100 who answered the second question, 26.3% reported that an employer had checked their financial background (29.8% said “not sure”).

View the latest results from over 8000 participants the completed the National Financial Literacy Test – Click here.

See the latest real time results from the NFEC’s Advanced Financial Education Test – click here.

The Financial Foundation Test measures participant’s ability to make larger financial decisions – get the latest real time results – click here.

Access the NFEC’s Testing & Survey Center that includes the latest real time results of over 30 tests & surveys. Visit the Testing & Survey Center – click here.

In a poll conducted by the National Financial Educators Council – Adults age 35 to 54 were asked “Have you ever been turned down for a job or promotion as a result of your credit or financial background?” Of the 1,165 who responded to the first question, 5.2% stated that they had been turned down for a job due to their financial profiles (with 18.2% responding “not sure”).

In a poll conducted by the National Financial Educators Council – Adults age 35 to 54 were asked “Has an employer or potential employer ever conducted a credit or financial background check as a condition of hiring you or giving you a promotion?” Among the 1,100 who answered the second question, 26.3% reported that an employer had checked their financial background (29.8% said “not sure”).

Although this page is dedicated to financial literacy statistics, we invite you to look outside what is presented and think about what these financial education statistics truly mean. For example, Walter Updegrave, senior editor of Money magazine, points out that nearly half of workers had saved less than fifty grand for retirement, and 15 percent had not saved a single cent. Looking beyond the financial literacy statistic, consider what this means to the 65% of people he referred to. The reality for many is that their senior years will not be so golden and a majority of those will struggle financially.

In 2012, 56% of people in the US have no ‘rainy day funds’. FINRA Investor Education Foundation

More than half of millennials (about 54 percent) say debt is their “biggest financial concern.” Wells Fargo Study

39% of millennials worry about their financial future “at least once a week.” Fidelity study

There’s a $6.6 trillion gap between the pensions and retirement savings of U.S. households and what they should have to maintain their living standards in retirement – and the gap is growing. Retirement Income Deficit report by Retirement USA

41% of baby boomers expect their standard of living to decrease in retirement. Transamerica Center for Retirement Studies.

Only 14% of baby boomers have a written retirement strategy. Transamerica Center for Retirement Studies.

HR professionals indicated financial worries continue to contribute to employee stress on the job. MetLife

83% said that personal financial challenges had a large impact or some impact on overall employee performance. Society for Human Resource Management

In 2012, 56% of people in the US have no ‘rainy day funds’. FINRA Investor Education Foundation

46% of Americans have less than $10,000 saved for retirement. Employment Benefit Research Institute

In December 2013, 19% of all homes owed at least 25% more on their mortgage than the home was worth. RealityTrac

Student load debt exceeds $1.1 Trillion.    Fastweb and FinAid

As reported in September 2013, the three-year cohort default rate rose from 13.4% for FY 2009 to 14.7% for FY 2010. US Department of Education

“Financial illiteracy is not an issue unique to any one population. It affects everyone: men and women, young and old, across all racial and socioeconomic lines. No longer can we stand by and ignore this problem. The economic future of the United States depends on it.”
President’s Advisory Council on Financial Literacy

“College graduates spent 16 years gaining skills that will help them command a higher salary; yet little or no time is spent helping them save, invest and grow their money.”
Vince Shorb, CEO, National Financial Educators Council

“If you don’t understand the language of money, and you don’t have a bank account, then you’re just an economic slave.”
John Hope Bryant, CEO, Operation HOPE

“The widespread deficit in financial literacy has raised a good deal of concern among government agencies, policymakers, and leaders in the community and business sectors. There are several reasons for this concern. First, the number and complexity of available financial products have increased dramatically in the past two decades, effectively transferring a higher burden of financial responsibility and risk to the consumer.”
National Financial Capability Strategy

“Financial education program is carefully implemented, it can improve the credit scores and lower the probability of credit delinquency for young adults.”
FINRA Investor Education Foundation State Financial Education Mandates

“There is a secret psychology of money. Most people don’t know about it. That’s why most people never become financially successful. A lack of money is not the problem; it is merely a symptom of what’s going on inside of you.”
T. Harv Eker

“The number one problem in today’s generation and economy is the lack of financial literacy.”
Alan Greenspan

“We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate.”
Robert Kiyosaki

“Teachers are the single most important influence on student success. The qualifications of financial educators have direct impact both on short-term student outcomes and on their long-term financial well-being.”
Vince Shorb, CEO, National Financial Educators Council

  • Only fifty-nine percent of the young adults in Generation Y (ages eighteen to twenty-none) pay their bills on time every month. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
  • Ten percent of American with mortgages reported being late or missing a mortgage payment in the last year and seven percent of adults are either getting calls from collectors or thinking about filing for bankruptcy. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
  • Almost fifty percent of those who closely monitor their finances say that they learned about personal finance from their parents or at home more frequently. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
  • Eighty-five percent of college graduates plan to move back home after graduating. (Twentysomething Inc. 2010 survey) The rate has risen from sixty-seven percent in 06’. (Jessica Dickler, CNN staff writer)
  • About thirty-four percent of parents have taught their teen how to balance a checkbook, and less than that has explained how credit card interest and fees work and ninety-three percent American parents with teenagers report worrying that their children might make financial missteps such as: overspending or living beyond their means. (Charles Schwab’s 2008 “Parents & Money)
  • Around sixty-nine percent of parents admit to feeling less prepared to give their teenager guidance about investing than they do having the ‘sex talk’ with them. (Charles Schwab’s 2008 “Parents & Money)
  • Three out of every four Americans say they aren’t saving enough. (2008 Pew Research Center)
  • Fifty-four percent of college student respondents had overdrawn their bank account and eighty-one percent underestimated the amount of time it would take to pay off a credit card balance by a large margin. (Center for Economic and Entrepreneurial Literacy Survey)
  • Forty percent will never gain a net worth in excess of ten thousand dollars. (American Dream Education Campaign)

As you can see already from the financial education statistics shown, most experts are in agreement that people are suffering because they missed out on financial literacy training. Each of these studies point to the fact that most people never received a personal financial education course and the consequences can be challenging.

The financial literacy statistics listed below are also focused on the consequences as well as where youth expect to pick up these skill sets. The last grouping of statistics shown will get more into the benefits of offering money management courses.

  • Students between the ages fifteen to twenty-one report that they feel unprepared to face the complex world of the twenty-first Century (American Dream Education Campaign)
  • Often times the educators themselves aren’t familiar with financial materials and are “afraid that students will ask questions that they don’t have the answers to, so they steer clear. (“Financially Illiterate: Schools not Teaching Personal Finance,” FoxNews.com, 06/18/02)
  • Ten percent of American with mortgages reported being late or missing a mortgage payment in the last year and seven percent of adults are either getting calls from collectors or thinking about filing for bankruptcy. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
  • The majorities of educators were not giving a financial education course and feel unprepared to teach the subject. Many lack the confidence to teach it to students. (“Taking Ownership of the Future,” Financial Literacy and Education Committee, 2006)
  • Students and parents agree that college students are not well prepared to deal with the financial challenges that lie ahead. Less than one-quarter of students or about twenty four percent and only twenty percent of parents say students are prepared to deal with the financial challenges that await them in the real world. More than three-quarters of student, about seventy six percent, report that they wish they had more help preparing for their personal finances. (The Hartford Financial Services Group, Inc.)
  • Around ninety seven percent of parents (or legal guardians) that have a child(ren) eighteen years of age or younger expect their oldest child to continue their schooling through college, and around seventy-nine percent of these same parents expect to pay for some or all of their child’s college education. (Wall Street Journal Online/Harris Interactive Personal Finance Poll)
  • Eleven percent expects to pay less than five thousand dollars. Seventeen percent expects to pay five thousand dollars to just under ten thousand dollars and sixteen percent expect to pay over thirty grand. About twenty-six percent of parents who are expecting to pay for their kids college education have saved less than five thousand and thirty-two percent don’t have anything saved. (Wall Street Journal Online/Harris Interactive Personal Finance Poll)
  • Over ninety two percent agree that it is important to have good money habits to be successful in life and believe it’s important to know how to manage money to live within your means. In addition the same percentage reports that it feels good to see their money grow. (Charles Schwab Foundation)
  • Only twenty percent had saved over a thousand with older teens 16-18 significantly more likely than their younger counterparts. (Charles Schwab Foundation)
  • A survey among working teenagers found that about fifty percent say when they get paid that they spend some of it and save the rest, while thirty percent said they deposit the money in an account. Fifty three percent of teens report saving for the future. (Charles Schwab Foundation)
  • The majority of college students say they pick up most of their personal financial education from their parents, but less than half of students said their parents make a consistent conscientious effort to teach them. About seventy percent of college students say their parents are their main source of information. (The Hartford Financial Services Group, Inc.)
  • Forty-nine percent of teens are ‘eager’ to learn more about money management. Only fourteen percent had taken a class on a financial literacy topic and over a third want to learn money skills from their parents. (Capital One)
  • Only eighteen percent of parents are talking about school budgeting and seventy nine percent of parents see themselves as positive money role models for their kids. Only a small percentage of parents are taking advantage of the everyday learning opportunities about money. (Capital One)
  • Almost one-third of college students, when reflecting back on their freshman year, admit that they were not very well prepared for personal money management on campus. Twenty percent of students claim to have been very well prepared. (KeyBank and conducted by Harris Interactive)
  • Three out of four admit to having made mistakes with their money when they arrived on campus. (KeyBank and conducted by Harris Interactive)
  • When asked how closely they tracked where their money was being spent, fewer than forty percent said they track their spending very closely. (KeyBank and conducted by Harris Interactive)
  • About fourteen percent of American adults mentioned their company’s retirement plan when asked about ways they save. (Harris Interactive for the American Institute of Certified Public Accountant)
  • Although those financial literacy statistics paint a dismal picture of what is going on with financial education. There are some financial education statistics that do give us hope.
  • The fact is that the financial literacy statistics reflect what happens when you never teach kids about money. The overwhelming majority of students never received financial education, and the financial literacy statistics shows the results of this omission.
  • The financial literacy statistics in the next section are more positive in nature and reflect what can happen when a practical financial education is delivered.
  • Research shows that individuals graduating from high schools in states that require personal finance education have higher savings rates and net worth as a percentage of their earnings than individuals graduating from high schools in states where financial education is not mandated. (“Integrating Financial Education into School Curricula,” The Department of the Treasury)
  • Eighty seven percent of teens report their parents are their main source of financial education. (Charles Schwab Foundation)
  • Research indicates that people who have had financial education participate more often in retirement programs, make larger contributions to the program and have a much higher savings rate than others. (“Integrating Financial Education into School Curricula,” The Department of the Treasury)
  • We need a completely different set of skills for kids to operate well in what we call a ‘Third Wave,’ or knowledge-based, economy. We must therefore, radically redesign our conception [of schools].” (Alvin Toffler)
  • Eighty nine percent of people are in agreement that saving and investing can help you achieve the freedom to do what you want in life. (Charles Schwab Foundation)
  • About two out of three parents surveyed say they definitely see personal finance education as their responsibility and consistently make the effort to teach their children about it, compared to the only forty one percent of students who say their parents did. (The Hartford Financial Services Group, Inc.)
  • Teenagers that reported learning about managing savings and checking accounts were more likely to report having opened both types of accounts, and they were more likely to save, have a budget and money to make purchases. (Boys & Girls Clubs of America and the Charles Schwab Foundation)
  • Youth that reported learning to create and maintain a budget were more likely to report actually developing one. (Boys & Girls Clubs of America and the Charles Schwab Foundation)

“Distinguished financial education instructors are not merely dispensers of knowledge; they are learning facilitators who can mold and modify participants’ behavior to guide them toward financial wellness. They understand that the subject of personal finance is unique in that it elicits emotional reactions from participants. These instructors have come to realize that a “one-size-fits-all” pedagogy does not work for delivering high-quality financial education.” Framework for Teaching Personal Finance

Under-qualified or poorly-performing financial educators may bring future economic disaster. The effects of poor teaching can continue to affect students’ lives for many years after instruction ends. W. L. Sanders, Financial Literacy and Education Committee (2006), Taking Ownership of the Future as reported in the Framework for Teaching Personal Finance.

Not only do under-qualified teachers reduce overall student achievement levels, but sub-par teachers also tend to be paired with already under-performing or at-risk students—thus exacerbating the risk of future economic problems resulting from financial illiteracy. William J. Webster and Robert L. Mendro, Dallas Public Schools, The Dallas Value-Added Accountability System Report as reported in the Framework for Teaching Personal Finance.

Evaluating Financial Literacy Statistics

Erin Mitchell, Student intern for the National Financial Educators Council

Looking at the financial education statistics it is obvious to me that a lot of people are suffering due to financial illiteracy. The financial literacy statistics clearly show a lack of even the most basic knowledge. Many people wonder why so many are suffering from money problems.

Financial literacy test results are a crystal ball into the future. Seeing that the majority of college students don’t understand the importance of paying bills on time is a financial literacy statistic that says to me that a lot of those students will have credit problems. Seeing the financial education statistic that states that most do not have a set savings plan shows me that there will probably be a lot of people not able to retire.

I think it’s obvious, that, unless we change these negative financial literacy statistics into positive financial education statistics that many people will still suffer from money problems.

Although not an education expert, if money issues are causing people this much trouble – shouldn’t they teach this somewhere? The vast majority of all the financial literacy statistics point to the lack of a financial education as the primary cause of many of the problems. Shouldn’t we address that instead of billions and trillions into the results of lacking a financial education?

The financial education statistics and trends all lead us to one conclusion. That a practical financial education will take those financial literacy statistics and turn them into something we can all be proud of. How much would it help if we took the 50% of people who have less than $50k saved for retirement, and we could reduce that to 25%? That change in that financial literacy statistic alone would improve the strength of this country and the world.

As I watched an economist on CNBC discuss leading indicators, I thought how financial literacy survey results can be leading indicators to the future economic strength of individuals, communities, organizations and even the country and world.

First let me address the individuals. The statistics from the American Dream Project that shows only 40% of people that will never gain a net worth in excess of $10,000 has some real consequences for that person. With the elimination of social security and pensions this means to the 40% that they will either work their entire life, be supported by family or live off public assistance. In any case, they will struggle with their finances.

That financial literacy statistic will affect the community and company they are with. As money is a leading cause of stress and unhealthy coping behaviors the company they are working with will likely have a less productive workforce. If the company had a workplace financial education program some of the issues may be mitigated; however, if not that company will likely lose productivity from this employee. Looking at the community the likelihood of this person needing public assistance greatly increases. If that person needs public assistance where does that money come from?

Taking this financial literacy statistics out further and you can see how it impacts the country and world as a whole. The US is a consumption-based economy and if people cannot afford to purchase those items that they used to, you can see this financial literacy statistic will reduce the country’s GDP. With the global economy we are a part of today, this financial education statistic goes even further to show how the world will be impacted by the lack of personal financial education.

It is critical that we all begin working to improve the financial literacy statistics and empower people with a financial education. Making members of our community financially knowledgeable will improve the world as a whole.

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