57% of Americans fail to score even 50% on a financial literacy test

Financial Literacy Epidemic: 57% of Americans Can’t Even Score 50% on a Financial Literacy Test

If you think you’ve mastered the basics of finance, you’re either overconfident or in the minority. A new report from the Global Financial Literacy Excellence Center shows that the average American scored just 48 percent on a financial literacy test, with groups scoring as low as 37 percent in certain areas.

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Since the report began in 2017, the results have been relatively stable: Americans scored 48% to 52% correctly on the annual study. But only 16% of Americans scored between 75% and 100% on the test in 2024. This alarming statistic has far-reaching consequences for businesses, the broader economy, and more than half of all Americans.

While many argue that gender, race or generation do not play a role financial literacyThe results tell a different story. Here are some of the most worrying statistics:

• Women scored on average 10 points less than men.

• Black and Hispanic Americans scored lower than Asian and white Americans.

• On average, Gen Z answered just 37% of the index questions correctly in 2024, the worst performance of any age group.

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This lack of financial literacy has significant implications for everyday personal finances. According to the study, those with very low levels of financial literacy were twice as likely to be in debt distress.

The study also shows that those with low financial literacy are:

• 3.5x more likely to be financially fragile.

• 4x more likely to not have even one month of emergency savings.

• 3x more likely to not have a solid retirement income plan.

• 3x more likely to spend more than 10 hours per week on money matters.

Americans of all ages, genders and races consistently scored worst on functional knowledge classified as “risk understanding,” answering an average of just 35% of questions correctly in 2024.

What’s the solution? A Forbes article suggests that employers should create financial wellness programs. Recognizing that financial anxiety, distress, or overwhelm can have long-term consequences for mental health, well-being, and organizational productivity, companies are rethinking financial education.

However, this requires major investments in employee financial health by adopting innovative, personalized and engaging approaches to financial education. Done well, organizations can reap huge rewards in long-term organizational health.

The story continues

Is there a light at the end of the dark financial tunnel that Americans are struggling to escape? The power lies in the hands of individuals and organizations. Will we see real change? Only time will tell if companies can muster the resources to reverse a long-standing trend that plagues many American families.

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This article Financial Literacy Epidemic: 57% of Americans Can’t Even Score 50% on a Financial Literacy Test originally appeared on Benzinga.com

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