The average American got just 48% of the questions on the TIAA Institute-GFLEC Personal Finance Index correct in 2024, well below a passing grade. Scores for that index have stayed around 50% for nearly 10 years, reflecting a persistent gap in financial knowledge necessary to make the best decisions about money, retirement, and more.
Financial literacy rates vary based on location, education, gender, race, and other data. Read on for a deep dive into financial literacy statistics.
Financial literacy rates over time
Financial literacy rates as measured by the TIAA Institute-GFLEC Personal Finance Index have stayed around 50% since the index was launched in 2017. The average number of questions answered correctly peaked in 2020 at 52%.
2020 was also the year that had the highest percentage of respondents, 20%, answer all 24 questions correctly. In 2024, 16% answered all the questions correctly and another 16% answered between zero and seven right.
A separate study by FINRA found that just 27% of Americans surveyed answered five of their seven financial literacy questions correctly, which is essentially level with what was recorded in 2021. That means that 73% of Americans score below 57% or lower on FINRA’s financial literacy quiz.
Financial literacy by state
Minnesota is the most financially literate state, with 35% of residents there getting at least five of the seven financial literacy questions posed by FINRA correct. Wisconsin, Washington, D.C., Colorado, and Wyoming round out the top five most financially literate states, as measured by FINRA.
The least financially literate states are: Louisiana (18% answering five or more questions correctly), Mississippi (19%), Alabama (20%), West Virginia (21%), and New Mexico (23%).
Financial literacy by gender
Men answered 53% of the TIAA Institute-GFLEC Personal Finance Index financial literacy questions correctly in 2024 while women answered 43% correctly.
The largest differences in the percentage of questions answered correctly by topic were in investing (52% for men compared to 38% for women) and saving (61% to 48%). That’s despite some evidence showing women make better investors than men, although they are less likely to own stocks.
Financial literacy by race
Financial literacy rates vary widely by race. Asian and White Americans answered 54% and 53% of the TIAA Institute-GFLEC Personal Finance Index financial literacy questions correctly compared to 36% of Black Americans and 37% of Hispanic Americans.
The largest financial literacy gaps between those groups are in saving and investing. That reflects the disparity in savings and stock ownership between White and Asian households and Black and Hispanic households.
Financial literacy by generation
Financial literacy rates generally improve with age. Gen Z answered 37% of the TIAA Institute-GFLEC Personal Finance Index financial literacy questions correctly while baby boomers answered 54% correctly.
The largest financial literacy knowledge gaps between Gen Z and baby boomers are in insurance, borrowing, and investing. That’s true when comparing millennials to baby boomers, although the gap in the percentage of questions answered correctly is smaller.
For most Americans, financial literacy is accumulated over time through real world experiences instead of in a high school or college classroom. Events like buying a car or house, or preparing for retirement, which are occurring later in life for many Americans, are instructive learning experiences and core parts of most financial literacy metrics.
Financial literacy by education
Financial literacy rates improve significantly with higher levels of education. Those with a high school degree answered 35% of the TIAA Institute-GFLEC Personal Finance Index financial literacy questions correctly while those with a college degree answered 63% correctly.
Those with higher education may have more exposure to financial concepts which can improve their overall financial literacy. College graduates may also have to contend with student loans and tend to have higher average incomes, which can drive the need for more financial knowledge.
Financial literacy by income
Financial literacy rises steadily with income, suggesting that higher-earning individuals either have more opportunities to learn about personal finance or more incentive to do so. Those earning less than $25K answered just 25% of the TIAA Institute-GFLEC Personal Finance Index questions correctly, compared to 58% for those earning $100K or more.
That 33-point gap that may reflect disparities in access to financial education, resources, or financial decision-making experience.
The cost of financial literacy
Gaps in financial literacy cost Americans an average of $1,015, according to the National Financial Educators Council. That’s close to how much households spend on transportation each month, the second-highest category of spending.
The costs of financial literacy were calculated based on a 2024 survey from the National Financial Educators Council that asked respondents how much money they think they lost in the last year due to a lack of knowledge about personal finances.
How to level up your financial literacy
Financial education can seem daunting, especially given that some states are not required to provide students with financial literacy courses and that financial education curriculum varies significantly among the states that do. If you’re interested in improving your own financial literacy, these are some ways to start:
- Take free online courses: Reliable educational websites offer entry-level classics that will equip you with the basics.
- Follow reputable finance blogs or podcasts for daily tips: Trustworthy sources of information can help you pick up tips during downtime.
- Use budgeting and investing apps to build hands-on skills: Tracking expenses with a budgeting app and building a stock portfolio through a beginner-friendly investing app can teach lessons about money management, investing, and the value of compound growth.
- Read a well-reviewed personal finance book: Plenty of personal finance books offer practical tips and easy-to-understand examples that teach the basics of financial literacy.
- Attend local workshops or webinars hosted by banks or nonprofits: Live or in-person sessions offer valuable opportunities to ask questions and learn from others seeking to build their financial know-how.
Improving your financial literacy doesn’t have to be overwhelming. Starting with a few small, simple steps can go a long way in building confidence with your money.
