A surprising number of Americans still struggle with everyday money decisions— from budgeting and understanding interest to planning for retirement. In fact, recent studies show that most adults miss basic financial questions, and the gaps vary widely by age.
In this article, we’ll take a closer look at the current state of financial literacy in the U.S., compare how different age groups perform, and explore what’s driving these trends in 2025. If you’re curious about where the biggest knowledge gaps are and what can help close them, this is for you.
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Financial Literacy in America Today
Despite having more access to tools and information than ever before, financial literacy in the U.S. has barely improved. Many adults still struggle with the basics and often lack the confidence to make informed financial choices.
Here’s what recent data reveal about how these knowledge gaps show up in everyday life:
National Averages and What They Mean for Everyday Americans
As of 2025, the TIAA Institute–GFLEC P-Fin Index shows that U.S. adults correctly answer just 49 percent of basic financial questions—roughly the same level as in 2017. A separate WalletHub survey found that 47 percent of Americans grade their own money skills at “C” or below, suggesting that low confidence often goes hand-in-hand with low scores.
Source: TIAA Institute-GFLEC Personal Finance Index, as cited by World Economic Forum (2024)
These figures suggest that many Americans struggle with everyday financial decisions—such as comparing loan rates, building an emergency fund, or planning for retirement. Over time, these challenges can add up, leading to avoidable fees, high interest charges, and missed opportunities for long-term growth.
Why Low Literacy Costs More Than You Think
Financial illiteracy can have a real impact on household budgets. According to a 2024 survey by the National Financial Educators Council, Americans:
✅ May lose an average of $1,015 per person each year due to gaps in money knowledge
✅ Could incur a collective cost exceeding $243 billion annually
📝 Note: These losses often stem from common issues like overdraft fees, high-interest borrowing, under-saving for important goals, and late payments. It’s a clear reminder of why stronger financial education could make a meaningful difference.
Financial Knowledge by Age Group
Financial literacy still varies widely by age. Based on the 2025 P-Fin Index survey, here’s how different generations performed:
Financial Literacy By Generation
Source: 2025 TIAA Institute-GFLEC Personal Finance Index
✅ Gen Z (ages 18–29): averaged 38 percent correct. This group had the lowest scores overall, and about 37 percent answered seven or fewer questions correctly.
✅ Millennials (ages 29–44): averaged 46 percent. That’s a slight improvement, but many still missed nearly half of the questions.
✅ Gen X (ages 45–60): scored 51 percent on average. They’re slightly ahead of the national average.
✅ Boomers and older adults (ages 61+): They had the highest average at 55 percent, though that still means nearly half the questions were missed.
📝 Note: Results are from a January 2025 national survey of over 3,000 adults conducted by the TIAA Institute and GFLEC.
What These Numbers Show
Even as people age, financial knowledge doesn’t always improve quickly. Gaps tend to shrink over time, but they don’t disappear. And no generation is scoring near perfect.
✅ Most adults still get about half of financial questions wrong.
✅ Financial literacy tends to build slowly and not everyone has equal access to resources.
✅ Education—whether through schools, workplaces, or trusted tools—takes ongoing effort.
Everyone learns differently, and what works for one group may not suit another. Still, access to the right information at the right time can make a meaningful difference.
Gaps by Race, Gender, and State
Financial literacy scores also differ by race, gender, and location—reflecting long-standing differences in access, education, and opportunity.
- Black adults answer around 34 percent of questions correctly on average.
- Hispanic adults score slightly higher at 38 percent.
- White and Asian adults tend to perform better, typically answering over 50 percent correctly. The difference between groups can be as wide as 15 points, highlighting persistent disparities in financial education and exposure.
- Men generally score 56 percent on average.
- Women lag by about 10 points, and nearly 1 in 5 women score below 25 percent compared to 1 in 7 men.
✅ By State
- Minnesota ranks high, with an average score of 73 out of 100.
- Arkansas falls toward the bottom at 53.
That almost 20-point gap between Minnesota and Arkansas likely reflects differences in state policies, school-level personal finance requirements, and local economic conditions. For instance, Minnesota requires K–12 financial education, which may help explain its stronger results.
What’s Driving the Trends in 2025
There’s no single reason for the shifts we’re seeing in financial literacy—but several factors are shaping the numbers in 2025.
✅ More Schools Are Teaching It
Today, 27 states require students to take a personal finance course to graduate which is three times more than in 2020. The biggest gains seem to show up in schools that serve low-income communities.
✅ Inflation Is Getting People’s Attention
More than half of U.S. adults say inflation is their biggest financial concern this year. That worry is pushing many to take budgeting and saving more seriously.
✅ Budgeting Apps and Online Tools
About 45 percent of Americans use some kind of tool to manage their money. Some prefer simple spreadsheets, while others turn to dedicated apps to track spending and goals.
✅ Social Media Is a Learning Source
Nearly 70 percent of Gen Z adults turn to TikTok or YouTube to learn about money. Some of that advice may be helpful—but quality and accuracy can vary a lot.
✅ Economic Stress Is Fueling Self-Education
With talk of a recession still in the air, 77 percent of adults say they’ve changed their spending habits, and nearly a third are actively working to improve their financial knowledge.
✅ Free Help Is Still Out There
The IRS continues to publish Publication 17, a free resource with plain-language tips on taxes and financial basics. It’s still a go-to for many during tax season.
Together, these changes suggest that while the gaps persist, more people are actively trying to improve how they manage their money.
Key Takeaways
Financial literacy in the U.S. still shows wide gaps across age, race, gender, and geography. While average scores remain modest, 2025 data suggest more people are becoming aware of the importance of money skills, especially in response to inflation and economic uncertainty.
Education mandates, digital tools, and self-directed learning are starting to play a bigger role, though access and quality still vary.
Here are some quick tips to improve financial literacy:
✅ Start with trusted, free resources like IRS Publication 17
✅ Use budgeting apps or simple spreadsheets to track income and expenses
✅ Follow credible financial educators online—and verify their credentials
✅ Check if your employer or community center offer free workshops
✅ Practice reading everyday financial documents (e.g., pay stubs, bank statements, loan terms)
Improving financial knowledge takes time, but small, consistent steps may make a meaningful difference.
📌 Want to keep learning? Explore our other articles on saving, investing, retirement, and building long-term financial habits.
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