Posted originally on May 16, 2025 by Martin Armstrong 

Financial literacy is steadily declining in America. The percentage of US adults demonstrating a very low level of financial literacy increased from 20% in 2017 to 25% in 2023.

Around 58% of Americans know about debt and borrowing. Over half (55%) understand saving, and 50% understand consumption. About 42% understand insurance, 44% know about investing, and only 35% know about risk comprehension.

Financial literacy is declining with every generation. Around 53% of the Silent Generation understood finance, followed by 52% of Boomers, 50% of Gen, 45% of Millennials, and 38% of Gen Z. Around 74% of teens admitted that they do not feel confident in their personal finance knowledge, but the good news is that that 73% would like to learn.

There is a drastic difference in knowledge across socio-economic classes, as 75% of American teens are learning about personal finance through their family, with 52% learning a bit at school. An alarming 88% of Americans reported that high school public education did not prepare them for managing their finances. Interestingly, 48% said that they learned about personal finance through social media, which may not be the best reference.

Around 62% of teens said that they learned about savings, 50% were taught about earning, and 44% had some prior information on banking. Only 23% of teens in the US know how to make a budget, but 42% said they were taught how to do so.

This is why we see such a significant difference in financial literacy across socio-economic classes. Only 28% of people earning under $25,000 understand personal finance. That figure rises to 38% for those earning between $25,000 and $49,000, rising once more to 47% for those earning between $50,000 and $99,000. Over 58% of those earning six figures understand personal finance.

The National Financial Educators Council believes that financial illiteracy cost the American public $388 billion in 2023. Americans are facing a private debt crisis. Credit card and household debt have reached record highs and continue to rise. The majority of American households have insufficient emergency savings. The same survey found that 74% of Americans believe they would have made fewer money mistakes if they were properly educated on the subject matter in high school, and 80% believe they would have been more successful if they had that knowledge earlier in life. Politicians believe we should implement countless social programs and simply pay people to exist. America should focus on educating future generations on personal finance as it is perhaps one of the most essential life skills.