As we approach the New Year, we’d like to take a moment to look back at 2016 from a financial literacy perspective. What progress was made, new research developed, or milestones reached? What still needs to be done?
Overall, the facts reveal that there is still much to be done. The results of the OECD’s (The Organization for Economic Co-operation and Development) international survey of financial literacy revealed that only 60 percent of the nearly 52,000 adult respondents maintain a budget and only 50 percent set financial goals and work to achieve them. Out of a maximum score of 21 – comprised of scores for financial knowledge, attitudes and behavior – the average was a 13.2.
FINRA’s (Financial Industry Regulatory Authority) Investor Education Foundation’s ‘National Financial Capability Study’© revealed similar results, showing that Americans demonstrate relatively low levels of financial literacy and have difficulty applying financial decision-making skills to real life situations. When asked five questions covering aspects of economics and finance encountered in everyday life, 61 percent of respondents in the U.S. were unable to answer more than three of the five questions correctly.
This status check reiterates the need for financial education at a young age. With the continuing need for financial literacy education in mind, below are a few positive milestones from the past year.
- As of 2016, more than 12 million people have used the CFPB’s (Consumer Financial Protection Bureau) ‘Ask CFPB’ to find answers to common questions about money, indicating that people are actively interested in learning how to make sound financial decisions.
- According to FINRA’s 2015 National Financial Capability Study released in 2016, there is evidence of diminished financial stress and improved financial satisfaction over the last three to six years.
Armed with the knowledge that financial literacy is still very much a pressing need, we can continue making progress in the financial literacy space in 2017. If you are looking to get involved and make a difference, check out our financial literacy lesson plan post for some inspiration and ideas.
©2016 FINRA Investor Education Foundation. All rights reserved. Reprinted with permission from the FINRA Investor Education Foundation.