Broker Check

Financial Capability in the United States: How Do You Stack Up?

January 12, 2017

The FINRA Investor Education Foundation set out to determine how skilled Americans are at managing their financial lives. Details of their research are shared in this article.

Managing one's personal finances is a complex task that requires focus, judgment, and discipline. There are budgets to maintain, various types of debt to manage, long-term goals to plan for, savings and investments to select and oversee. And in today's uncertain economic environment, keeping all of these components on an even keel takes more than a little skill.

To measure how well Americans are coping with their financial responsibilities, the FINRA Investor Education Foundation sponsors the National Financial Capability Study (NFCS), a multi-year research project first commissioned in 2009, again in 2012, and most recently in 2015, the results of which were published in July 2016.

The NFCS focuses on four key components of financial capability: Making ends meet, planning ahead, managing financial products, and financial knowledge and decision-making. Drawing on responses from more than 27,000 American adults from all 50 states and the District of Columbia, the NFCS is one of the largest and most comprehensive financial capability studies in the country.

Key Findings

On many fronts, the financial situation of Americans has improved over the past several years. For instance, when asked about their comfort level with covering expenses and paying bills, nearly half of the respondents - 48% - said they "find it not at all difficult," compared with 40% in 2012 and 36% in 2009. Similar improved responses - 46%, 40%, and 35% respectively - were tallied when survey participants were asked if they had set aside three months’ worth of expenses in an emergency fund. While still improving, fewer numbers of respondents - 31%, 24%, and 16% - claimed to be satisfied with their overall financial condition.

Demographic Breakdown

When analyzed through a demographic filter, certain groups face heightened struggles in specific areas: 1

Have been late with mortgage payments …

Millenials (ages 18-34)29%
Generation-X (ages 35-54)16%
Baby boomers (55+)7%

In case of emergency, probably/certainly could not come up with $2,000 in 30 days …

High school education or less45%
Some college36%
College or more18%

Have difficulty with medical costs …


Debt: A Widespread Problem

Overall, debt continues to be a problem for many Americans. 1
●    40% feel they are carrying too much debt.
●    20% have unpaid medical bills.
●    47% of credit card holders carry a balance.
●    22% of credit card holders have been contacted by a collection agency in the past year

Financial Literacy: On Shaky Ground

The 2015 NFCS revealed a deterioration in general financial knowledge among survey participants over previous years. The percentage of individuals considered to have a high level of financial literacy -- meaning they answered four or more questions on a five-question quiz correctly -- has declined steadily since the study's inception. In 2009, 42% of participants answered at least four questions correctly. That percentage dropped to 39% in 2012 and 37% in 2015. 1

Commenting on the findings, FINRA Foundation Chairman Richard Ketchum said, "This research underscores the critical need for innovative strategies to equip consumers with the tools and education required to effectively manage their financial lives." 2

For more on the study or for a state-by-state breakdown of results go to


1 FINRA Investor Education Foundation, infographic, "Financial Capability in the United States 2016," July 12, 2016.

2 FINRA Investor Education Foundation, news release, “Americans’ Financial Capability Growing Stronger, but Not for All Groups: FINRA Foundation Study,” July 12, 2016.

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