Financial Literacy Slides to 10-Year Low in the United States

WASHINGTON, June 2, 2026 — Financial literacy in the United States has fallen to its lowest level in a decade, according to a new study by the TIAA Institute and Stanford University's Global Financial Literacy Excellence Center.

The 2025 survey found that U.S. adults correctly answered only 47% of 28 financial literacy questions, down from 52% in 2020. Researchers also reported growth in the number of people classified as having very low financial literacy. That group now accounts for 25% of adults, compared with 20% ten years ago.

Financial literacy covers knowledge related to budgeting, borrowing, saving, investing, insurance, and retirement planning. Experts warn that a weaker understanding of these subjects can leave households more vulnerable to financial difficulties.

Surya Kolluri, head of the TIAA Institute, noted that individuals with lower financial literacy are four times more likely to struggle with meeting everyday financial obligations.

Generation Gap Emerges in Survey Results

The study revealed substantial differences among demographic groups.

Women answered 44% of the questions correctly, while men achieved an average score of 50%. Generation Z adults between the ages of 18 and 29 recorded the lowest score of any age group, answering only 38% of questions correctly.

Baby boomers posted the highest average score at 54%.

Researchers suggest that age may partly explain the disparity, as younger adults generally have less experience with retirement planning and long-term financial decision-making. Economic challenges faced by younger generations may also play a role. Student debt, housing affordability concerns, and higher living costs can make financial planning more difficult for many young adults.

The findings indicate that financial education gaps persist even as access to information has expanded through digital channels.

Social Media Misinformation Draws Scrutiny

Financial experts point to the explosion of financial content online as one possible factor behind declining literacy levels.

Consumers now encounter an unprecedented volume of advice through social media platforms, podcasts, video channels, and online communities. While many creators provide useful educational content, misleading information can spread just as quickly.

Matt Schulz, chief consumer finance analyst at LendingTree, said many people lack the foundational knowledge needed to separate reliable advice from poor recommendations.

According to Schulz, the challenge today is not finding financial information but determining which sources deserve trust. Individuals who misunderstand basic concepts such as inflation, diversification, or compound interest may be more susceptible to costly mistakes.

Researchers did not identify a single cause behind the decline, though misinformation, economic strain, and weaker educational outcomes remain among the possibilities under discussion.

Basic Money Skills Remain a Growing Concern

The study included questions covering budgeting, investing, debt, insurance, inflation, and probability.

Results revealed notable gaps in understanding. Fewer than half of respondents correctly answered several questions involving purchasing power, expected value calculations, and debt growth. One of the lowest-scoring questions focused on insurance, with only 27% correctly identifying disability insurance as the coverage most likely needed by a healthy 25-year-old worker.

Other questions tested knowledge of diversification, inflation, household budgeting, and compound interest. Many respondents struggled with concepts widely considered essential for making informed financial decisions.

At the same time, some economists argue that consumers face financial products and retirement systems that have become difficult to understand. Critics contend that important information is often buried in lengthy disclosures and technical language, making informed decision-making more challenging.

Despite those concerns, experts maintain that the fundamentals of personal finance remain unchanged. Understanding how to budget, manage debt, account for inflation, evaluate risk, and plan for future expenses continues to play a vital role in financial well-being.

The study's findings suggest that strengthening financial education may be necessary as households confront major decisions involving credit, savings, homeownership, insurance, and retirement planning. With financial information more abundant than ever, a solid grasp of basic money concepts remains an essential skill for consumers of all ages.