The National Capability Study, conducted by the FINRA Investor Education Foundation in 2016, found that most Americans have recovered from the devastating 2008 global financial crisis. Their ability to cover monthly expenses has improved, and many Americans have paid off crippling credit card debts. But the results of the study also underline a growing problem: Nearly two-thirds of Americans can’t pass a basic financial literacy test, and few know how to make even simple interest calculations.
Can you handle a financial emergency?
- The study of more than 27,000 Americans found that the number of people able to pass a five-question test about basic financial concepts fell from 42 percent in 2009 to 37 percent in 2015.
- The study also found that many Americans have used high-cost forms of borrowing, including pawn shops and payday loans.
- While the economic recovery has seen higher overall employment, Americans still don’t have enough emergency cash. Forty-four percent of study participants wouldn't be able to cover a $400 USD emergency.
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More Info: Time magazine
Discussion Comments
What is the five question test?
Income level isn't the problem, either. The problem stems from people not being able to control their spending and living paycheck to paycheck because regardless of how much they make, they spend it all once it falls into their hands.
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