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Financial Literacy - In the U.S. and Around the World

, by Rob Kaufman

April is National Financial Literacy Month, which means there's no better time to talk about where the U.S. and other countries rank when it comes to understanding finances. Some of these facts and figures might surprise you (and even scare you), but hopefully knowing them will help ensure that you can keep learning how to best maintain and enhance your financial management techniques.

First Things First - The Bad News about Financial Literacy in the U.S.

According to Financial Literacy Around the World , a Standard and Poor's Rating Services Survey, the U.S. ranks 14th in financial literacy.1

The 5 questions on the survey were answered by consumers all over the world. Here are the percentages of some respondents who received a passing score:

  • 71% - Denmark, Norway, and Sweden

  • 68% - Israel and Canada

  • 57% - United States

Other countries that had a high percentage of passing scores include the U.K, the Netherlands, Germany, Australia, and Finland. New Zealand, Singapore, and the Czech Republic all scored ahead of the United States.

Age also had an impact on results. Millennials in the U.S. and other developed countries had lower financial literacy rates than middle-aged adults. Yet in emerging countries like China, Millennials had higher literacy rates than middle-aged adults.

Overall, these results are not very promising. The survey questions, which revolve around risk diversification, inflation, interest and compound interest are very basic in nature, and one would think the percentage of passing scores would be much higher. So what can be done to help increase those scores?

Now for the Good News

Remember, this is National Financial Literacy Month, a time of year when there's a multitude of events helping to teach Americans how to establish and maintain healthy financial habits. If people take advantage of these resources and put what they learn into practice on a daily basis, the increase in the percentage of people passing this survey could be significant.

Another way to enhance Financial Literacy is through education. When young adults (ages 18-24) were asked what high-school level course would have most benefited their lives, more than half responded with "money management".2  The proof that these people are correct is what happened when Georgia, Idaho, and Texas mandated financial education: after three years of implementing this mandate, all three states saw an increase in credit scores and lower delinquency rates within credit accounts.2  As would also be expected, those who completed an education program on checking, savings, budgeting, and credit felt the difference with improvements in their financial behaviors and confidence.2

As stated before in many FICO blogs and articles, knowledge is power - especially when it comes to finances. The more you learn, the more you know. And, in the end, that could mean a much more secure financial future for you and your family.


  1. Suppose you have some money? Is it safer to put your money into one business or investment, or into multiple businesses or investments?

  2. Suppose over the next ten years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today or more than you can buy today?

  3. Suppose you need to borrow $100. Which is the lower amount to pay back: $105 or $100 plus 3%?

  4. Suppose you put money in the bank for two years and the bank agrees to add 15% per year to your account. Will the bank add more money to your account that second year than it did the first year, or add the same amount of money both years?

  5. Suppose you had $100 in a savings account and the bank adds 10% per year. How much money would you have after five years if you did not remove any? More than $150, exactly $150, or less than $150?


  1. Multiple businesses or investments

  2. The same as you can buy today

  3. $100 plus 3%

  4. More money to your account that second year than it did the first year

  5. More than $150

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Rob Kaufman

Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.