Financial Literacy Survey

Based on an online survey of personal finance knowledge, 40 percent of Americans earn a grade of C or worse. Financially literate people possess a fundamental understanding of money management activities, and are able to apply them for their financial well being.

The Wallet Literacy survey is available to assess your financial literacy. This test covers a wide range of topics, including credit scores, paycheck deductions, emergency funds, car insurance, home buying, inflation, and investment risk. Respondents are encouraged to use a calculator and other resources when taking the survey.

For additional information on the financial literacy survey, click here.

Teaching Suggestions

  • Have students take the financial literacy survey to determine the areas where additional learning is needed.
  • Have students encourage others to take the survey, and then have students talk with them about their results.

Discussion Questions 

  1. What items on the survey are topic areas for which most people need additional learning?
  2. How might people be encouraged to learning more about various personal finance topics?

Fraud Victims Vulnerable to Severe Stress, Anxiety and Depression

The FINRA Investor Education Foundation issued a new research report, Non-Traditional Costs of Financial Fraud, which found that nearly two thirds of self-reported financial fraud victims experienced at least one non-financial cost of fraud to a serious degree—including severe stress, anxiety, difficulty sleeping and depression. While the Stanford Financial Fraud Research Center estimates that $50 billion is lost to financial fraud every year, the FINRA Foundation’s innovative research examines the broader psychological and emotional impact of financial fraud.

“Fraud’s effects linger and cause distress well after the scam is over. For the first time, we have data on the deep toll that fraud exerts on its victims, and the results are sobering. This new research underscores the importance of the FINRA Foundation’s work with an array of national, state and local partners to help Americans avoid fraud, and assist consumers who have been defrauded,” said FINRA Foundation President Gerri Walsh.

The research report found that:

  • nearly two thirds (65 percent) reported experiencing at least one type of non-financial cost to a serious degree; and
  • most commonly cited non-financial costs of fraud are severe stress (50 percent), anxiety (44 percent), difficulty sleeping (38 percent) and depression (35 percent).
  •  Beyond the psychological and emotional costs, nearly half of fraud victims reported incurring indirect financial costs associated with the fraud, such as late fees, legal fees and bounced checks. Twenty-nine percent of respondents reported incurring more than $1,000 in indirect costs, and 9 percent declared bankruptcy as a result of the fraud.

Additionally, nearly half of victims blame themselves for the fraud—an indication of the far-reaching effects of financial fraud on the lives of its victims.

For more information, click here.

Teaching Suggestions

  • Ask students to list a few suggestions to protect themselves from financial fraud.
  • Explain how FINRA can assist consumers who have been the victims of financial fraud.

Discussion Questions

  1. What are a few indirect financial costs associated with funds?
  2. Why nearly half of victims blame themselves for being victims of financial fraud?
  3. How and where should you report financial fraud?

FINRA’s National Financial Capability Study (NFCS)

According to a recent FINRA study, the financial circumstances of Americans have improved over the last several years—driven in large part by an improving economy and job market.  For example, the percentage of survey respondents reporting no difficulty in covering their monthly expenses increased from 36 percent to 48 percent.  This is very significant and 12 percentage point improvement.

However, some groups are still struggling, particularly blacks and Hispanics, those without a high school education, and women.  Here are some sobering statistic: About half of respondents with only a high school diploma or no diploma could not come up with $2,000 in an emergency compared to 18 percent for those with a college degree.

Debt continues to be a problem for many Americans.  More than one-in-five Americans have unpaid medical debt.  Similarly, more than one-in-five Americans with credit cards have been contacted by a debt collection agency in the last year.

In terms of financial literacy, absolute levels are low; only 37 percent of respondents are considered highly financial literate—meaning they could answer four or five basic questions correctly on a five-question financial literacy quiz.  And, financial literacy is down slightly since 2009.

For more information,click here.

Teaching Suggestions

You may want to use the information in this article to

  • Help students understand that many minority groups are still struggling even though economy and job markets have improved.
  • Explain how people can improve their financial lives by saving even a tiny portion of their income for emergencies.

Discussion Questions

  1. What can be done to improve the financial circumstances of minorities?
  2. What might be some reasons that debt continues to be a problem for many Americans?
  3. Since financial literacy levels are so low, what can individuals, local, state and Federal governments can to improve financial literacy of all Americans?