The NCSL Blog


By Heather Morton

April is Financial Literacy Month.

Financial literacy illustrationFinancial literacy focuses on the specific knowledge and concepts consumers need to manage their money and build wealth, depending on an individual’s situation.

It may mean learning how to create and manage a household budget, learning how to invest money for retirement, or participating in one-on-one coaching and counseling to determine how to buy a house or start a business. It also can be part of an overall strategy to increase economic security for lower-income families.

Financial literacy is one factor in the larger analysis of the financial capability of consumers, which is the broader picture of how consumers manage their resources and how they use their financial literacy to make financial decisions.

A recent survey shows that financial education is not just an issue for children and students; adults struggle to be financially literate, too.

More than 150,000 nationally representative and randomly selected adults in more than 140 economies were interviewed during the 2014 calendar year for the recent Standard & Poor’s Ratings Services Global Financial Literacy Survey.

This survey found that, worldwide, only 1-in-3 adults is financially literate. Denmark and Norway had the highest number of financially literate adults (71 percent). Those nations were followed by:

  • Canada and Israel (68 percent)
  • United Kingdom (67 percent)
  • Germany and the Netherlands (66 percent)
  • Australia (64 percent)
  • Finland (63 percent)
  • New Zealand (61 percent)
  • Singapore (59 percent)
  • Czech Republic (58 percent)
  • Switzerland and the United States (57 percent).

For these economically advanced economies, on average, 56 percent of young adults age 35 or younger are financially literate, compared with 63 percent of those age 35 to 50. However the survey found that financial literacy declines with age. Financial literacy rates are lower for adults older than 50, and lowest among those older than 65.

While the majority of state legislation is focused on increasing financial education for children in K-12, some legislation has focused specifically on adults. In 2016, Virginia legislators enacted S.B. 124, requiring the Department of Corrections to offer prisoners before release the opportunity to participate in a transition program to include advice for job training opportunities, recommendations for living a law-abiding life, and financial literacy information. In 2015, lawmakers in Maine provided ongoing funding to the office of aging and disability services program within the Department of Health and Human Services for the operation of personal financial management assistance programs for senior citizens, to assist older persons with maintaining their financial independence and avoiding financial exploitation.

The same year, Virginia enacted legislation directing the Department of Social Services, in consultation with the Virginia Employment Commission and Virginia Community College System, to develop and implement a plan under which citizens receiving public assistance will be provided information on free financial literacy courses.

Heather Morton is a program principal in Fiscal Affairs. She covers financial services issues for NCSL.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.