Financial literacy is more than just understanding money – it’s the ability to make informed, confident decisions about earning, spending, and borrowing. It consists of skills, knowledge, and behaviors that support long-term financial well-being. Without financial literacy, navigating everyday choices like budgeting for housing, groceries, transportation, childcare or managing debt AND working toward long-term goals of education, retirement, and/or generational wealth, are impossible.

Despite how essential these skills are, financial literacy remains a significant challenge across the United States. On average, Americans only answer about 48% of financial literacy questions accurately. Younger people score even lower; members of Gen Z only answer about 38% of questions correctly.

Financial literacy is also closely tied to income. National research consistently shows that individuals with lower incomes are significantly less likely to have a strong understanding of basic financial concepts like interest, inflation, and risk. These disparities can start in childhood, with students from higher-income households demonstrating stronger financial knowledge than their peers. Because financial habits and knowledge are often shaped at home, limited access to financial tools, resources, and education can create a cycle where gaps persist across generations. This has real world consequences.

Young adults only learning about money for the first time through trial and error cost themselves an estimated average of $1,015/year in mistakes or missed opportunities. Without access to financial education, families are more likely to experience stress, debt, and barriers to long-term goals.

While financial literacy alone cannot solve the structural causes of poverty, it is a critical piece of the puzzle. When people have access to the tools and knowledge to make informed financial decisions, they are better positioned to build stability, navigate challenges, and create new opportunities for themselves and their families.

At Families Moving Forward, we see financial literacy as a foundational part of building lasting change. Through our educational programming and case management, families gain practical tools like budgeting, credit awareness, and goal setting. We also engage children in learning some of these skills early. Programs like our Kids Store and Decision Dollars create hands-on opportunities for children to practice saving, spending, and prioritizing—helping them build self-reliance and healthy financial habits from a young age.

Ultimately, financial literacy is about empowerment. When families have the knowledge and tools to make informed financial decisions, they gain more than stability; they gain choice, confidence, and the ability to plan for a future they define for themselves.

Take a quick financial literacy quiz to see where you stand: https://www.finra.org/financial_knowledge_quiz

Want to read more about financial literacy? Check out these links:

“Americans Want — and Need — Financial Literacy | American Bankers Association.” Aba.com, 2025, www.aba.com/news-research/analysis-guides/americans-financial-literacy.

Caporal, Jack. “Financial Literacy Statistics: The Average American Scores Just 48%.” The Motley Fool, 9 May 2025, www.fool.com/money/research/financial-literacy-statistics/.

“Financial Literacy Gap | Literacy Ledger.” Literacy Ledger, 2025, www.literacyledger.com/financial-literacy-gap. Accessed 9 Apr. 2026.

connect with us