Conference Recap

General Session #3: Americans' Financial Capability: New Evidence and Implications

On July 12, 2016, the Global Financial Literacy Excellence Center hosted the release of the 2015 National Financial Capability Study (NFCS), in collaboration with FINRA Investor Education Foundation. This survey provides new insights into the personal finances of American families, from day-to-day money management to long-run financial planning to managing financial products. The survey also provides a set of questions to measure financial literacy, and a new question has been added to this wave to better understand debt behavior. The most important findings from the survey include:

  • Combining 2009 TNS Global Economic Crisis Study data with 2012 and 2015 NFCS data, we see families are less financially fragile in 2015
  • 38% of Millennials are financially fragile
  • 39% of American women are financially fragile vs. 28% of men
  • 24% of people with income between $50,000 and $100,000 are financially fragile
  • Retirement planning is a strong predictor of wealth

Using the building block approach to promote financial capability, we need to look at balance sheets and address many needs:

  1. First building block: Precautionary savings
  2. Second building block: Planning and taking advantage of tax incentives and employer matches
  3. Third building block: Debt and debt management (e.g., increasing FICO score)
  4. Fourth building block: Higher financial literacy

What can be done to improve financial capability:

  • Financial education in school
  • Financial education in the workplace
  • Financial education in the community (libraries, museums, other places where people go to learn)

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