Highlights From the FINRA Foundation National Financial Capability Study
Conclusion
Financial Capability in the United States
The 2021 NFCS, conducted against the backdrop of a global pandemic, shows encouraging signs of
improvement in the U.S. adult population's financial capability despite substantial challenges in the labor
market. Rising trends in key measures such as the ability to make ends meet, setting aside emergency funds,
and paying off credit cards appear to have persisted during the COVID-19 pandemic.
Amid these overall gains in financial capability, there are segments that continue to struggle, particularly
younger adults, those with lower income and education levels, Black/African Americans, Hispanic/Latino
Americans, and those who were laid off or furloughed due to COVID-19. In contrast, other groups, such as
those with high financial literacy and those expecting an inheritance, appear relatively advantaged.
As in previous years, the study underscores the importance of financial knowledge in financial capability.
Individuals with high financial literacy are more likely to demonstrate positive financial behaviors such
as saving and planning for retirement, and less likely to engage in negative behaviors such as expensive
borrowing methods.
In sum, the 2021 NFCS portrays a rising tide in financial capability, but also troubling crosscurrents. The COVID
pandemic and its eventual aftermath may prevent many U.S. adults from experiencing smooth financial sailing
for some time to come, and rising inflation and interest rates may create uncertainties not experienced in
this country during the five waves of the NFCS to date. It remains to be seen whether the progress in financial
capability this report describes can be maintained, and for how long.
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