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The State Of US Financial Capability

Evidence type: Insight i


Despite general trends in declining unemployment and economic growth in the United States, there are well-documented signs of persistent and broadening divisions between people who are prospering under the Trump administration, and those who are struggling financially. The groups that are particularly vulnerable include younger Americans, those without college degrees, African-Americans and those on lower incomes. Understanding and acting upon these inequalities, and addressing the shortfalls in people’s financial capability is seen as increasingly important by a growing number of national governments.

The study:

This 2019 report from the Financial Industry Regulatory Authority (FINRA) uses their National Financial Capability Study (NFCS) to measure and understand perceptions, attitudes, knowledge and behaviours pertaining to financial capability. The latest edition represents the fourth wave of the NFCS. While it has been updated to include new questions on contemporary issues, it has retained key measures to allow for changes across time to be captured.

The main research objectives of the NFCS were to benchmark key indicators of financial capability, and to evaluate how these indicators vary in relation to underlying demographic, behavioural, attitudinal and financial literacy characteristics. This fourth wave follows previous editions in 2009, 2012, and 2015. It includes:

  • A ‘state-by-state’ online survey of 27,091 American adults, with approximately 500 in each of the 50 states plus the District of Colombia. The sample was selected using non-probability quota sampling, with participants offered incentives for their participation in the online survey. This element is a repeat of the 2015 study.
  • An investor study, which is an online survey of 2,003 Americans who have investments outside of their retirement accounts. Participants for this survey were chosen from the state-by-state online survey.

The surveys were commissioned by FINRA, and conducted by ARC Research between June and October 2018. Data from the surveys is weighted to be representative of the national population in terms of age, gender, ethnicity, education and census division.

Key findings:

  • Unlike in previous surveys, the financial capability, stability and confidence of Americans is no longer improving in step with the economy. The report suggests they have settled into a ‘static financial state’.
  • There are persistent or widening divides between those struggling financially and those who are ‘prospering’, despite a period of economic growth.
  • While all demographic groups have improved compared to 2009 in relation to being able to cover their monthly expenses and bills, younger Americans, those on low incomes and African Americans have improved less than older Americans, those on high incomes and other ethnicities.
  • The percentage of white Americans who spend less than they earn has remained steady since the first survey in 2009, contrasted by a drop of 6% among African Americans.
  • More than half of all Americans (53%) stated that thinking about their finances made them anxious. The highest levels of financially related stress and anxiety were among those aged 18-34.
  • Single women (61%) were more likely than single men (52%) to feel anxious or stressed about their finances.
  • More than two-in-five (42%) student loan holders had been late with a repayment at least once in the previous year. Almost half (47%) of student loan holders wish they had chosen cheaper colleges, while a similar percentage (48%) were concerned that they would not be able to pay off their student debt.
  • Three-in-ten Americans (29%) on low incomes (less than US$25,000) still reported being able to save some of their income.
  • The amount and quality of financial education received correlated positively with financially capable behaviours.
  • Almost two-in-five Americans (39%) used websites or apps to manage their finances, while a third (35%) used their mobile phones to make payments for retail transactions.
  • Nearly a third (32%) of employed Americans earned money from work outside their main employment in the past year. One in six Americans (17%) have taken on a work assignment through a website or app such as Uber, TaskRabbit, Care.com, and other gig economy tools. Among self-employed respondents, this number increases to 27%.
  • The report concludes by stating that a growing economy is not sufficient to improve people’s financial situations, and that widespread access to, and comfort with, basic financial knowledge is essential.

Points to consider:

Methodological strengths and limitations:

  • The authors note that while the survey data is weighted to be nationally representative, breakdowns of sub-populations may not necessarily be representative (due to the numbers sampled).
  • The dataset may have introduced an element of bias by offering incentives to participants. However, this is a common method employed by research agencies to achieve their sampling quotas.
  • Overall, the survey methods appear robust so we can be fairly confident that the results are at least broadly representative of general patterns of financial capability in the United States.


  • This report is of clear interest to government, policymakers and other stakeholders with an interest in measuring and analysing levels of financial capability, particularly within a US context.

Generalisability/ transferability:

  • While these findings are drawn from the US population, many of the learning outcomes may be transferrable to a UK context.

Key info

Year of publication
Contact information

Judy T. Lin, Christopher Bumcrot, Tippy UlicnyARC Research, an SVC Company

Gary Mottola, Gerri Walsh, Robert Ganem, Christine Kieffer


Annamaria Lusardi, George Washington University