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US Financial Literacy market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Financial Literacy market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This Report includes information on:

  • The state of financial literacy in the US
  • What financial institutions and the government are doing to improve financial literacy, and what opportunities remain to be addressed.
  • How consumers view their own knowledge of financial concepts, and what are the major obstacles standing in the way of financial literacy.

Expert analysis from a specialist in the field

Written by Chris Shadle, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Financial illiteracy is a critical barrier to financial inclusion—though certainly not the only one. But due of a lack of knowledge about finance and financial products, many consumers find themselves unable to access banking and other financial services, and are either kept out of financial markets, or exposed to often-predatory business practices. Financial literacy is therefore highly important to an individual’s financial well-being, as well as to the overall health of the economy. Chris Shadle
Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Most consumers are still neglecting basic financial hygiene
              • Figure 1: Financial habits and behaviors, by generation, March 2018
              • Figure 2: Financial habits and behaviors, by generation, March 2018
            • Family is the is the most common source of financial knowledge
              • Figure 3: Sources of personal finance knowledge, ranked, March 2018
            • The opportunities
              • Financial literacy is not being taught enough, although the future is looking brighter
                • Figure 4: Sources of personal finance knowledge, any rank, March 2018
              • Men are more financially confident than women
                • Figure 5: Self-assessed personal finance grade, by gender, March 2018
              • What it means
              • The Market – What You Need to Know

                • Financial literacy is difficult to define
                  • The US lags behind world leaders in financial literacy, at #14
                    • Only 5 states received an A in a national financial literacy assessment
                    • Market Factors

                      • What is financial literacy?
                        • The US lags behind world leaders in financial literacy, at #14
                          • Figure 6: Most and least financially literate countries, November 2015
                        • Population by grades and state percentages
                          • Figure 7: US high school financial literacy report, percent of public high school population, by grade, 2017
                        • Median household income
                          • Figure 8: Real median household income, by race and Hispanic origin, 1967-2016
                        • Personal savings rate
                          • Figure 9: Personal savings rate percentage, monthly, seasonally adjusted annual rate, January 1980-January 2018
                      • Key Players – What You Need to Know

                        • April is Financial Literacy month
                          • Personal financial management tools
                            • Ally Bank strives to bring financial literacy to the nation’s youth
                            • What’s Working?

                              • Champlain College: case study in financial literacy education
                                • April is Financial Literacy month
                                  • Figure 10: Wells Fargo statement insert, July 2017
                                  • Figure 11: Allstate email campaign, April 2018
                                • Mint
                                  • Figure 12: Mint email campaign, January 2018
                                • Robo-advisors and the passive investment revolution
                                  • Figure 13: Betterment online advertisements, April 2018
                                  • Figure 14: Robo-advisors vs human advisors, November 2016
                              • What’s Struggling?

                                • Too many cooks in the kitchen?
                                  • National Endowment for Financial Education
                                    • Financial Literacy and Education Commission
                                      • Understanding the issue – A confusion in terms
                                        • Many consumers are not confident in their retirement savings
                                          • Figure 15: Confidence in amount saved for retirement, September 2017
                                      • What’s Next?

                                        • Ally Bank’s financial literacy initiatives
                                          • Figure 16: Ally Bank email campaign, April 2017
                                          • Figure 17: Fifth Third Bank email campaign, July 2017
                                        • MasterCard tries its hand at podcasting
                                          • Umpqua Bank offers BFF – “Best Financial Friend”
                                            • Personal financial management services
                                              • Goldman Sachs – Marcus + Clarity
                                                • Bank of America | Erica
                                                  • Figure 18: Bank of America email, March 2018
                                                • FINN by Chase
                                                • The Consumer – What You Need to Know

                                                  • Most consumers rank their financial knowledge as above average
                                                    • Men are more confident in personal finance than women
                                                      • Consumers learn the most from family and the internet
                                                        • Consumers frequently neglect basic financial habits
                                                          • Consumer demand notwithstanding, most have no meaningful financial education
                                                          • Self-assessed Personal Finance Grade

                                                            • Most consumers view their financial knowledge as above average
                                                              • Figure 19: Self-assessed financial grade, March 2018
                                                              • Figure 20: Opinion of current financial situation, October 2017
                                                            • Confidence in personal finance rises with age…
                                                              • Figure 21: Self-assessed financial grade, by generation, March 2018
                                                            • …and income
                                                              • Figure 22: Self-assessed financial grade, by household income, March 2018
                                                          • Differences among Gender and Race

                                                            • Men are more confident than women in their financial knowledge
                                                              • Figure 23: Self-assessed personal finance grade, by gender, March 2018
                                                            • Men are also more confident in their financial performance
                                                              • Figure 24: Attitude toward financial services (% agree), by gender, March 2018
                                                            • Racial divide
                                                              • Figure 25: Self-assessed personal finance grade, by race and ethnicity, March 2018
                                                          • Sources of Financial Literacy

                                                            • Family is the most-cited source of personal finance knowledge
                                                              • Figure 26: Sources of personal finance knowledge, any rank, March 2018
                                                              • Figure 27: Sources of personal finance knowledge, ranked, March 2018
                                                            • Younger consumers are even more reliant on family as a resource
                                                              • Figure 28: Sources of personal finance knowledge, any rank, by generation, March 2018
                                                            • The most financially literate consumers look beyond the family
                                                              • Figure 29: Ranking family in the top three sources of personal finance knowledge, by self-assessed financial grade, March 2018
                                                              • Figure 30: Sources of personal finance knowledge, any rank, by self-assessed grades, March 2018
                                                            • Most consumers have not received valuable formal financial education…
                                                              • Figure 31: Sources of personal finance knowledge, ranked, March 2018
                                                            • …although younger consumers are learning more in school
                                                              • Figure 32: Sources of personal finance knowledge, any rank, March 2018
                                                          • Personal Finance Behaviors and Attitudes

                                                            • Most consumers do not follow a monthly budget…
                                                              • Figure 33: Financial habits and behaviors, by generation, March 2018
                                                            • …and fewer still utilize a personal financial management tool or see an advisor
                                                              • Figure 34: Financial habits and behaviors, by generation, March 2018
                                                              • Figure 35: Mint email campaign, April 2018
                                                            • Self-assessed letter grade highly correlated with responsible behavior
                                                              • Figure 36: Financial habits and behaviors, by self-assessed letter grade, March 2018
                                                            • The most financially confident consumers have healthier attitudes toward money
                                                              • Figure 37: Attitudes toward personal finance, by self-assessed financial letter grade, March 2018
                                                            • Parents are saving for retirement, but struggling more in the present
                                                              • Figure 38: Financial habits and behaviors (select), by parental status, March 2018
                                                            • Younger consumers have more uncertainty
                                                              • Figure 39: Attitudes toward personal finance, by generation, March 2018
                                                          • Interest in Financial Education

                                                            • TURF analysis – Consumers are receptive to seminars and workshops
                                                              • Figure 40: TURF analysis – Interest in financial education opportunities, March 2018
                                                              • Figure 41: Merrill Lynch email campaign, March 2018
                                                              • Figure 42: Charles Schwab email campaign, March 2018
                                                            • Consumers prefer to talk to a person
                                                              • Figure 43: Preference for talking to bank employee (% agree), by generation, November 2017
                                                          • Appendix – Data Sources and Abbreviations

                                                            • Consumer survey data
                                                              • Direct marketing creative
                                                                • Abbreviations and terms
                                                                  • Abbreviations
                                                                  • Appendix – The Market

                                                                      • Figure 44: US high school financial literacy report, state breakdown by grade, 2017