Global Financial Literacy: The Haves and Have-Nots

A new survey by the S&P organization—the S&P Global FinLit Survey—measured financial literacy across a wide spectrum of countries around the world.  More than 150,000 randomly selected individuals in 140 countries were asked to answer five multiple-choice questions regarding investment diversification, the ability of income to stay on par with spending (or vice versa), interest payments and compounding investment returns.  If individuals could correctly answer three out of the five questions, they were deemed to be financially literate.

So how did we do?  Only 57% of the Americans surveyed were able to correctly answer three out of the five questions.  But as you’ll see from the accompanying chart, that put the U.S. in the upper echelon of nations overall, ranking number 14 behind Finland (#10), Australia (#9), Germany (#8), the Netherlands (#7), the UK (#6), Canada (#5), Israel (#4) and the three top-scoring countries: Sweden, Denmark and Norway—all Scandinavian, which probably means they cheat by actually including financial literacy in their regulator educational curriculum.

Not surprisingly, poorer countries tended to be less financially literate, and the survey found wide discrepancies between adults living in the richest 60% of households in each country vs. those in the poorest 40%.  For instance, the U.S. saw a disparity of 64% literate (wealthiest households) vs. 47% (poorest).  The conclusion: financial ignorance can carry an invisible lifetime cost.

Does that mean that U.S. policymakers will add a financial literacy curriculum to our nation’s high schools, as a way to increase the prosperity of our overall society?  Let’s not hold our breath.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site:

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 


A Global Financial Literacy Test Finds That Just 57% Of Adults In U.S. Are Financially Literate

The first ever Global FinLit Survey finds that just 57% of adults in the U.S. are financially literate — a figure that’s good enough to rank America 14th in the world.

McGraw Hill Financial | Global Financial Literacy Survey

Financial literacy is a critical barrier to financial and economic participation. Because of a lack of knowledge about finance and financial products, many people – especially the poor and women – are not able to access banking and financial services, and are therefore kept out of financial markets.


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