American Financial Literacy Hits Decade Low as Gen Z Struggles Most

The 2026 TIAA Institute-GFLEC Personal Finance Index found that American financial literacy has reached its lowest level in a decade. On average, Americans correctly answered only 47 percent of the index's 28 questions, a statistically significant decline from the previous year.

The share of adults with very limited financial knowledge rose to 25 percent in 2026, up from 20 percent in 2017. Gen Z showed the most pronounced gaps, averaging only 38 percent correct on the index questions.

The study found that individuals with low financial literacy are three times more likely to be financially fragile and four times more likely to struggle to make ends meet. Researchers said the findings point to a growing segment of the population that lacks the basic knowledge needed to manage debt, save for retirement, or protect against financial scams.

The results come as policymakers at the state and federal level are pushing for expanded financial education. California adopted a Personal Finance Curriculum Guide in March 2026 and will require the course for high school graduation starting with the class of 2030-31. The National Endowment for Financial Education assumed leadership of the National Report Card on High School Financial Literacy in July 2026.

The IRS also issued a proposal in August outlining acceptable investments for Trump Accounts, tax-advantaged savings vehicles for children under 18 that were launched in July 2026. Advocates say these accounts could help build long-term financial habits if paired with education.

Researchers at the University of Chicago and Stanford launched a consortium in June 2026 to study public understanding of 529 education savings plans, with support from the National Endowment for Financial Education.