America’s financial IQ is falling, especially among younger generations

Published on 08/31/2026

America’s financial IQ is falling, especially among younger generations

Kids make plenty of proclamations about how smart they are. But despite their growing confidence, very few kids understand how to balance a budget, compare investment strategies or use a credit card without incurring double-digit interest rates. What’s surprising is that a huge percentage of American adults don’t understand those things either.

Findings from the TIAA Institute’s 2026 Personal Finance Index reveal an alarming lack of basic financial knowledge.

Overall, U.S. adults correctly answered less than half the questions about borrowing, investing, insurance, and risk management. This year’s cumulative score of 47% is the lowest in the project’s 10-year history.

Some takeaways:

Younger Americans scored lower than older generations. Gen Z respondents (those aged 18-29) answered only 38% of the questions correctly, the worst of any age group. Baby boomers (those aged 62-80) scored highest with 54% correct.

This is a problem that is getting worse. The cumulative personal finance scores have steadily decreased in the past five years. And the percentage of Americans with “very low financial literacy” has grown to 25% (from 20% in 2017).

Financial literacy is directly linked to financial well-being. Those scoring “very low” are more than twice as likely to be constrained by debt and four times as likely to lack sufficient savings to cover basic expenses.

The TIAA report states it succinctly: “Unfortunately, results over the decade point to persistently low financial literacy, leaving many Americans at a disadvantage in an increasingly complex personal finance landscape.”

Now for the good news: It’s never been easier to improve your understanding of investing and personal finance.

Anyone with internet access can engage with large language models (LLMs) like ChatGPT (from Open AI), Gemini (from Alphabet) or Claude (from Anthropic). All three have free versions that act as more efficient search engines and provide quick feedback including citations.

The LLMs are a reasonable starting point to ask and get answers to basic financial questions.

The U.S. government also has resources worth exploring. The website Investor.gov, run by the Securities and Exchange Commission (SEC), provides several “investing basics” to help you better understand the fundamentals of the stock market, compound interest, and how to identify investment fraud.

Consumerfinance.gov is another site with bite-sized education about everyday financial topics. Think bank accounts, mortgages, auto loans, credit cards and saving for college.

Speaking of education, it’s criminal that personal finance is not included in the basic curriculum at all American high schools. Sixty percent of college students who graduate with a bachelor’s degree do so in debt. Yet, giving them the tools to manage it responsibly seems to be a low priority.

Marks Group has volunteered many hours to Minnetonka High School’s “Vantage Professional Studies” program with that goal in mind. We can educate others and elevate account values at the same time.

Financial advisers and accountants can of course help fill that gap. Some people prefer to manage their financial lives on their own. Others are more comfortable delegating those decisions to a professional. If you choose the latter, work with an adviser willing to help grow your knowledge along with your portfolio.

If you feel like your financial IQ needs some elevating, know that you’re not alone. The first step is recognizing how much you have left to learn. The next step is doing something about it.

Authors

Ben Marks & Brett Angel

Investment Advice offered through Marks Group Wealth Management, a Registered Investment Advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments and strategies may be appropriate for you, consult with us at Marks Group Wealth Management or another trusted investment adviser. Mention of individual equities in this commentary are for informational purposes only and are not intended to represent a recommendation.

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