A shocking number of Americans and Canadians struggle to master basic financial concepts. According to a recent article published on Yahoo Finance, 57% of Americans failed to score at least 50% on a financial literacy test, with certain groups scoring as low as 37%. Across the border, Canada is also faced with financial literacy challenges, prompting the government to take a proactive stance with its National Financial Literacy Strategy (2021-2026).

The Financial Literacy Crisis in America

The Global Financial Literacy Excellence Center's latest report highlights a concerning trend of financial illiteracy in the U.S. The average American scored only 48% on a financial literacy test, with only 16% of participants scoring between 75% and 100% in 2024. This reflects a significant gap in people’s knowledge about important topics such as managing debt, saving money, and understanding financial risks.

Some of the most concerning findings include:

• Gender gap: Women scored an average of 10 points lower than men.

• Ethnic disparities: Black and Hispanic Americans scored lower than Asian and white Americans.

• Generational gap: Gen Z, the youngest generation, performed the worst, with an average score of 37%.

These results are alarming because they reflect a lack of financial understanding that can lead to serious long-term challenges. Those with lower financial literacy are:

• 3.5 times more likely to be financially fragile.

• 4 times more likely to lack emergency savings.

• 3 times more likely to struggle with retirement planning.

This data from Yahoo Finance reveals the urgent need for increased financial education to address these disparities.

Canada’s National Financial Literacy Strategy

In response to similar challenges, the Financial Consumer Agency of Canada (FCAC) has launched a National Financial Literacy Strategy to improve financial literacy. The five-year strategy (2021-2026) aims to establish a supportive financial framework that empowers Canadians to make financial decisions confidently**.**

Recognizing that financial vulnerability can affect anyone, the strategy outlines key priorities to reduce barriers and improve access to financial education for all Canadians. These include:

• Communicating in ways people understand.

• Building for diverse needs.

• Supporting digital literacy and access.

What Needs to Change?

Both countries face a common challenge of bridging the financial literacy gap. In the U.S., the solution may depend on expanding access to financial education, in schools and the workplace. As for Canada, the National Financial Literacy Strategy offers a structured plan to build resilience, but success will depend on collaboration and ongoing support in financial education initiatives.

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To learn more about Canada’s National Financial Literacy Strategy, check out the official website of the Government of Canada. For information on financial illiteracy in the United States, explore this article from Yahoo Finance.