Every year, the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) release the results from their Personal Finance (P-Fin) Index survey. This survey asks 28 questions to measure how well U.S. adults understand basic financial concepts in areas such as earning, consuming, saving, investing, borrowing and managing debt, insuring, comprehending risk, and identifying go-to information sources.

The 2026 results show that U.S. adults answered 47% of the index’s 28 questions correctly on average, the lowest result in the survey’s 10-year history. This raises some real concerns. People who lack financial literacy are potentially at greater risk of making common money mistakes, such as taking on too much debt, not saving enough, or not building an emergency fund.

A commitment to financial literacy throughout life can help counter these trends. Beyond allowing you to build a healthy relationship with money and support your overall financial wellness, remaining financially literate over time can enhance your financial confidence, reduce your vulnerability to fraud, and position you to reach your long-term goals.

What Is Financial Literacy?

In concise terms, financial literacy is the ability to understand and apply money concepts so you can make informed decisions about earning, spending, saving, investing, borrowing, insurance, taxes, and risk.

At a high level, financial literacy is about understanding key financial concepts and having the ability to put them into practice. This encompasses a wide range of skills, from budgeting, debt management, and making investment decisions aligned with your risk tolerance to saving up for major financial goals such as education, home ownership, and retirement.

Financial literacy can also help you make more informed choices around the frequent financial decisions you will likely need to make throughout your life, such as choosing a credit card, managing student loans, comparing insurance policies, negotiating a car lease, or getting a mortgage.

Staying Financially Literate over Time

Like most educational pursuits, financial literacy isn’t a “once and done” exercise. External factors such as shifting tax rules, economic forces, bull and bear markets, and digital innovation continue to alter the financial landscape. At the same time, personal factors like marriage and divorce, children, aging, or illness can all change the way we relate to and manage money.

This makes it important to maintain financial literacy throughout our lives—and to revisit the skills most relevant to each stage. Here are some strategies to do just that:

Financial Literacy Skills to Revisit Over Time

• Budgeting and cash flow
• Emergency savings
• Debt repayment and credit management
• Investing and risk tolerance
• Insurance and risk management
• Tax planning
• Retirement income planning
• Estate planning, caregiving, and fraud prevention

Get Some Training

Whether you’re a beginner or would like to delve deeper into more complex financial concepts, there are countless educational resources available to you:

• College classes: Many colleges offer courses in personal finance that you can enroll in or audit. Look for community colleges or online programs that are both accessible and affordable. Additionally, take some time to research the programs first to make sure they deliver the education you’re looking for.
• Online courses: The internet is a treasure trove of financial education. Websites like Investopedia, platforms like TEDx, and trusted resources such as FINRA, FDIC Money Smart, the CFPB, and GFLEC feature courses, tools, research, and webinars on various financial topics. Wealth Enhancement also regularly publishes articles and insights and hosts educational events and webinars to share knowledge to help you create financial freedom.
• Subscription services: To stay updated on the latest trends and tips, consider subscribing to financial blogs, newsletters, and podcasts, such as the Your Money Radio Show. Regular exposure to financial content can keep you informed and help you stay on track towards your financial goals.

To remain engaged and motivated to learn, take some time to figure out your learning style. Some people prefer in-person classes or workshops, while others thrive in online settings. Consider audio and video resources like podcasts and webinars if you learn better through listening and watching. Try reading online articles as well as physical or e-books to see which you prefer. The trick is to find what works best for you and stick with it.

Put Your Learnings into Practice

As you gain a greater understanding of financial topics, a great way to solidify your financial literacy is by putting your learnings into practice. Some action steps you can take include:

• Creating a budget to track your income and expenses.
• Building an emergency fund by setting aside three to six months’ worth of living expenses to cover unexpected costs without resorting to credit or loans.
• Developing a debt repayment plan that prioritizes paying off high-interest debt first.
• Taking steps to improve your credit score by paying bills on time, keeping credit card balances low, and opening only necessary credit accounts.
• Setting up savings and investing accounts to meet long-term goals, such as retirement, and reviewing your broader retirement planning strategy over time.
• Protecting your assets with appropriate insurance coverage.
• Reducing financial burden by prioritizing your own financial wellness.

As you embark on this journey, keep in mind that financial literacy is not something you achieve overnight. Be patient with yourself. Review what you’ve learned regularly and don’t be afraid to revisit complex topics. It’s okay to make mistakes as long as you learn from them.

Ask for Help

Learning new skills is rarely a linear process. Fortunately, you don’t have to go it alone. Consider finding a mentor with financial knowledge who can offer guidance, share experiences, and provide accountability as you work towards your financial goals. An experienced financial advisor can also provide you with personalized advice tailored to your specific situation and help with everything from budgeting to retirement planning and tax planning. For more context on how guidance can support ongoing decision-making, see Are Financial Advisors Worth It?

By continuously educating yourself, making informed decisions, and seeking professional advice, you can gain lifelong financial literacy skills to build a stronger financial future.

Frequently Asked Questions About Financial Literacy

1. What is financial literacy?

Financial literacy is the ability to understand and apply key money concepts, including budgeting, saving, investing, borrowing, insurance, taxes, and managing risk.

2. How can adults improve financial literacy?

Adults can improve financial literacy by taking courses, reading trusted financial education resources, listening to financial podcasts, attending webinars, and putting concepts into practice through budgeting, saving, debt repayment, and long-term planning.

3. What are the main components of financial literacy?

The main components of financial literacy include earning, consuming, saving, investing, borrowing and managing debt, insuring, understanding risk, and knowing where to find trusted financial information.

4. How do I know if I’m financially literate?

You may be financially literate if you can create and follow a budget, manage debt responsibly, maintain emergency savings, understand basic investing concepts, compare financial products, protect yourself with insurance, and make informed decisions tied to your goals.

5. Why is financial literacy important throughout life?

Financial literacy matters throughout life because your financial decisions change as your circumstances change. Early career decisions may focus on budgeting and debt, while later-life decisions may involve retirement income, healthcare costs, taxes, caregiving, and legacy planning.

6. How often should I revisit my financial plan?

It’s generally wise to revisit your financial plan at least once a year and whenever you experience a major life change, such as marriage, divorce, a new child, a job change, retirement, illness, or caregiving responsibilities.

7. What financial literacy skills are most important before retirement?

Before retirement, it’s important to understand retirement income planning, Social Security timing, Medicare, tax-efficient withdrawals, investment risk, healthcare costs, estate planning, and the impact of inflation on long-term spending.

8. When should I ask a financial advisor for help?

Consider asking a financial advisor for help when your financial life becomes more complex, when you are preparing for a major transition, or when you want personalized guidance on investing, tax planning, retirement income, estate planning, or long-term financial goals.

Get started today by contacting a Wealth Enhancement advisor.

Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor and affiliate of Wealth Enhancement Group®. Wealth Enhancement Group is a registered trademark of Wealth Enhancement Group, LLC.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

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