The Cable

The Cable goes inside the foreign policy machine, from Foggy Bottom to Turtle Bay, the White House to Embassy Row.

A New Survey Finds U.S. Citizens Aren’t the Brightest When It Comes to Money

U.S. citizens lag behind their international peers when it comes to understanding money.

GettyImages-459679184
GettyImages-459679184

The United States has the largest economy in the world. Its citizens’ financial literacy doesn’t match up to their country’s fiscal muscle.

According to an S&P survey, the first of its kind, only 57 percent of U.S. citizens are financially literate or have an understanding of basic financial concepts. That ranks Americans 14th in the world, behind the likes of citizens from Australia, Canada, the United Kingdom, Israel, Finland, and Germany.

The survey was conducted by Gallup and analyzed by researchers from the World Bank and the Global Financial Literacy Excellence Center at George Washington University. In polling more than 150,000 adults across 148 countries, the study also revealed a gender gap in the United States of financial understanding.

The United States has the largest economy in the world. Its citizens’ financial literacy doesn’t match up to their country’s fiscal muscle.

According to an S&P survey, the first of its kind, only 57 percent of U.S. citizens are financially literate or have an understanding of basic financial concepts. That ranks Americans 14th in the world, behind the likes of citizens from Australia, Canada, the United Kingdom, Israel, Finland, and Germany.

The survey was conducted by Gallup and analyzed by researchers from the World Bank and the Global Financial Literacy Excellence Center at George Washington University. In polling more than 150,000 adults across 148 countries, the study also revealed a gender gap in the United States of financial understanding.

Around the world, there’s a 5 percent difference in financial literacy between men and women. In the United States, it’s double that, with 62 percent of men testing financially literate, compared to 52 percent of women.

U.S. citizens are also chronic borrowers who don’t understand interest. Some 60 percent of American adults have a credit card. But of those who use credit for purchases, 43 percent don’t understand that interest builds up if the card isn’t paid in full. About a third of Americans who used a loan to purchase a home don’t understand the cost of borrowing either.

If there’s any solace in the survey, U.S. citizens aren’t totally alone in basic misunderstandings on financial matters. Worldwide, two out of three adults have low financial literacy.

Photo credit: Darren Hauck/Getty Images

More from Foreign Policy

A Panzerhaubitze 2000 tank howitzer fires during a mission in Ukraine’s Donetsk region.
A Panzerhaubitze 2000 tank howitzer fires during a mission in Ukraine’s Donetsk region.

Lessons for the Next War

Twelve experts weigh in on how to prevent, deter, and—if necessary—fight the next conflict.

An illustration showing a torn Russian flag and Russian President Vladimir Putin.
An illustration showing a torn Russian flag and Russian President Vladimir Putin.

It’s High Time to Prepare for Russia’s Collapse

Not planning for the possibility of disintegration betrays a dangerous lack of imagination.

An unexploded tail section of a cluster bomb is seen in Ukraine.
An unexploded tail section of a cluster bomb is seen in Ukraine.

Turkey Is Sending Cold War-Era Cluster Bombs to Ukraine

The artillery-fired cluster munitions could be lethal to Russian troops—and Ukrainian civilians.

A joint session of Congress meets to count the Electoral College vote from the 2008 presidential election the House Chamber in the U.S. Capitol  January 8, 2009 in Washington.
A joint session of Congress meets to count the Electoral College vote from the 2008 presidential election the House Chamber in the U.S. Capitol January 8, 2009 in Washington.

Congrats, You’re a Member of Congress. Now Listen Up.

Some brief foreign-policy advice for the newest members of the U.S. legislature.