Bridging the Gap: Addressing Disparities in Financial Literacy in America

Ayhana Austin
Jun 18
3 min read

Updated: Aug 26

In today’s fast-paced, financially driven society, understanding money isn’t just a luxury — it's a necessity. Yet, access to financial literacy is far from equal across the United States. Despite its critical importance for personal success and stability, the fundamentals of managing money—like budgeting, saving, investing, and credit—are still not reaching all communities, especially those already facing systemic disadvantages.

The Unequal State of Financial Knowledge

National surveys consistently reveal that financial literacy across the U.S. is generally low. More concerning, however, is the persistent gap in financial knowledge between racial and ethnic groups. A 2018 FINRA study found that, on a basic financial literacy test, White and Asian Americans scored an average of 3.2 out of 6 questions correctly, compared to 2.6 for Hispanic Americans and 2.3 for Black Americans.

Where Americans learn about money is also uneven. Most people gain financial knowledge from five main sources: family, high school, college, employers, and the military. But what happens when none of those sources provide adequate education? In many communities—particularly those with high percentages of students of color or low-income households—these knowledge gaps persist and compound over generations.

Access to Financial Education in Schools

While personal finance classes in schools are on the rise, they are still not universal. According to Next Gen’s Personal Finance 2022 Report, only 22.7% of U.S. high school students were guaranteed to take a standalone personal finance course before graduation. And although this number is increasing—35 states now require a course as of 2024—that still leaves millions of students relying on informal or inconsistent education from the five main sources.

Alarmingly, access to financial education is even more limited in schools serving predominantly Black, Brown, and economically disadvantaged students. Only 1 in 20 students in schools with over 75% Black or Brown students were guaranteed access to a personal finance course. Compare that to 1 in 7 in schools with less than 25% Black or Brown students. A similar disparity exists between schools based on their percentage of students eligible for Free and Reduced Lunch.

These disparities have long-term consequences. Financial knowledge isn’t just about understanding money—it’s about building wealth, avoiding predatory practices, and making empowered decisions. Without it, young people are more likely to fall into debt traps, struggle with credit, or miss out on investment opportunities that could improve their futures.

Why the Gap Persists

One of the biggest challenges in closing the financial literacy gap is misinformation. Many young people learn financial behaviors from family or peers, but if the adults in their lives lack financial knowledge themselves, the cycle of confusion and poor decisions continues. Additionally, predatory practices by loan servicers and credit card companies often target individuals who lack the knowledge to protect themselves, further exacerbating inequality.

Wealth disparities also play a role. Household income is one of the most significant predictors of financial literacy, and due to longstanding racial and economic inequalities, Black and Hispanic Americans often earn less than their White counterparts. Even when controlling for education level, these wealth gaps persist. For example, Black families whose head of household holds a college degree still have less wealth than White families where the head of household didn’t finish high school.

How We Can Close the Gap

Solving these disparities won’t happen overnight, but we can start by ensuring all students—regardless of race, zip code, or income—have access to quality financial education. Expanding guaranteed access to personal finance courses in high schools is essential, especially in underserved communities. Ensuring every student learns how to budget, save, invest, and use credit responsibly should be as fundamental as teaching math or reading.

Another key tool is the National Standards for Personal Financial Education, created by the Jump$tart Coalition and the Council for Economic Education. These standards outline a comprehensive, age-appropriate financial education framework from elementary through high school, covering essential topics like earning income, saving, investing, and managing risk. At 925 Financial, every workshop and program is built using these national standards to ensure high-quality, impactful learning.

Final Thoughts

Financial literacy is more than a life skill — it’s a form of economic justice. Giving all students, especially those from marginalized communities, the tools to understand and control their financial futures is a powerful step toward closing the racial wealth gap. As more states adopt financial education policies and organizations like 925 Financial continue to offer standards-based programs, we move closer to a future where financial knowledge is truly accessible to all.