NFCS: New Findings Indicate that Financial Education Works

Editorial note: We recognize other organizations use different definitions for financial capability. NEFE defines financial capability as comprised of knowledge and access, but does not extend to actions and outcomes as in this study.

New evidence links financial education to financially capable behaviors, according to the most recent wave of the National Financial Capability Study (NFCS).

The 2018 data, released in June 2019, conclude that “both the amount and quality of financial education correlate positively with behaviors indicative of financial capability.”1 The study data show that those who receive more hours of high-quality financial education programming are “more likely to save and less likely to overdraw their checking accounts, engage in fee-generating credit card behaviors, or use non-bank borrowing methods.”2

Since 2012, the study has asked whether or not respondents had financial education available to them and whether or not they participated. The 2018 study added new questions to probe respondents to report on the amount and quality of that financial education.

“The results of these new questions, coupled with the behavioral data in the study, illuminate what we at NEFE already know: Financial education works,” says Billy Hensley, Ph.D., NEFE president and CEO.

This wave revealed that of those who had received some form of financial education, 12 percent had one to two hours, 25 percent had three to 10 hours and 54 percent had at least 10 hours of exposure. Fully three-quarters of respondents rated the quality of that education “high.”

“This is good news for our field,” says Katherine Sauer, Ph.D., NEFE vice president of research and programs. “Quality and duration data give us a more nuanced understanding about that financial education.”

Study Background

The NFCS is a large-scale, multiyear project conducted by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation since 2009. It aims to benchmark key indicators of financial capability and evaluate how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics. In each wave, the study deepens exploration of timely, critical topics, while maintaining consistent measures to track comparisons over time.

The study draws from a sample of over 25,000 American respondents. This large dataset allows researchers not only to study financial capability among the entire population, but also to slice the data in different ways to provide detailed studies on population subgroups. State-by-state analysis is reported as well.

To learn more about the study visit:

1 “The State of U.S. Financial Capability: The 2018 National Financial Capability Study,” FINRA Investor Education Foundation, June, 2019, p. 2.

2 Ibid, p. 2.

Back to Top

Join us for our 2nd Financial Education Innovation and Impact Summit in Denver, Oct. 8-10

More Info