Login | September 18, 2025
Financial struggles and financial knowledge
JULIE JASON
The Discerning Investor
Published: September 18, 2025
The final version of the 2024 National Financial Capability Study was recently released by FINRA's Investor Education Foundation (tinyurl.com/y656ja3d).
I had written about an initial release from the study in April -- mainly that there had not been improvement from previous results in 2021 when it came to correctly answering seven questions in FINRA's Financial Knowledge Quiz. (If you want a copy of that column, write to me at readers@juliejason.com.)
The full study, which surveyed more than 28,000 U.S. adults, points out another concern -- many of us have had struggles in managing our financial issues.
Before I go into the statistics, it might be helpful to understand how "financial capability" is defined. Gerri Walsh, the president of the FINRA Foundation, offered an explanation in a FINRA Unscripted podcast, saying, "It measures attitudes, behaviors, beliefs, experience, and then of course also knowledge. And we measure it along four pillars: making ends meet, planning ahead, managing financial products and financial knowledge" (tinyurl.com/kr443cnt).
For the first time in the study (which began in 2009 and is conducted every three years), the percentage of people who said they had no difficulty covering monthly expenses and bills declined, in this case to 44% from 54% in 2021. Additionally, those who said they were spending more than their income climbed from 19% in 2021 to 26% in 2024.
What caused the change? FINRA senior researcher Olivia Valdes told the FINRA podcast that the difficulty in making ends meet "seems to be driven by inflation."
When it came to food, 67% said increased costs had caused them to cut back on other spending. Also, 50% said an increase in housing costs had them cutting back on spending.
Credit cards also were a factor. Seventy-nine percent had at least one credit card (a consistent number through the years of the survey). However, those who paid their credit cards in full each month declined to 53% in 2024 from a survey high of 59% in 2021. Also, those carrying credit card debt grew to 38% in 2024 from 33% in 2021, while other debt -- things like a mortgage, or an auto or student loan -- remained mostly unchanged.
Not surprisingly, saving for emergencies was also under stress. Those who had a "rainy day fund" -- money to cover three months' worth of expenses in case of sickness, job loss or other emergencies -- was at 46%, a decline of 7 percentage points from 2021.
It's no wonder that only 24% of respondents said they were satisfied with their current personal financial condition, down from 33% in 2021.
Given the financial challenges, how would you view your ability to make ends meet? You would probably set a budget, look to make changes in your spending habits, save where you can -- and try to grow your financial knowledge as well.
The study noted that 71% of U.S. adults rated themselves positively as far as how good they were at dealing with day-to-day financial matters such as managing checking accounts and credit cards. However, of the 36% of respondents who gave themselves the highest score, 31% engaged in costly credit card behaviors, 20% used non-bank borrowing methods (pawn shops, "payday" loans) and 13% overdrew their checking accounts.
At the end, it comes back to financial knowledge. As FINRA Foundation Research Director Gary Mottola said on the podcast about the NCFS findings related to people's self-assessments versus objectively measured knowledge, "There's a potential that there's a fairly large swath of the U.S. population [that] is a little overconfident with their financial knowledge."
And that's why the mission for financial literacy education continues.
On another note, last week's column mentioned "Federal regulators such as the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) watch out for investors." It should have read "Federal entities," as FINRA works under the supervision of the SEC but is not part of the government.
And speaking of financial knowledge, time is running out to compete for the 401(k) Champion contest for 401(k) participants who "love" their 401(k)s. Don't forget to enter. The deadline is this Wednesday, Aug. 27. See 401kchampion.com for details.
Seasoned investment counsel (tinyurl.com/52nus8hz) and award-winning columnist and author, Julie Jason, JD, LLM, promotes financial literacy and investor protection. Read her latest book, "The Discerning Investor: Personal Portfolio Management in Retirement for Lawyers (and Their Clients)" (tinyurl.com/4u7h9pjs), published by the American Bar Association. Write to Julie at readers@juliejason.com. While all questions cannot be answered, each email is read and reviewed and can lead to discussion in a future column.
COPYRIGHT 2025 Julie Jason, DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION, 1130 Walnut St., Kansas City, MO 64106; 816-581-7500.