New insights from the Personal Finance (P-Fin) Index
Financial literacy varies across demographic groups among African Americans (Figure 4). Observed variations in the average percentage of P-Fin Index questions answered correctly are consistent with those identified among the U.S. adult population as a whole.8
- Financial literacy is significantly higher among men. There is a seven percentage point difference between African American men and women in the percentage of index questions answered correctly.
- Personal finance knowledge tends to increase with age. One-third of index questions are answered correctly on average among African Americans under age 45, compared to 43% among those ages 45 and older.
- Personal finance knowledge tends to be greater among those with higher household incomes. There is a 29 percentage point difference in P-Fin Index questions answered correctly between African Americans with household incomes below $25,000 and those with household incomes of $100,000 or more.
- Financial literacy varies with employment status. In particular, unemployed or disabled9 African Americans have markedly less personal finance knowledge than those employed10 and those retired.