Empowering Adults to Make the Most of Their Money: Focus on Financial Literacy in Adult Education 

Prepared for the National Coalition for Literacy for AEFL Week 2026
By Deborah Kennedy, Senior Consultant, Key Words and Former Executive Director, National Coalition for Literacy

Financial literacy is essential for everyone, but it is especially important for adults with low literacy who struggle to make ends meet for themselves and their families. Adult education programs develop foundational skills in the context of practical knowledge for everyday life, including career readiness, health literacy, citizenship, and financial literacy. These programs combine financial literacy with development of essential reading and numeracy skills in a pragmatic approach that allows adult learners to obtain the knowledge necessary for financial self-sufficiency. 

Understanding Financial Literacy 

Definitions of financial literacy vary across sources, but most align with the description provided by Investopedia: Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. 

The federal Financial Literacy and Education Commission outlines five building blocks for managing and growing your money: 

• Earn – Make the most of income by understanding pay and benefits.
• Save & Invest – Save for future goals such as a house or retirement. 
• Protect – Accumulate emergency savings and have the right insurance. 
• Spend – Compare prices and products for the best value.
• Borrow – Borrowing money can enable essential purchases and builds credit, but be mindful of high interest costs

Overall, financial literacy can be understood as knowing how financial systems work, money-related attitudes and behaviors, and access to financial services.  

Research consistently raises concerns about the low level of financial literacy among U.S. adults. Over the last decade, The TIAA Institute and Stanford’s Global Financial Literacy Excellence Center (GFLEC) has conducted an annual survey to measure financial knowledge among Americans through the Personal Finance Index (P-Fin Index), and results point to “persistently low financial literacy” in topics that matter for everyday personal finances. Each year, the P-Fin index covers questions about earning, buying, saving, investing, insuring, risk, borrowing and managing debt, among other areas. The TIAA-GFLEC 2026 report notes that U.S. adults answered only about one-half of the 28 index questions correctly, with comprehending risk as the weakest knowledge area. According to the survey, the average number of questions answered correctly declined in 2026, and the share of adults with very low financial literacy rose. 

The FINRA Foundation’s National Financial Capability Study (NFCS) reports similar trends among U.S. adults. Every three years, insights on financial capability are presented in an interactive state-by-state map, examining indicators of financial literacy, including making ends meet, planning ahead, managing financial products, and financial knowledge. The 2024 data shows that “high financial literacy”—defined as answering 5 or more of 7 questions correctly—describes no more than 33% of respondents in any state. The accompanying report notes that “measures of financial capability are even lower among younger adults,  people of color, those with household incomes below $25,000 per year, and those with  no college experience.” 

Finally, The American Public Education Foundation publishes the Nation’s Report Card on Financial Literacy, which grades U.S. states and territories using an A-F scale to evaluate their requirements, standards, and curriculum in K-12 financial education. The 2025 report card revealed that 17 states received an A leading to financially literate high school students, while two states and one territory got an F. 

Education Level, Socioeconomic Status, and Financial Literacy 

These sources point to the need for financial literacy instruction in the general population. However, low levels of financial literacy are even more prevalent among adults with lower levels of education and socioeconomic status, due to the relationship between low foundational skills and poverty in the United States. 

Referencing the five-level scale for literacy  proficiency used by the Survey of Adult Skills, ProLiteracy’s May 2025 article Causes of Low Adult Literacy in the U.S. notes that: Nearly 80% of those who live in poverty read at Level 2 or below, and the  interconnected cycles of poverty and low literacy perpetuate each other. ProLiteracy further reports that “disparities in educational opportunities and resources exist along geographic, racial, and socioeconomic lines, and people without a high school diploma earn three times less than those with the highest education levels.” Time and again, research shows that educational attainment is directly related to a person’s economic status. The Census Bureau data reiterates this relationship, indicating that adults without a high school diploma or equivalent earned a median income of $36,900 in 2024, just $3,500 more than the median income 20 years prior in 2004. 

The Bottom Line

Adults who are dually affected by poverty and low literacy skills have a critical need for financial literacy guidance that addresses setting and managing a budget when their weekly expenses are equal to or greater than their weekly income. They may have limited experience with banking, debit cards, and credit cards, as well as lack understanding of topics such as the effect of compound interest on loans (including student loans), the use of money transfers, or how to recognize scams and prevent identity theft. 

Adult education programs support learners in acquiring the financial literacy skills they need to navigate successfully in the financial context that is relevant to them, in tandem with development of their literacy, numeracy, and digital skills. Adult educators may look to high quality content and materials available through the Federal Trade Commission via https://consumer.gov/, a plain-language website designed to build financial knowledge for adults with low-level reading and numeracy skills. The site was developed in partnership with legal aid providers and experienced adult educators, providing real-world insight into what adults with low literacy experience and need when it comes to financial literacy.