Financial literacy and wellness among U.S. women: Financial wellness
Previous P-Fin Index findings have demonstrated that financial wellness tends to be greater among U.S. adults with higher levels of financial literacy.11 This implies that those with greater financial literacy are better positioned along various dimensions to weather adverse economic conditions such as those that exist today.
The same finding holds when focusing on women in particular—those with greater financial literacy tend to exhibit greater financial wellness. Specifically, women who correctly answer more of the P-Fin Index questions are doing better on a variety of indicators linked to financial wellness:
Better able to make ends meet (Figure 9).
More likely to feel unconstrained by debt (Figure 10).
Better able to cope with a financial shock (Figure 10).
More likely to make loan payments in full and on time (Figure 11).
More likely to save and plan for retirement (Figure 12).
In addition, women with higher levels of financial literacy tend to spend less time on personal finance issues and problems (Figure 13). Overall, women spend an average of seven hours per week thinking about and dealing with issues and problems related to their personal finances. However, among those with the lowest levels of financial literacy (i.e., those who correctly answered 25% or less of the P-Fin Index questions), this figure is more than double—16 hours. By comparison, those with the highest levels of financial literacy (i.e., those who correctly answered over 75% of the P-Fin Index questions) averaged only 2 hours per week.
11 See Yakoboski, Lusardi and Hasler (2020). The 2020 P-Fin Index survey contained several questions regarding behaviors that should promote financial wellness. A strong link between P-Fin Index scores and indicative of financial wellness—questions regarding outcomes that demonstrate financial wellness or these financial wellness indicators was found to exist among the U.S. adult population.