Financial literacy, wellness and resilience among African Americans: Financial literacy and financial resilience
New insights from the Personal Finance (P-Fin) Index
A strong relationship between financial literacy and financial resilience holds among both African Americans and whites. Among African Americans who correctly answered 25% or less of the P-Fin Index questions, 60% could certainly not or probably not come up with $2,000 within 30 days (Figure 13). This figure drops to only 11% among African Americans who correctly answered 75% or more of the index questions. In fact, at higher levels of financial literacy, financial resilience among African Americans and whites is equal (Figure 13). The link between financial literacy and financial resilience is verified in regression analysis (Table A1 of the Appendix). Among African Americans, there is a statistically significant relationship between financial literacy and financial resilience after controlling for various socioeconomic factors, such as education and household income. Those with greater financial literacy are more likely to have the capacity to handle a financial shock.