Financial literacy has become a growing priority in U.S. education. As shown in the financial literacy map, many states now require students to complete a personal finance course to graduate from high school, reflecting a clear policy push to expand access to financial education.
But increased access does not necessarily mean improved outcomes. While the U.S. does not have a national personal finance test, it takes part in the Program for International Student Assessment (PISA), a global exam that measures how well 15-year-olds apply their knowledge in financial literacy (as well as other subjects). Looking at PISA results helps us understand outcomes—and they show there is room for improvement in how well U.S. students apply financial literacy skills.
PISA defines financial literacy as understanding financial concepts and risks, and having the skills and confidence to use that knowledge to make good financial decisions in real-life situations. In other words, it focuses not just on what students know, but on what they can do with that knowledge.
To measure this, PISA looks at three things:
- What students know (content)
- How they use that knowledge (process)
- Where they apply it (context)
These come together in real-world, scenario-based tasks that require students to think, analyze, and make decisions—just like they would outside the classroom.
A Closer Look at PISA Results
So how are U.S. students doing?
In the 2022 PISA financial literacy assessment, the United States scored around the OECD average but below top performers such as Belgium’s Flemish community, Denmark, and Canada.
But averages only tell part of the story.
PISA also groups students by proficiency levels, from the lowest level (Level 1) to the highest (Level 5) based on what they can actually do:
- Level 1: Basic awareness of money concepts and simple spending choices
- Level 2: Able to use basic financial knowledge for everyday decisions
- Levels 3–4: Applying financial skills to plan, manage, and think ahead
- Level 5: Advanced understanding to analyze complex financial decisions
Students scoring at Level 2 and above are considered to have reached baseline proficiency—the minimum level of financial literacy needed to manage everyday financial situations effectively.
In 2022, about 83% of U.S. students performed at Level 2 or above, while only around 13% reached Level 5 (advanced). Looking at financial literacy trends from 2012 to 2022, a clear and consistent pattern emerges: roughly 85% of students perform at Level 2 or above, while only about 10-13% reach Level 5.
Overall, this suggests that while most U.S. students achieve a baseline level of financial understanding, significantly fewer develop the stronger skills needed for more complex, real-world financial decisions.
The Gap Between Knowing and Doing
At first glance, this may seem surprising. The most widely used source for state financial literacy standards—the National Standards for Personal Financial Education(2021)—is comprehensive, covering areas like earning income, spending, saving, investing, managing credit, and managing risk. Across these areas, the standards emphasize knowledge and skills, decision-making, and real-world application.
On paper, this aligns closely with PISA.
What could be the reasons driving this gap?
The issue could be that while standards emphasize acquiring financial knowledge and skills applied to real-world contexts, these standards are perhaps not consistently applied in classroom instruction.
Using Spending as a Lens
To better understand where this gap shows up in practice, we can look more closely at one area: Spending.
PISA Approach: Real-World Decisions
In PISA, Spending is assessed through real-life scenarios.
The Phone Plans <click to see the actual unit> task is designed to assess how well students can apply mathematical reasoning to a real-life situation. Rather than focusing on abstract calculations alone, the item places students in a practical decision-making context that mirrors everyday financial choices.
In this task, students are presented with information about two or more mobile phone plans. Each plan has a different pricing structure. For example, one plan may include a fixed monthly fee with low per-call or per-message costs, while another may have no fixed fee but higher usage charges.
Description of the Phone Plans Unit
| Part 1: Comparing Plans for a Given Usage In the first part of the task, students are asked to determine which mobile phone plan offers the best value for a specific pattern of use (for example, a set number of calls and messages per month) To answer this, students must: Interpret the pricing structure of each plan Calculate the total cost for each option by combining fixed fees and usage-based charges Compare the results to identify the cheapest plan This part primarily assesses students’ ability to carry out multi-step calculations and apply mathematical reasoning in a structured way. |
| Part 2: Determining When One Plan Becomes Better Than Another In the second part, the task becomes more open and conceptually demanding. Instead of working with a fixed usage scenario, students are asked to determine under what conditions one plan becomes more cost-effective than another. For example, they may need to identify: The number of calls or messages at which two plans would cost the same The range of usage for which one plan is cheaper than the other This requires students to move beyond simple substitution and engage in more generalized reasoning. They must: Recognize how costs change as usage increases Formulate relationships between variables (e.g., number of calls and total cost) Compare two expressions or cost structures systematically Identify a threshold or “break-even point” |
U.S. Assessments: Simpler Tasks
In U.S. classrooms, there is no single standardized assessment for financial literacy. Instead, teachers rely on a mix of curriculum-based assessments and external commercial resources, such as NFEC, EVERFI, and FLVS to evaluate student understanding. Looking across these assessments reveals a clear pattern. For example, the NFEC test includes spending-related questions like the ones shown here.
Example 1 | Example 2 | Example 3 |
| Which of the following is an example of reducing expenses? A. Buying a more expensive phone B. Switching to a less expensive service C. Increasing your monthly budget D. Spending more on entertainment | What is the first step in creating a budget? A. Track your spending B. Set financial goals C. Gather information about your income and expenses D. Reduce your expenses | Brad’s annual car registration costs $390. What is the minimum amount of money he should save each month to cover this fixed expense? A. 19.5 B. 30 C. 32.5 D. 39 |
Conceptual prompts from EVERFI ask students to consider questions such as What are your needs versus your wants? and How can tracking your spending help you make better financial decisions?
A Florida Virtual School (FLVS) assignment <click to see the full assignment> provides another example. Students are asked to construct a budget, categorize expenses, and reflect on their spending choices.
These are all valuable skills. But they are usually taught one at a time in structured steps. These questions focus on testing simple skills like identifying concepts, following steps, and doing basic calculations, rather than using them together in real-life decisions.
Why This Matters
Taken together, these examples show that students are learning the pieces of financial decision-making—but may not be practicing how to put those pieces together.
A student who can calculate $390 ÷ 12 may still struggle to:
- Compare subscription options
- Identify hidden costs
- Adjust spending as circumstances change
Assessments matter here because they often shape instruction. What is tested signals what is valued, and teachers tend to align their instruction with those expectations. When assessments emphasize discrete skills, classroom teaching is more likely to do the same.
This may help explain the broader pattern. While PISA focuses on real-world, multi-step problem solving, many U.S. assessments place more emphasis on basic, isolated skills. These PISA results reflect this difference: many students reach Level 2, but fewer reach Levels 4 and 5, where applying knowledge in complex, real-life situations is needed.
Bridging the Gap
The good news is that the foundation is already in place. State standards focus on the right skills—budgeting, weighing trade-offs, and applying knowledge. The challenge is making sure this shows up in everyday classroom instruction.
This means giving teachers better support, like clear curriculum, training, and guidance that focus on real-world application. Without this, teaching can fall back on isolated, easier-to-measure skills. Assessment also needs to support this shift. Adding more real-world, scenario-based problems—like the PISA Mobile Phone Plan example—can better align what students need to do in everyday life. These tasks require students to work through multiple steps, weigh options, and use their knowledge to make informed financial decisions.
Aligning standards, instruction, and assessment can help students move beyond basic understanding to real financial decision-making. At Agora, this is the kind of issue we find ourselves drawn to: where the systems we know intimately reveal something the headline numbers don’t.
References
- Organisation for Economic Co-operation and Development. (2024). PISA 2022 Results (Volume IV): How Financially Smart Are Students? Paris: OECD Publishing. https://doi.org/10.1787/5a849c2a-en
- Organisation for Economic Co-operation and Development. (2019). PISA 2018 financial literacy items (released items). Paris: OECD Publishing. https://www.oecd.org/pisa/test/PISA2018-financial-literacy-items.pdf
- Jump$tart Coalition for Personal Financial Literacy & Council for Economic Education. (2021). National Standards for Personal Financial Education.
- National Financial Educators Council (NFEC). Financial Literacy Assessments and Question Bank.
- EVERFI. Financial Literacy Curriculum and Assessment Materials.
- Florida Virtual School (FLVS). Personal Finance Course Materials and Assignments.
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