Americans’ Financial Capability

Annamaria Lusardi

Abstract —This report aims to shed light on the causes of the financial crisis by looking at the following question: How financially capable are Americans? If people are ill-equipped to make financial decisions, there can be consequences for the individuals themselves and for the economy as a whole. A new survey fielded in the summer of 2009 provides timely insights on this important topic. Financial capability is measured in terms of how well people make ends meet, plan ahead, choose and manage financial products, and possess the skills and knowledge to make financial decisions.