International Journal of

Business & Management Studies

ISSN 2694-1430 (Print), ISSN 2694-1449 (Online)
The Financial Literacy and Fragility of African Americans before and during Covid-19


This study examines the financial literacy and fragility of African Americans in the state of Arkansas. The National Financial Capability Study (NFCS) is administered by FINRA Investor Foundation.  The NFCS is a survey designed to establish key indicators of Americans’ financial capability. The survey is nationally representative with more than 27,000 observations.  The 2018 NFCS survey also contains data from the TIAA Institute-Global Financial Literacy Excellence Center (GFLEC) Personal Finance Index (P-Fin Index) to examine the current state of financial literacy among African Americans.  The NFCS was administered in Arkansas to 500 respondents.  Data was extracted from the 500 respondents to obtain only African Americans.  There were 59 African American respondents. The sample includes 36 females (61%) ages 18 to over 65 and 23 males (39%) within same age range. This study identified the financial well-being of African Americans was well below that of the U.S. population prior to Covid-19.  The national results showed that personal finance knowledge is lowest among African Americans. In Arkansas, 18% of respondents reported over the past year, their household spent more than their income. Nationally, African Americans (19%) reported spending more than their income.  In Arkansas, 50% of individuals lack emergency funds and 53% of African Americans lack emergency funds.  Study participants were asked six questions from the P-Fin Index.  Arkansas respondents answered there or fewer questions correctly.  Over 50% of African Americans in Arkansas answered two questions correctly and over 50% indicated they didn’t know.