Financial literacy, in turn, is knowledge that enables sound financial decision making.

Significant number of U.S. adults have low financial literacy

Unfortunately, a significant number of U.S. adults are poorly positioned to make appropriate financial decisions because of poor financial literacy.

Respondents answered only half of financial literacy questions correctly, on average.

Financial literacy is lowest in the realm of comprehending and understanding risk and uncertainty, which is particularly troubling in today's environment.

"As COVID-19 continues to loom over America along with the rest of the world, a personal finance double jeopardy looms over many U.S. adults as well," according to the survey report.

"First, many experience a precarious financial state. Month-to-month personal finances are out of balance. There is little if any capacity to handle a financial setback such as an unexpected expense, let alone a job loss. Second, many function with a poor level of financial literacy, i.e., knowledge and understanding that enable sound financial decision making and effective management of personal finances."

Economic turbulence demands an ability to make appropriate financial decisions

In an environment of economic turbulence such as that created by the pandemic, the ability to make appropriate financial decisions matters greatly. Poor financial decisions can compound existing personal finance challenges. Not surprisingly, financial well-being tends to be most compromised among those with the lowest levels of financial literacy.

Furthermore, financial challenges are significantly more prevalent among Black and Hispanic Americans, two groups disproportionately affected by the pandemic. Their situation is made even more precarious by lower levels of financial literacy in comparison to whites.

Black and Hispanic Americans with greater financial literacy spend less time on financial issues and problems.

"Obviously, with the increasing availability of vaccinations and case numbers trending down, Americans are looking forward to life post-COVID and a return to `normal,'" the report said.

"That does not necessarily mean a return to the pre-COVID status quo, however, nor should it. For many, that normal was still financially precarious. Moreover and importantly, the current crisis has shown the importance of possessing the knowledge and skills to navigate an uncertain economic environment and of having the financial cushion to weather unexpected shocks. It's thus noteworthy that improving personal finances appears to be a focus for many Americans."

Many Black and Hispanic Americans are motivated to increase financial literacy

Nearly four in 10 of U.S. adults said that the economic uncertainty created by COVID-19 has motivated them to increase their financial literacy.

Furthermore, this figure is significantly higher among both Black and Hispanic Americans, at 53 percent and 55 percent, respectively. This is particularly important, because a lack of financial literacy is particularly acute among both groups.

Financial education one of several paths to economic recovery

"It's important for the financial services sector, the education sector, community organizations and nonprofits focused on promoting financial well-being to leverage the opportunity created by these newfound intentions," the report concluded. "Equally important is doing so with initiatives, programming and content targeting specific socio-demographic groups, particularly subgroups of the Black and Hispanic communities.

"One size does not fit all when it comes to financial well-being and financial literacy. More than ever, now is an excellent time to increase the efforts and to make financial education part of the recovery path out of the pandemic."