AUTHORS

Harold J. Toro, Ph.D.

Olivia Valdés, Ph.D.

PDF Version

The FINRA Investor Education Foundation (FINRA Foundation) published a research brief titled An Overview of Factors Tied to the Financial Capability of Adults in Puerto Rico, co-authored by Harold J. Toro, CNE’s Research Director and Olivia Valdés, Senior Researcher at the FINRA Foundation.

Executive Summary

The Commonwealth of Puerto Rico has been an unincorporated territory of the United States (U.S.) for over a century. Despite being an important part of the U.S. and its residents U.S. citizens, our understanding of the financial state of households of Puerto Rico remains limited. To better understand how Puerto Rican households are faring financially, a topic last comprehensively studied in the 2007–08 Puerto Rico Survey of Consumer Finances (Toro, 2013), the 2021 National Financial Capability Study (NFCS) surveyed 1,001 adults in Puerto Rico in both English and Spanish. The findings show that while debt levels are relatively low, many in Puerto Rico struggle to make ends meet— particularly those who are younger, have lower household incomes and lack a four-year college degree. Wealth building and financial planning are sparse with few reporting they have emergency savings or own investment accounts.

We provide a brief contextual summary of Puerto Rico’s population and its economic trajectory during the last 15 years and later examine three main areas of financial capability: (1) people’s ability to “make ends meet,” including the extent to which they experience financial fragility, income volatility and overspending; (2) their indebtedness, including reports of student loans and medical debt; and (3) their financial planning and wealth building, including home ownership, emergency savings, and ownership of retirement and taxable (i.e., non-retirement) investment accounts. We analyze how these indicators vary by age, gender, educational attainment, household income and the presence of intergenerational wealth transfers. Section six provides a summary of our findings and offers some general implications of this research.