Broker Check

Financial Literacy

April 28, 2020

Financial literacy levels among U.S. citizens is concerningly low. Nearly 2/3rds of Americans exhibit low levels of basic financial knowledge. In a recent survey by the FINRA Investor Education Foundation, nearly 61% of participants were unable to correctly answer more than three out of five basic financial literacy questions. These results also show that financial literacy levels tend to be strongly correlated with education and income. This growing issue throughout our country tends to impact those who need the most help. Low incomes, tight cash flow, and little access to resources and basic money management skills are all contributing factors to this growing issue. I believe a major culprit to these startling trends is how we are currently raising and educating our future generations.

Our current educational system is failing to properly prepare our youth for the financial realities they will experience in adulthood. Another survey completed back in 2015, tested the financial literacy of 15-year-old children from around the world. The U.S. ranked 7th trailing China, Canada, Russia, and Australia. We must do a better job of educating our youth and preparing them for tomorrow. We want to believe that personal finance classes would be a requirement for all students K-12, but the sad reality is that many states do not require these courses to be taught. Only 16.4% of U.S. high school students are required to take a personal finance course before graduation. As responsible adults, we need to push and encourage our educators to get these basic requirements and knowledge into our classrooms. 

I would also encourage parents and grandparents to get involved in the financial literacy process as well. Having your children work for an allowance can be a great way to help them understand the importance money plays in our society. Setting up a bank account and teaching them to save early can be valuable lessons for their future. Establishing simple habits early on will help create the knowledge base they will need later in life. Parents can even act as “employers” and offer to match part of their children’s savings to encourage good habits. Don’t be afraid to talk with your children about the 8th wonder of the world, Compound Interest! Be willing to share your own experiences with money and how it has shaped your decisions in life. There is nothing more rewarding than “investing” in your own children.

There are many apps and books available that can be very helpful to guide the process toward financial literacy. Several non-profits (Cha-Ching USA) have also been established to provide basic financial education through fun and interactive lessons. Don’t hesitate to reach out and let us be a part of your family’s journey.


Steven Dengler, CFP®

Financial Advisor / Director of Planning

Your local Towson Financial Advisors


Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.