Experts weigh in on the need for financial literacy at any stage of life

Today’s global economy is ever-changing and evolving. And when it comes to money, the one constant that must remain is the ability to understand and navigate financial risk.

For those who preach and teach the importance of making wise financial decisions, managing risk equates to the basic concept of financial literacy, a process once described as a “journey with no end.”

But where and when does the path leading to developing solid financial decision-making skills begin?

According to the World Economic Forum, findings from the latest Personal Finance, or P-Fin Index survey conducted in 2024, those deemed to be financially literate in the U.S. has hovered around a 50% clip for eight straight years. Americans, the results revealed, appear most comfortable managing aspects of borrowing, saving and consuming, but far less confident in the arena of financial risk.

Additionally, more than three-fourths, 77%, indicated they wish they had “done things differently in the past,” decisions they now believe that could have positively impacted their finances today.

“Telling kids about retirement and what they can achieve if they were to start planning early is one of my things I share with them all the time,” said Brenna Greenwood, a financial education specialist for CapEd Credit Union. “I tell them I can’t go back and be your age again; that when I was their age, I didn’t know any better, so I couldn’t do any better. Imagine what you can do just because you know better.”

A former high school English teacher, Greenwood spends her days promoting the importance of financial literacy to a variety of audiences. From elementary children to high school students, senior citizens and even those housed in correctional facilities, her message remains consistent.

“Finances are just like any other piece of health,” she said. “They’re just like your physical health, just like your mental health. If you can do one thing, even if it’s a simple thing today to make tomorrow better, then you’re being successful.”

In yet another survey focused on the importance of financial literacy conducted earlier this year by Talker Research, 53% of respondents surveyed indicated they feel “financially frozen” or unsure what to do when it comes to their finances. An “overwhelming amount of information” available online and through social media was cited as the prime reason leading to the uncertainty.

Factor in the high cost of living – rent, cell phone bills, insurance – student loan debt and wages that don’t keep up, and more and more young people, those classified as millennials and Gen Z, are now considered to be struggling financially.

In fact, a recent poll conducted by Savings.com indicated half of the parents questioned spend nearly $1,500 monthly on average to financially supplement their adult children’s finances.

Greenwood chalks up such situations, often referred to as the “bank of mom and dad,” to what she calls a “general lack of understanding” of the art of budgeting, a critical factor in managing one’s finances.

“A lot of young people just see way too many things as a need right now,” she said. “So instead of thinking about our financial health and making wise decisions, we go with what we want, go with what we think we need, and we find ourselves in situations where we’re riding it out until the next time we get money deposited into our bank account, and that’s a choice.”

Plus, compounding the issue of managing personal finances these days, young people are being hit with a barrage of advertisements, from the opportunity to get paid early, or simply boosting credit scores through the use of an app, to freely spending and buying through the push of a button and the conveniences of technology. Such promotions typically promote habits that, in many cases, run contrary to the need to develop budgeting skills necessary for building a stable financial future.

“We almost do a disservice to our kids when everything is instantaneous, and the planning doesn’t go into that,” said Christy Tribe, president and CEO of the Boise chapter of Junior Achievement (JA), “and that is critical to what they need.”

Beth Weedon, a JA development and program manager who spent a large portion of her career in the fields of education and journalism, doubled down on the importance of learning early in life how to master financial decisions.

“We want them to have the knowledge so when they reach that age and they see those advertisements, that they are not fooled because they have the confidence and the knowledge that started when they were in kindergarten,” Weedon said.

Founded in 1919, JA is a global nonprofit organization that uses educators and volunteers to help young people build habits to master financial literacy, and to develop entrepreneurship and work readiness skills. The teaching approach centers on “show don’t tell.”

This starts with developing solid basic math skills, which Tribe believes must be taught in a manner that demonstrates relevancy to what students are learning. In her experience, letting kids figure out the way home mortgage interest rates work is far more impactful than just simply telling them what they’ll actually spend over the course of a 30-year home loan.

“When you start teaching kids how they’re going to use finance, how their finances will apply to them when they get older, it makes math a bit more relevant to them,” Tribe said.

“We provide students with hands-on learning. We want to give that experience to them even starting in kindergarten because what you’re talking about is having an attitude about money,” Weedon said. “And we want kids to have a plan.”

Even if that plan involves bumps in the road when things don’t go as planned.

“It’s about giving them experiences to help them learn, and failure is a part of learning,” Tribe said. “I’ve learned more from my failures than I’ve ever learned from my successes.”

Extending the learning process from the classroom to sharing financial wisdom at home by getting kids to talk with their parents about the importance of managing finances properly also factors into the JA teaching plan.

“If we already have a generation or more of adults who may not have the healthiest attitudes towards money, then we can’t really expect them to guide our future youth into adulthood,” Weedon said. “Junior Achievement provides opportunities for kids to continue the discussion at home.”

And in the world of personal finance, owning a home has been a staple of the American dream. For Logan Freiburghaus, resident director at Northwest Nazarene College, and a licensed realtor with Idaho Property People, financially advising young people plays a huge role both on campus and in the realty office.

“I do encounter a lot of those types of people who just really need a lot of help on what it takes to get through the process and getting educated about purchasing their first home,” Freiburghaus said. “My favorite clients are those first-time homebuyers.”

But through his dual role, he is seeing an increased need to teach financial literacy, though it is accompanied by what he calls a “hunger for, rather than a lack of interest” on the part of young people.

“While they’re in school, and even at the college level, there’s not really any type of education that goes into homebuying or even renting and what that process can look like,” he said.

Providing financial guidance, Freiburghaus covers the entire homebuying process from start to finish, explaining in detail the roles of all the parties involved such as the Realtor, the lender, the title company and even the home inspectors.

“Usually I’m working with a lender, so we get pretty in depth about interest rates, down payments,” he said. “We’re just really trying to equip them for things that they’re likely not learning in the classroom.”

Equipping students financially in the classroom is the aim of Idaho House Bill 92. Enacted during the 2023 legislative session, the bill requires Idaho high school graduates to successfully complete one semester of a personal financial literacy course to obtain their diploma. The new requirement began with the graduating class of 2024, meaning students now need to complete two credits in both government and U.S. history, and one credit of economics as well as financial literacy.

The same year HB 92 passed, renowned financial guru Dave Ramsey issued a report stressing the need for financial literacy courses at the high school level. According to Ramsey’s findings, 72% of adults said they would be “further ahead with their money today” had they taken such a course in high school, while those who did take such an offering were five times more likely to feel “fully prepared for handling money” in the real world.

“I think the message is clear that regardless of what your current financial situation is, if you can learn something new and apply it to your life to make yourself one step closer to financial well-being, then you’re doing the right thing,” Greenwood said. “But you have to be willing to do the work to make it work. It’s not something that just happens. It actually takes time, energy and effort.”