- April 4, 2018
- Posted by: Kirsten Campbell
- Category: Blog
What would it be like if the default school curriculum taught us how to file taxes and budget for a household? Or educated us about debt, investing, or even starting a business? 74% of 13-21 year olds weren’t taught about financial literacy, yet a whopping 75% of Americans consider themselves to be financially savvy. This disconnect is compounded by often unacknowledged socioeconomic forces beyond the average person’s control. While financial literacy is the knowledge and capacity to make practical decisions about your money, outside influences must be acknowledged. Personal responsibility can only extend to forces that are logically within the average person’s control.
Mo’ money mo’ problems
Today’s money landscape is vastly different than that of our grandparents. Apps like Robinhood, equity crowdfunding portals, the JOBS Act and fintech have all reshaped and complicated the financial options available to us. Previous generations could rely on social security pensions and employer sponsored 401K plans, absolving them from the need to actively save or invest their retirement nestegg. Most of us will never have this luxury. In addition to taking on the burden of financial retirement planning, younger generations have been forced to navigate a vastly different financial landscape than their parents and grandparents—and without adequate education to boot. Paralysis by analysis is all too common when confronted with the dizzying array of money options available, but learning about money is too important to ignore.
Financial literacy is empowering
It’s never too early (or too late!) to learn about financial literacy, especially when 80% of Americans lived paycheck to paycheck before the pandemic and 8 million more have since been pushed into poverty. Talking about money can be scary, embarrassing and feel really uncomfortable, but knowledge is power. Learning how to earn, invest, pay taxes and plan for retirement is all pretty important stuff, and the financial decisions made during our youth have a colossal impact on one’s available choices in the future.
Ask anyone around you about interest rates, their investment portfolio, or federal taxes and more often than not, you’ll be met with blank stares, confusion or shame. No one’s perfect, but let’s strive to empower ourselves and our communities with financial prowess. Removing the mystery from money makes it less scary (sort of like the monster under the bed when we were kids) and it’s worth remembering that even people who consider themselves financially savvy, aren’t necessarily so. Remember, only 19% of folks who deemed themselves as having strong personal financial knowledge, could answer financial questions correctly! So do not harbor shame or embarrassment.
Money doesn’t buy happiness
Teaching yourself about money isn’t a linear progression by any means, but it behooves us to invest time into learning practical financial education. Imagine if everyone was armed with the knowledge to easily complete annual income taxes, invest in the stock market, build a business and take advantage of a 401K. Money brings comfort, security and most importantly, while it doesn’t buy happiness, it gives you options. That’s why generational wealth can have a profound effect on someone’s life trajectory. And remember, financial literacy is a lifelong process with no final destination.
If you’re curious to learn more about investing in and via equity crowdfunding, check out TruCrowd’s online investment portal.