Why Americans Are Failing the Grade at Financial Literacy

Americans tend to get basic financial questions wrong compared to other Western countries… why is that? And what can be done about it?

Two Cents on Twitter: @twocentspbs

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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.

Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Julia Lorenz-Olson
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Dano Johnson
Images by: Shutterstock
Music by: APM

SOURCES:

[MegaOfficeHours]

I went to high school in Colorado, and a Personal Finance course was offered as an elective. I learned about debit versus credit, created a budget, filled out 1040 tax forms, and handled an imaginary stock exchange account based on real world stocks. Best class I took while in high school.

[ChrisInvests]

Unfortunately, the schools don't teach financial education. Fortunately, people can learn themselves for free online 😀👍

[ladasodaexplains]

Unfortunately Youtube has always been my best teacher on financial literacy and much more

[prettypic]

It’s almost like there’s an incentive for companies to keep the general public ignorant in finances

[Lainabell]

I took a business and personal finance class in high school (usa). It was mostly about businesses - types of business, accounting, and stock market. We learned how to write a check but we never really went into detail on personal finance; saving and investing our money or making a budget. Most of the stuff I learned is from YouTube, my dad, and different articles. Thank you guys so much for making these videos!

[letsgetsocialinfo]

This is absolutely true ..I'm 41 years old I got my first credit card my first year of college$ 500 dollar limit that was in the year 2000 I've have been in debt ever since ..I'm now working to 2 full time jobs to pay off all my debt, my financial literacy was learned on my own, I was on the verge of filing for bankruptcy...I decided to work the two full time jobs pay off the debt ...remember the borrower is slave to the lender

[colinfrederick]

I think the best parent is transparent about what they don’t know. Teach your kids what you know, and show them how mistakes you’ve made cost you. They’ll learn from it. My mom’s horror stories prevented me from making many mistakes

[pratvachan]

I learnt it first from my father. You see, my father used to earn about a $100/month salary, a whopping $1200/year. Not bad for a government servant in Socialist India back then. He still asked me to earn my pocket money.
.
My job as a paperboy earned me 1cent per day and if I didn't show up, I would loose 1.2 cent of my salary.
So delivering newspapers on bicycle earned me 1/14 cent per kilometer of cycling. This, taught me to respect money.
.
So even though I earn almost $900/month now, I respect every cent I earn.

[WubblesMinecraft]

"You're pregnant again"?
You guys are the best, goals.

[daveduffy]

My financial training was “Put your money in the bank and it’ll be there when your old.” That was it. We all need to take a personal finance class.

[MrMikey]

I think my parents were a bad example when I was a kid on how to actually manage money and pay your bills. We were always having utilities shut off and debt collectors calling when the phone wasn't disconnected for non payment.
They did teach us about hard work. I did mow lawns and deliver papers. It was someone from the paper company that helped me get bank accounts and learn about that. Older aunts and uncles and grandparents would answer questions and show me stuff. Now as an adult I pay on time, have a savings, no credit card debt, no student loans and a great credit score. I still have to be careful about what I buy and how much I spend.

[jesswalsh]

I always stick to my frugal lifestyle when asked to contribute to Patreons. But I love you guys too much. I'm gonna do it. Consider yourselves patronized.

[eclectic_musafir]

I started learning after taking an *excellent* macroeconomics class at Valencia College taught by an actual economist with Wall Street experience. Among the top 7 classes of my engineering degree. From there, I started reading classic/modern personal finance & investing books from the local library during my summers at college. Almost immediately after I graduated, I shifted my focus into 4th gear, and restructured my investment portfolio, built an emergency fund, maxed out my Roth, turned to budgeting apps/software, and moved to higher-level holistic personal finance books. Thanks for the resources, because learning is a lifetime pursuit!

A small snippet of the books I've read:
- "A Random Walk Down Wall Street" by Burton Malkiel
- "The Next Millionaire Next Door" by Sarah Stanley
- "Your Money or Your Life" by Vicki Robin
- "The Dollar Meltdown" by Charles Goyette

[kamarpreet]

I am 35 years old and finally deciding to take charge of my finances. Unfortunately I didn't learn anything about finances in school or at home and now that I think of it I was never in the company of any friends who were financially smart too. I am learning a lot through YouTube videos and starting the new year onwards my goal is to keep educating myself in this area.

[geton]

You guys should just make a virtual school about financial education, because from all the videos I’ve watched. This should just be a course.

[ErinMV]

I became obsessed with watching Suze Orman in college and that's what really launched my personal finance education. I read her book and Dave Ramsey's as well as started following financial blogs/vlogs such as yours.

[brandontamayo]

Hmmm. I didn't know she needed a step ladder to look taller.

[sahilhassan]

The problem is that Banks and the financial industry lobby the government for them NOT to teach people about Finance.

[alia]

I learned about finances by having an unreliable mom and step dad that constantly brought stress and evictions to our tiny trailer. Got a little bullied for it too. Age 16 I told myself I'll never borrow money or student loan!! Growing up with less is what taught me about money. Being stationed overseas has helped

[JPWRana]

Talking about money was a no no at my house. I learned to be a saver because of DELAYED GRATIFICATION. When I asked my parents to buy me a toy, they said no... over and over again. I stopped asking for toys because I knew what the answer was. We weren't poor by any means... I never qualified for free lunches or financial need based scholarships. We had a home and it's paid off now. I didn't learn about credit cards until one of my last years of college.