This study is a very good example of cause and effect relationship between the lack of financial education in early adulthood and the financial crisis experienced by many American families.
In theory it seems natural to count on the kids learning from their parents about financial management. However, often parents are not the most likable sources of information (who wants to listen to their parents?! about anything?) or some parent may not have the best financial habits themselves. The result is generation after generation of poorly prepared consumers who enter the real world. Where they are bombarded by marketing that leads them to overextend themselves financially through living well beyond their means. Additionally, consumer fraud is prevalent in all education and economic levels of population. This is arguably primarily due to lack of educated skepticism regarding new financial products and money managers’ or other types of financial advisors’ abilities.
In many cases money is something people don’t feel comfortable discussing let alone handling its application towards saving for retirement or other life events. The only solution clearly is an enhanced understanding of the basic financial and market concepts that would demystify personal financial management.
What can we do to make financial awareness “popular”?
