America Has a Financial Literacy Problem

Themes from a week of research in Atlanta

This past week I had the opportunity to spend a week in Atlanta with a researcher from our company, learning about resident’s financial situations. We did not go in looking to push solutions; but rather, we came with open minds hoping to learn more.

The feedback was extremely raw. We went into people’s homes, sat down with them and talked about their lives & finances for hours. At times the stories were emotionally stirring, while simultaneously providing deep insights.

What we found were a number of concerning financial trends that were present amongst our participants. I believe that these trends extend beyond the borders of Atlanta, and are indicative of growing problems throughout all of the United States.

I would like to share these observations with you all now.

Since this was done as a part of company research I will not be sharing any personal information about the participants. Also, all of the content below reflects my own thoughts & opinions, and not those of my employer.


We don’t teach financial literacy in schools

One common theme that I heard across all the interviewees was that everything they learned about personal finance was learned outside of the classroom.

It seems that people learn about finances in one of two ways: 1.) From their parents/guardians OR 2.) From personal experience.

In high school they never taught us about our credit score, budgeting or finances. I had to learn all of that on my own. — Interviewee

For the people that had learned from their parents, they tended to be in a better financial position relative to those who had received little guidance from their parents growing up.

As you can probably imagine, those that learned from personal experience had to learn the hard way. In other words, most people’s early financial paths were all but decided from a young age.

I was left asking the burning question:

Why are we not teaching students about financial literacy in our schools?

People don’t learn until they have hit rock bottom

Building off the last theme, it became apparent that those raised without proper financial guidance, didn’t begin to learn until they were forced to.

For most of the people, their financial journey lines went something like this:

  • Moved out of their parents’ homes & started taking care of themselves.
  • Unknowingly made a number of poor financial decisions that led to debt.
  • Ignored their financial problems until the situation rapidly escalated & they hit rock bottom.
  • Realized that they needed to make changes and start taking action.

It’s unfortunate that one of the main paths to financial literacy is having to hit rock bottom first.

For most of the people we talked to, their early struggles could have been completely avoided if they had been taught a few basic aspects of personal finance at an early age.

Most of our society doesn’t understand credit

One of the things that I found shocking, was how poor of an understanding people had with regards to credit. In general, no one really understood how credit actually works.

Many of our interviewees had suffered from major credit card debt at some point in their lives. When we dug into why, it became apparent that they didn’t understand the implications of a credit card.

One of the participants told us that she started buying things with her credit card “because [she] could.” It didn’t occur to her that she was spending beyond her means, until she began falling behind on payments and had to pay high interest.

The credit score was also another black box for people. Most of the interviewees said that they check their credit score on a recurring basis, but only because it is so easily available through banks and 3rd party applications.

During one of the interviews, the participant told us that he thought the credit score system was deeply flawed. He referenced past periods when his score had increased, despite his overall financial situation worsening & vice-versa.

For a structure that is so embedded in our overall financial system, it is worrisome how few people actually understand how credit works.

Debt is a trap

I’ve been fortunate to never experience what it is like to live with major debt, and as a result I was shielded from the haunting reality of how much of an anchor debt can be.

Many of the participants described the vicious circle of debt that they were trapped in. What usually began as seemingly reasonable debts, quickly spiraled out of control. All it took was one unexpected event or a few missed payments to send their interest rates soaring. Once the interest became high enough, it became all but impossible to pay off their principal quickly.

One participant’s story in particular stood out to me:

One month I was really behind on my payments. So much so that the lenders actually came and repossessed my car overnight. Unfortunately their offices were closed the next day, so I didn’t have my car to drive into work. The next morning I had to call in and beg my boss not to fire me. He understood the situation, but I lost money from missing work; money that I could have put towards my bills. Luckily, my mom helped me pay to get my car back otherwise I don’t know what I would have done.

It’s unfortunate, because our current financial system seems to prey on those who are struggling the most. While many of these problems could have been prevented with some basic financial education and behavioral adjustments, it’s the edge cases that really worry me.

Too many people in this country are one unfortunate event away from having the rug pulled out from under them.

College might not be worth it anymore

For all of the participants in the under 30 demographic, there was another common theme that was unique to their segment: massive student loans.

I wasn’t necessarily surprised to hear that many of the participants had accumulated student loans, after all, it is now the second highest consumer debt category. However, I was surprised to learn was how little their degrees helped in paying off their loans.

Many of the participants had gone on to work jobs that fell outside of their fields. In a twist of cruel irony, the jobs that they were now working to pay off their student loans, did not even require college degrees.

I was surprised to learn was how little their degrees helped in paying off their loans.

Whenever we pressed the participants on why they chose to take out loans and go to college, they pretty much all agreed they did it because “it’s what you do to succeed.”

One has to question if these participants will feel the same way in a few decades when it is their children’s turns to graduate high school. Will the scars of their own student debts lead them to suggest alternative paths for their kids?


In our society, it is considered taboo to talk about personal finances and that’s a problem. Most of us are aware of the macro trends, however very few of us are informed of individual financial situations outside of our own.

People tend to fall on either the thriving or surviving end of the financial spectrum. For those that are thriving, it is easy to look past the challenges that others in our society face or remain unaware that they exist at all. For those that are struggling to survive, it is easy to feel alone and suffer in silence out of embarrassment.

In our society, it is considered taboo to talk about personal finances and that’s a problem.

I wish everyone in our society could have the opportunity to do what I did this past week in Atlanta. To be invited into a stranger’s home, hear their story and learn about their financial situation. At the very least, it would make people more aware of the problems we are experiencing as a society.

However, since that is not possible, I would suggest a far simpler starting point. Let’s start with education. Individual’s backgrounds, behaviors and life events are nearly impossible to control, but it is easy to influence the financial information they receive. The information is out there, we just need to be deliberate in making sure they are exposed to it at the right times.

If there was one trait that was universal across all of the participants, it was that I didn’t meet any victims. Nobody was ready to throw in the towel and be angry at life for their situation. Instead, they were motivated and ready to make the changes necessary.

Americans are ready to learn, we just need to help each other raise our collective financial literacy, before it’s too late.



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