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A Brief History of Financial Literacy and Its Importance Today

Mac Gardner December 6, 2021

Students participating in financial education

Preparing for the future is what financial planning is all about. Helping clients achieve their goals and dreams is how we measure our success. But there are so many Americans who struggle with their financial futures because of poor financial literacy.

This has never been more apparent than during the COVID-19 pandemic. If the economic volatility caused by the pandemic taught us anything, it’s that we never know what’s going to happen and it’s critically important for everyone to be financially prepared for the worst.

The Origins of Financial Education

The U.S. has a poor history of establishing standards for financial literacy, even though the concept of financial education and its importance as a life skill has been understood since our country began.

There are records of founding fathers Benjamin Franklin and John Adams both writing about it. And more than 100 years ago, the Smith-Lever Act established the concept of formal financial education when the Cooperative Extension Service was created to offer outreach programs to educate rural Americans about a range of topics—among them personal finance.

By 2003 the Financial Literacy and Education Commission was established and subsequently released a national strategy for financial education. Americans now celebrate April as National Financial Literacy Awareness Month and President George W. Bush signed an order in 2008 that created an advisory council on financial literacy.

But even with its extensive history and government backing, why do we still fall short when it comes to ensuring people have a good base in financial literacy to make informed money decisions that will have an impact on the rest of their lives?

According to the Council for Economic Education, only 22 states currently have personal finance coursework requirements in their high schools, but the pandemic has created some urgency around improving this. At one point in 2021, 25 states had introduced legislation that would add personal finance education to their high school curriculum.1

Pandemic Raises Awareness of Need for Financial Literacy

While our nation’s lack of financial literacy has reared its head during other times of economic volatility, the pandemic is the most recent reminder. COVID-19 is proving to be more than just a health threat as it wreaks havoc on not only our physical well-being but also on our financial well-being.

When a group of US adults was asked what caused them the most stress, the number one answer was their finances. They also said the pandemic has made their financial situation worse and that this increased financial stress has negatively impacted their mental, physical, and relational health, further confirming that financial wellness impacts all aspects of our lives.2

The pandemic triggered job losses, income reductions, and other economic restrictions which were especially difficult for people whose finances were already at risk. For those hit the hardest, making financial literacy a priority would provide the opportunity to improve the situation in the future.

And while financial literacy for young people is a passion of mine, I don’t believe it is only for kids. It’s true that getting an early start on financial education sets children up to be more successful as adults, but all of us need to understand the best ways to manage our money.

Just-in-Time Financial Education Training

When asked why they chose to work with a financial professional, 85 percent of respondents to the eMoney Planning with Purpose survey said they were seeking peace of mind. Additionally, 88 percent said they feel financial wellness is important to discuss with their advisor and 90 percent say they are receptive to having those financial wellness discussions.3

It’s clear that financial professionals have an important opportunity to improve the financial wellness of their clients and providing ongoing financial education can help. For adults who don’t have a foundation in financial literacy, an ideal way to gain a financial education is through the delivery of “just-in-time training.” And financial professionals can take this idea into their communities as well.

The concept behind just-in-time financial training is to educate individuals about specific financial topics just before they are making a decision about said topic. For example, learning about choosing a college and how financial aid works as students are thinking about making the transition to higher education. The thought process is that they will be making their decisions while that knowledge is still fresh. As anyone who has tried to learn something new knows, if you don’t immediately use your new knowledge, the likelihood of retaining it diminishes over time.

This just-in-time training can encompass a wide array of topics from college debt, salary negotiations, and home purchases to subjects many financial professionals help their clients with every day like maximizing tax savings, reviewing year-end investment account statements, and the implications of receiving an inheritance.

From basic budgeting to managing your estate, financial education is important no matter what your life stage or financial circumstance.

Keep Advocating for Change

I believe advocacy for improved financial education is everyone’s responsibility—but especially for those of us in the financial industry. After all, we see first hand on a daily basis where many of the deficiencies lie.

Beyond what should be done in schools, we can help by getting involved in our communities. Retirement advisors can work to ensure more employers provide financial education to their workforce. We can encourage money conversations in our own homes and in the homes of our clients who have children. The more we talk about money and how we use it in our daily lives, the better the understanding of how it can be a tool to achieve what matters most to us.

With all of the challenges the pandemic has brought to light, I can’t help hoping that one positive result is the awakening for everyone that they need to think about and plan financially for their futures to be as prepared as possible for life’s uncertainties.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.


1 Sherrill, Christian. “NGPF Personal Finance Education BillTracker.” Next Gen Personal Finance, 2021. May 10.

2 eMoney Advisor surveyed 2,000 nationally representative respondents from 12/09/2020 to 12/11/2020.

3 eMoney Planning with Purpose Research, July 2021, Advisors n=393, End clients n=391

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About the Author

Mac Gardner has served in the financial services industry for more than 20 years. His passion for financial literacy led him to publish his first book, “Motivate Your Money!” in 2013. As his family grew and his clients began to ask him for ways to teach their kids about managing money he decided to use elements from his first book to develop a financial literacy platform for young children. The Four Money Bears represent the four basic functions of money. When children gain exposure to money management skills at an early age they are likely to develop healthy financial planning habits as adults. Mac is a true believer in the power of stories. He wants every child to know the story of “The Four Money Bears” and the benefits of sound money management for generations to come.

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