In my life, I have often commented to myself, “I wish someone would have told me that when I was young.”  There are many things now, at the age of 55, that I wish I had known when I was a young man. In particular, I wish someone would have taught me more (or something) concerning how to handle money.

Unfortunately, I was at a disadvantage due to the fact that my parents were divorced, and I grew up with a mother who was disabled. However, I would like to think that perhaps I could have learned something from my teachers at school. I didn’t learn anything.  

No one told me about the dangers of going into debt. I wasn’t taught about the importance of saving for retirement. No one encouraged me to live within my means. I was told nothing about the stupidity of borrowing money to buy an item that just goes down in value, like a car. As it turned out, there was one school that taught me how to handle money properly—the school of hard knocks.

Getting married at the age of 22, my wife and I made every financial mistake a young couple can make. We didn’t save a dime, kept balances on credit cards, and borrowed money indiscriminately. Fortunately, as a student of the “school of hard knocks,” I began to do my homework.  

As I studied the characteristics of wealthy people, beginning with Thomas J. Stanley’s book, “The Millionaire Next Door,” I slowly began to realize how wrong I was with regards to handling money properly. I also realized that our consumer-driven American culture does little to help people handle their money properly.

Matriculating through the various stages of the school of hard knocks, I ultimately became motivated to help people succeed in their financial lives.

I am limited in how much of an impact I am able to make with regards to improving financial literacy in the country.  But make no mistake, we have to improve. At the macro level, our national leaders are struggling to balance the nation’s budget while seldom addressing a national debt that is reaching $20 trillion. At the micro level, it is equally discouraging.

In an article published on George Washington University’s website concerning financial literacy, only 9 percent of the students from the United States showed proficiency in financial literacy. Chinese students ranked highest with 43 percent of its students proficient in financial literacy. The study also highlighted that of all U.S. participants, 80 percent of them couldn’t even analyze the most basic invoice.  

That’s just one of many examples that highlights the embarrassing position we are in when it comes to knowledge in personal finances. It should cause us to consider making some serious changes in our educational system with regard to financial literacy.

As of 2016, only 17 states require high school students to take a personal financial literacy course as a requirement for graduation. While we are seeing improvement in our educational system, more needs to be done. The need for improved education in the area of personal financial literacy is obvious; research confirms just how important this need is.  

Recent research completed by the National Endowment for Financial Education has proved that financial education ultimately influences behavior. The organization’s research revealed that students who graduate in a state that requires a personal financial literacy course are “more likely to save, less likely to incur high credit card debt, and more likely to take better financial risks as young adults.”

It is crucial to find a way to educate people when they are young. The reality is that financial decision-making is becoming more complex today than ever before. The sooner proper financial lessons can be taught, the more likely people are to succeed financially.  

A recent survey from the Financial Industry Regulatory Authority found that young Americans were less likely to be financially capable than older Americans. That survey isn’t surprising; however, it is alarming when we consider that the problem is likely to get worse as Generations X and Y head into middle age.

There is a steep price to pay for financial illiteracy. Individuals may face, at best, an uncomfortable life and, at worse, bankruptcy and homelessness. Unfortunately, for most Americans, planning for one’s financial well-being has been a do-it-yourself proposition. That’s an issue with broad implications for our nation’s economic health.  

In the words of Roger W. Ferguson Jr., president and CEO of TIAA-CREF, “To ensure we have the strongest, most globally competitive economy possible, our nation needs its citizens to be able to manage their financial lives well. To get there, we must make a commitment to raising the level of financial literacy among Americans.” 

Raising the level of financial literacy among Americans must begin with teaching financial literacy at a young age. This can only happen by making financial education a part of the core curriculum. As much as possible, parents also should engage their children in regular, constructive conversations about issues involving money in order to give kids a solid foundation for future financial success. 

We also must do a better job of training teachers to provide competent financial education. Another study by the National Endowment for Financial Education revealed that 89 percent of K-12 teachers agree that students should be required to take financial literacy courses in school. However, more than 60 percent of those teachers don’t feel qualified to teach personal finance. 

I don’t pretend to have the ultimate solution to this problem with the suggestions made above. I understand that the lack of financial literacy in this country, especially among young people, also must be considered in light of race, ethnicity, gender, and socioeconomic status. As a result, developing sound financial literacy programs also must consider these variables. 

While I feel very fortunate to be in my current economic position, I often have thought about how much further along my wife and I might be today with regards to our finances had someone just taught me some basic lessons when I was young. We experienced many unnecessary struggles early on.  

While I was certainly not Ivy League material, I was fortunate to enroll in the school of hard knocks. While enrolled in this school, I learned the hard way how to properly handle money. It would be my hope that young people today can learn the proper lessons of financial literacy without having to enroll in my “alma mater.” It would be better for them as individuals, and it will be better for us as a nation—during the time it has taken you to read this article, the interest on our national debt has grown exponentially. 

Rick Biel is a financial adviser with Biel Investment Management, in Spokane. 
He can be reached at 509-995-5734 or rbiel@cfsbd.com.