Financial Literacy: You’ve Got the Power to Build Your Umbrella 

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by Advice Chaser
by Advice Chaser

Increasing your financial knowledge can change your life. 


Do you work hard, but still don’t have enough money? Do you try to make careful decisions about your earnings, but still struggle with an increasingly complex and volatile financial world? Do you have more rainy days than sunshine?

Don’t feel ashamed–you’re far from alone. Many people are experiencing the same struggle, and the emotional and literal costs of financial illiteracy are on the rise. 

43% of student loan borrowers are not making payments. 38% of U.S. households have credit card debt. 56% of American adults have less than $10,000 saved for retirement. Respondents to a National Financial Educators Council survey estimated an average of $1,230 lost per respondent in 2018 alone–and that’s a low average. 

Unfortunately, these costs multiply over a lifetime, and many people don’t realize the importance of learning money management until it’s too late. 

Financially literate people understand how money is earned, spent, and saved, and make informed financial decisions about how to generate and invest money. Financially literate people are able to do more with less income, secure their futures, reduce financial stress, and have the power to create greater peace. 

Most people want to make good financial decisions, but never had the opportunity to learn how. Very few schools teach these skills, and the world is rapidly changing and bringing with it ever more complex decisions. And far too many people who want greater financial literacy are limited by these five common misconceptions about financial literacy: 

People overestimate their own financial literacy. 

Many people have an umbrella, but don’t know how to open it. One study found that nearly half of respondents reported that they are extremely or very financially literate. But when asked to take a financial quiz, fewer than half passed, and only 6 percent scored an “A” grade of 90 percent or better. This study also found that the vast majority of respondents have never attended a financial education program.

If you’ve never used an umbrella, or you’re used to the rain, how do you know how to open your umbrella?


People assume financial illiteracy is a problem only young, lazy, poor, or uneducated people have. 

Financial illiteracy is a problem that affects people all across the age, income and educational spectra.

While there is a correlation between economic struggle and lack of financial knowledge, this problem is not limited to any one group. Many educated, high-earning people in strong markets around the world suffer from a lack of financial literacy. That includes plenty of good people who work hard, and who deserve to know how to make the most of their precious earnings.

Rain falls on everyone; you deserve to know how to stay dry. 

People invest money with emotion. 

It can be hard to get a handle on an umbrella when holding one is filled with feelings. Money is a loaded topic. It’s not just about our bank balance–some of the most common emotions around money are fear, anger, and shame. 

Most of us get emotional about money, and common fears include fear of not having enough, a sense of overwhelm about complicated financial concepts, or a dread of being responsible for others. Many people define themselves by their money, and worry on some level that figuring out what they need to learn will reveal a personal lack.

People who are experienced in money management know that half the management isn’t math, it’s feelings. Gaining financial wisdom and putting new skills into practice can require a period of personal adjustment, and being prepared for the strong emotions that can come with that will help many people make better money decisions. 

Financial literacy has changed. 

Over the past generation, financial decisions have increasingly moved from the hands of professionals to consumers, while also becoming more varied and complex.

Consumers now must choose among various investment and savings options, each offering varying interest rates and maturities. Each of these options multiplies the financial concepts a consumer must master, and the decisions a consumer must make, and the stakes are high: these decisions impact whether people can afford to pay for college, buy a home, or retire in comfort.

Understandably, many consumers feel increasingly overwhelmed by a volatile financial market where they struggle with decisions they are not yet adequately educated to make. There’s a perfect storm of developments in today’s market, and your grandfather’s umbrella may not keep you dry in today’s rain. 

Your Next Step to a Better Umbrella

Yes, financial markets are changing, and fewer institutions are teaching people crucial skills. It’s increasingly up to individuals to take responsibility for assessing and increasing their own financial skills. The good news is, you’re not alone. There are many people who, like you, are ready to grab the wealth of resources at your fingertips and learn more about money.

Taking the time to think about your money is worth it. Small investments of time in a step-by-step financial education yields dividends of growing financial wisdom, and helps you to save more, spend less, and build the life you really want. You have the power to build a better umbrella–your financial wellness is worth the work.


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