Why Education Is Important

Find a Child Therapist

Decreased financial literacy may be related to our mostly cash-less society.

Financial literacy has been shown to be associated with improved financial outcomes.

Financial difficulties arising from financial illiteracy may lead to poorer mental health.

The ability to understand and effectively use financial skills among younger American adults appears to have declined over more than a decade.

For instance, on a standard five-question quiz about financial knowledge, adults ages 18–29 averaged 2.5 correct answers in 2009 but only 1.8 in 2021 (Urban & Valdes, 2022).

I believe that one of the reasons for this decreased financial literacy may be related to the absence of cash in our current-day society. Many children no longer see their parents counting out bills or change in stores.

Further, when purchases are made with credit or debit cards, and earnings and bills are handled by parents outside of their children’s awareness, children gain little exposure to how money is accumulated or used.

Without financial literacy, how can we expect young people to thrive without the need for assistance from their families, aid agencies, or the government?

Financial literacy has been shown to be associated with improved financial outcomes (Angrisani et al., 2023). Further, it is well recognized that financial difficulties, some of which can develop because of financial illiteracy, are associated with poorer physical and mental health, particularly depression (Samuel et al., 2025; Tibbetts et al., 2025).

In a 2023 Pew Research Center survey poll, American adults ages 50 and older (63 percent) were more likely than those 18 to 49 (45 percent) to say they were knowledgeable about personal finances.

Distressingly, only half of 18- to 29-year-olds were confident in their ability to create a monthly budget, a plan to pay off debt, or to save money.

Among U.S. adults who were knowledgeable about personal finances in this poll, 49 percent said they learned a great deal or a fair amount about personal finances from family and friends; 33 percent learned from the internet, 27 percent from their college, 24 percent from media including books, and only 19 percent from elementary or........

© Psychology Today