The Domino Effect Of Financial Illiteracy 

By David Stedman, CEO and Founder of BrightDime

In 2014, I ended my 21-year Wall Street career. The energy, people, innovation and intellect were intoxicating and rewarding; however, at the end of each day I never said, “I really helped somebody today.” The next chapter for me was about helping people by giving them free or inexpensive access to money tools, financial education, and personalized coaching. 

Many suffered because they did not possess the financial resources necessary to make informed money decisions. Moreover, I learned that it was possible for generations of families to suffer from ill-informed financial decisions. In fact, not only was it possible, but the ramifications ran much deeper than I thought. Ill-informed financial decisions can result in financial insecurity, divorce, suicide, domestic violence, stress, and more.

To provide some context on adult financial illiteracy, here are a few research findings:

  • The National Financial Educators Council conducted extensive research documenting that an overwhelming number of American parents cannot teach what financial experts deem to be good money habits to their children. 
  • In a survey by, one in four adults did not learn any money lessons growing up. 
  • In a study by National Financial Capability, less than 1/3 of adults know three basic financial concepts by age 40, despite the fact that most important decisions are made prior to that age. 

Financial literacy is acutely lacking, as evidenced by these results. Poor financial decisions can cause generations of poor financial choices that include inadequate savings, careless spending, excessive credit card usage, and bad investment decisions. Why? Because children learn how their parents handle money, which can influence their behavior as adults. 

But what if generations passed on good money habits? What effect does making informed financial decisions and having good money management skills have on a society as a whole?  

Here’s what I found: 

  • Financial education gives people the tools they need to accumulate wealth, buy homes, manage debt, and save for emergencies and retirement. As a result, they become less reliant on social services and are less likely to suffer from fraud or identity theft. 
  • Financial literacy has been proven to reduce income inequality as well as build strong communities.
  • People who have a solid understanding of good money management have lower levels of stress at home and at the workplace, thus resulting in a more productive, happy, and successful life. 

The bottom line is that financial literacy is a vital life skill and it needs to be an equitable foundation for all. For individuals, families, and as a society, financial literacy creates prosperous lives and simply makes communities better. 

Fortunately, we live in a technological age where we can make real strides in overcoming a lack of financial education. With online money tools and education, it has never been easier for Americans to become financially savvy and pass on their knowledge to their children, family, and friends. Financial wellness is a lifelong and generational journey that is critical in reaching goals, fulfilling dreams, and creating a better world for everyone.

For further reading, please check out the following resourceThe Importance of Building Good Financial Habits Early

To learn more about BrightDime, go to

Leave a Reply