My parents were immigrants. They came to this country and worked hard to build a life for our family of four brothers.
In the 1990s, my dad was the primary breadwinner, working as a diesel truck engineer. My mom worked at a pharmaceutical company in their packaging department. They stretched every dollar. Groceries for a family of six cost about $100 a week. My brothers and I got $5 a week for after-school snacks. That was it.
We lived frugally. For a while, all six of us shared a place in the South Bronx. Then we moved to a one-bedroom apartment in Jamaica, Queens. Eventually, my parents saved enough to buy a house—a fixer-upper that my family and I worked together over a summer to fix up. It was worth the sacrifice. We all had our own rooms in a good neighborhood.
My parents did the hard part. They modeled financial responsibility every day. They saved. They sacrificed. They made it work on modest incomes.
But here’s the thing: none of it transferred to me or my brothers.
As we got older and started earning our own money, my parents’ frugality didn’t follow us. Maybe we’d lived so lean as kids that we overcorrected when we finally had resources of our own. But I think the real reason is simpler: my parents never actually taught us about money. They lived it, but they didn’t explain it.
I never got a lesson on needs versus wants. Nobody walked me through how credit cards worked or why carrying a balance was dangerous. There were no conversations about investing, or compound interest, or how to evaluate a financial decision. Just high-level comments about saving more. Nothing practical. Nothing I could apply.
My parents assumed that because they were frugal, we would be too. That the behavior would transfer automatically through proximity. It didn’t.
Now compare that to my wife Trisha’s family.
Trisha grew up in a single-parent household. Her mom was a seamstress—talented and hardworking—who made sure Trisha understood both. She talked to Trisha about money. Not in a stressful way. Not lectures. Just practical conversations about how financial decisions worked. She explained the difference between needs and wants. She discussed trade-offs. She made financial thinking a normal part of life.
When Trisha and I got married, she didn’t lecture me about my financial mess. She just started helping me see things differently. The lessons she’d learned growing up—the ones her mom had explicitly taught her—she passed on to me. And it changed everything.
Here’s what strikes me about these two households: both my parents and Trisha’s mom cared. They all worked hard. They all wanted their kids to succeed. The difference wasn’t love or effort. The difference was whether financial literacy was explicitly taught or just implicitly modeled.
My parents assumed I’d absorb it. Trisha’s mom made sure she learned it.
The Assumption We Don’t Question
When financial literacy isn’t taught in schools, there’s an unspoken assumption about where kids are supposed to learn it: at home.
Ask your parents. Figure it out from your family. Watch how the adults in your life handle money and pick it up along the way.
This sounds reasonable. Parents teach their kids all kinds of things—how to tie shoes, how to drive, how to navigate social situations. Why not money?
But the assumption breaks down fast.
It assumes parents have the knowledge to teach. It assumes they have the vocabulary to explain concepts like compound interest, credit utilization, and risk diversification. It assumes they know how to translate their own financial habits—good or bad—into lessons their kids can understand and apply.
For most families, one or more of those assumptions is wrong.
You Can’t Teach What You Don’t Know
Here’s a number that should trouble anyone who thinks families can fill the gap: only about 35% of American adults can correctly answer three basic financial literacy questions.
These aren’t trick questions. They test fundamental concepts: compound interest, inflation, and risk diversification. The kind of knowledge you need to make informed decisions about saving, borrowing, and investing.
Two-thirds of American adults can’t answer all three correctly.
According to Pew Research, only 27% of Americans say they’re confident in their ability to create an investment plan to build wealth. Just over half feel confident they can create a budget or a plan to pay off debt.
These are the parents we’re expecting to teach financial literacy at home.
It’s not that they don’t care. It’s that they were never taught either. The same system that failed to teach today’s students failed to teach their parents a generation ago. And their grandparents before that. The gap isn’t new. It’s inherited.
You can’t teach what you don’t know. And when schools don’t fill the gap, the ignorance passes down.
Where People Actually Learn About Money
When researchers ask Americans where they learned about personal finances, the most common answer is family and friends. According to Pew Research, among adults who say they’re knowledgeable about personal finances, 49% say they learned a great deal or a fair amount from family and friends. That’s more than any other source.
Relatively few say they learned in school.
On the surface, this seems to support the “ask your parents” model. People do learn about money from their families.
But look closer and the picture gets more complicated.
The same data shows that Americans with higher incomes are far more likely to say they’re knowledgeable about personal finances than those with lower incomes. Seventy-two percent of adults in upper-income households say they know at least a fair amount about personal finances. For lower-income households, it’s 42%.
The gap isn’t because lower-income parents care less. It’s because they’re less likely to have the knowledge themselves. Financial literacy correlates with income, education, and access to financial services. Parents who have more exposure to financial concepts are better equipped to teach them. Parents who don’t, aren’t.
The PISA 2022 assessment found the same pattern internationally. Students from socioeconomically advantaged households reported discussing more financial topics with their parents than students from disadvantaged households. The exception was the family budget—disadvantaged students talked about that more often, probably because financial constraints made it unavoidable.
But when it came to topics like investing, spending decisions, and financial news? Advantaged students had more of those conversations. Their parents had more to teach.
Modeling Isn’t Teaching
My parents were proof that you can do everything right financially and still fail to pass it on.
They saved. They sacrificed. They lived within their means. They bought a house through years of discipline and hard work.
But they never explained why they made the choices they made. They never taught me how to think about money. They assumed the example would be enough.
It wasn’t.
Research on financial socialization confirms this isn’t unusual. Studies show that financial literacy “gets its start in the family”—children observe their parents’ habits and sometimes receive direct teaching. But observation and teaching aren’t the same thing.
A kid can watch their parents pay bills every month without understanding how the bills are prioritized. They can see a parent use a credit card without understanding the difference between paying in full and carrying a balance. They can know their family is “careful with money” without having any framework for applying that care to their own decisions.
Modeling gives kids a sense of what normal looks like. Teaching gives them tools they can use.
Most parents do the modeling. Far fewer do the teaching. And many don’t know the difference.
This Isn’t a Personal Failing
When young people struggle with money, the instinct is often to blame their upbringing. Why didn’t their parents teach them? Why didn’t they learn responsibility at home?
But that framing lets the real culprit off the hook.
Parents aren’t failing their kids. The system failed the parents first.
The generation now raising children grew up in the same schools that didn’t teach financial literacy. They faced the same absence of practical money education. They made the same kinds of mistakes, learned the same hard lessons, and now they’re expected to teach something they were never taught themselves.
Some figured it out along the way. Some had parents or mentors who filled the gap. Some learned through painful trial and error. But plenty of adults are still struggling with the same gaps in knowledge they had at 22.
Expecting them to teach their kids financial literacy is like expecting someone who never learned to swim to teach their children to swim. They might manage. But the odds aren’t good. And the kids who drown aren’t drowning because their parents didn’t love them.
They’re drowning because nobody taught anybody.
Schools Are Supposed to Be the Equalizer
Here’s why this matters beyond individual families.
Public education exists, in part, to level the playing field. To ensure that every child, regardless of their parents’ background or resources, has access to essential knowledge and skills.
We don’t assume kids will learn to read at home and skip English class. We don’t expect parents to teach algebra around the kitchen table. We recognize that some knowledge is too important to leave to chance—so we require it in schools.
But with financial literacy, we do the opposite. We leave it to families. And the result is predictable: kids from financially literate families get taught, and kids from families without that knowledge don’t.
The gap follows the same fault lines as every other educational inequality. Income. Race. Geography. Parents’ education level.
Schools could be the equalizer. A required financial literacy curriculum would ensure that every student, regardless of what their parents know or don’t know, graduates with the same foundational knowledge.
Instead, schools are absent. And the kids who need financial education the most—the ones whose parents are least equipped to provide it—are the ones least likely to get it anywhere.
The Cycle Repeats
I think about my own kids sometimes.
I know things now that I didn’t know at 22. I’ve learned about budgeting, about investing, about the difference between needs and wants. Trisha taught me. Experience taught me. Years of mistakes and recovery taught me.
But I had to learn it the hard way. And I came close to not learning it at all.
If Trisha hadn’t grown up in a household where her mom taught this stuff explicitly, neither of us would have had the knowledge to pass on. Our kids would be starting from scratch, just like I did. Just like my parents did.
That’s how the cycle works. Financial literacy passes down in families where it exists. In families where it doesn’t, the gap persists. Generation after generation, waiting for someone to break the chain.
Some families get lucky. Most don’t.
“Ask Your Parents” Isn’t an Answer
The assumption that families will teach financial literacy only works if two things are true: parents have the knowledge, and parents have the tools to teach it.
For most American families, one or both of those conditions is missing.
Some parents weren’t taught and don’t have the knowledge to pass on. Some parents have the knowledge but don’t know how to translate it into lessons their kids can apply. Some parents are so consumed with financial stress themselves that teaching their kids about money feels impossible.
None of that is their fault. The system that didn’t teach them can’t reasonably expect them to fill the gap for the next generation.
“Ask your parents” isn’t a strategy. It’s an excuse. It’s what we say when we don’t want to take responsibility for teaching something that matters.
And every year we keep saying it, another generation graduates unprepared—not because their families failed them, but because we decided that financial literacy was someone else’s job.
It doesn’t have to be this way.
Schools can teach this. Every state can require it. Every student can graduate with the foundational knowledge they need to make informed financial decisions.
The question is whether we’re willing to stop passing the buck to families who were never given the tools to catch it.
Sources
- Lusardi, Annamaria, and Olivia S. Mitchell. “The Economic Importance of Financial Literacy: Theory and Evidence.” Journal of Economic Literature, 2014
- Pew Research Center, “Roughly Half of Americans Are Knowledgeable About Personal Finances,” 2023
- OECD, PISA 2022 Results: How Financially Smart Are Students?
- S&P Global FinLit Survey, “Financial Literacy Around the World,” 2015
- LeBaron, Ashley, et al. “Parental Financial Education During Childhood and Financial Behaviors of Emerging Adults.” Journal of Financial Counseling and Planning, 2020