I have letters after my name. CPA, or Certified Public Accountant. I’ve held that license in influential corporate finance roles for many years. I’ve worked at one of the largest accounting firms in the world, at an investment bank in New York and London, and at two of the largest insurance companies in the world. I’ve helped businesses navigate complex tax situations, manage their books, and make strategic financial decisions.
I’m not sharing this to impress you. I worked hard to get where I am professionally. My financial health eventually followed a similar path, but it didn’t start that way.
When I was 22 years old, fresh out of college with an accounting degree, I had no idea how to manage my own money.
I’m not exaggerating. I had studied advanced classes in accounting, finance, and economics. None of it mattered. I ended up living paycheck to paycheck. I had debt piling up due to a poor car buying decision and numerous maxed out credit cards. I missed several auto loan and credit card payments. And sadly, my credit score reflected it. Some of my tuition payments to my college bounced, risking my college dropping me from classes on several occasions. I’d sit there in the last few days before payday, unable to do anything, because my account was empty or in overdraft.
Here’s what makes this story strange: I wasn’t financially illiterate by the usual definition. I could read a balance sheet and income statement. I understood debits and credits. I knew how money moved through a business. I had studied accounting for years at one of New York’s best business schools.
Looking back, I can see how unprepared I was to handle my financial life as a young adult. There were so many decisions I was called on to make, and I fumbled every one of them. I didn’t know the difference between a need and a want and spent impulsively. I didn’t have a budget in place so I ran out of money before the next payday. I didn’t understand how to prioritize debt versus saving so I took out a very high interest auto loan. I couldn’t evaluate a credit card offer so I accepted every credit card offer I received. I had no framework for making the decisions that actually mattered in my own life.
I had an accounting degree. I understood financial concepts in theory. But clearly, something was missing.
So what is financial literacy, really?
The Gap Between Technical Knowledge and Practical Competence
When researchers try to measure financial literacy, they usually ask people three basic questions:
- Interest rate calculation: If you have $100 in a savings account earning 2% interest per year, how much will you have after five years?
- Inflation: If inflation is running at 3% per year and your savings account earns 2%, are you gaining or losing purchasing power?
- Risk diversification: Is buying a single company’s stock safer than buying a stock mutual fund?
These aren’t trick questions. They’re fundamental concepts you need to understand if you’re going to make informed decisions about borrowing, saving, or investing.
And yet, only about 35% of Americans can answer all three correctly.
I could have answered those questions when I was 22. I had an accounting degree. But I was still drowning financially, because knowing those concepts in theory and applying them in practice are two completely different things.
What Financial Literacy Actually Looks Like
The Organisation for Economic Co-operation and Development (OECD), which runs international student assessments, defines financial literacy this way:
“Knowledge and understanding of financial concepts and risks, as well as the skills and attitudes to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts.”
That last part matters: to make effective decisions.
Financial literacy isn’t just about knowing what compound interest is. It’s about recognizing when compound interest is working for you (in a savings account) versus when it’s working against you (on a credit card balance you’re carrying month to month). Or a student loan where the balance owed never seems to reduce after making the minimum payment.
It’s not just about understanding inflation in the abstract. It’s about realizing that the “zero percent financing” offer on that car might actually cost you money if you could have invested the cash and earned a return. Or that cash sitting in a checking account might feel like “savings,” but with inflation, you’re actually losing purchasing power.
It’s not just about knowing that diversification reduces risk. It’s about understanding why putting your student loan refund check into a single stock or cryptocurrency your roommate told you about is a bad idea.
Financial literacy is the ability to see the financial implications of the decisions you’re actually facing and to make choices that align with your long-term interests, not just what feels right in the moment.
The Skills No One Taught Me
Looking back, here’s what I needed to know when I was starting out, and what I had to figure out the hard way:
Understanding that financial decisions have long-term ramifications. I made several financial decisions before I was 25 that still affect me decades later. I wish someone had taught me how choosing not to budget, save, or invest early on would compound over time.
Distinguishing needs from wants. This sounds simple, but it’s foundational. My wife, Trisha, grew up in a household that talked about money practically. She taught me to pause before spending and ask: Do I need this, or do I just want it? That one shift changed everything for me.
Understanding the true cost of debt. I knew how interest rates worked in theory. But I didn’t viscerally understand what it meant to carry a balance on a high-interest credit card, or how much that car loan was really going to cost me over five years.
Evaluating financial products. When someone offers you a credit card, a loan, or an insurance policy, how do you know if it’s a good deal? What should you be looking at? What questions should you be asking?
Prioritizing financial goals. Should I pay down debt or build an emergency fund first? Should I contribute to my 401(k) or focus on student loans? These aren’t academic questions. They’re decisions that have real consequences.
Planning for the future while managing the present. How do you balance saving for retirement (which feels abstract and far away) with paying rent, managing debt, and dealing with unexpected expenses (which feel urgent and immediate)?
How to invest for long-term growth in the financial markets. Do I need a financial planner? How do I get started? How do I play the long game and not get swayed by short-term volatility?
None of this was covered in my accounting classes. None of it was taught in high school. I had to piece it together through trial and error, mistakes, and eventually, help from someone who actually understood how personal finance worked.
The Problem With How We Think About Financial Literacy
Here’s what bothers me most about the way financial literacy is usually discussed:
We treat it like it’s optional. Like it’s something you can pick up along the way if you’re interested. Like it’s a specialized skill rather than a basic requirement for functioning in modern society.
But financial decisions aren’t optional. You can’t opt out of dealing with money. You have to sign a lease or get a mortgage. You have to decide whether to take out student loans and, if so, how much. You have to choose a health insurance plan. You have to figure out what to do with your paycheck.
And if you make those decisions without understanding the systems you’re navigating, you’re going to make costly mistakes. Not because you’re irresponsible or lazy, but because no one ever taught you the system.
What I Wish Someone Had Told Me
If I could go back and talk to my 18-year-old self (the one about to head off to college with access to student loans and credit cards), here’s what I’d say:
You’re about to start making financial decisions that will affect you for decades. Some of those decisions will be small. Some will be huge. And almost no one is going to explain how the system works.
You’re going to be offered credit cards with terms you don’t fully understand. You’re going to sign loan documents without really grasping what you’re agreeing to. You’re going to make spending decisions based on what feels affordable right now, not what it will cost you over time.
And it’s not your fault that you don’t know this stuff yet. But it will become your problem.
So before you borrow money, before you sign anything, before you make a big purchase, stop. Ask questions. Find someone who understands this stuff and can walk you through it. Because the mistakes you make now will follow you for years.
I didn’t have that conversation. Most people don’t. And that’s the problem.
Financial Literacy Is a Life Skill, Not a Specialty
You know what financial literacy really is?
It’s the ability to make informed decisions about money in the context of the life you’re actually living.
It’s not about becoming an expert in investing or tax law. It’s about understanding enough to avoid costly mistakes, to recognize when you’re being sold something that doesn’t serve your interests, and to make choices that move you toward stability instead of stress.
It’s a life skill. And for some reason, we’ve decided as a society that it doesn’t need to be taught.
That’s what this project is about. Not just offering tips or advice, but asking the harder question: Why is this knowledge treated as optional when the decisions it informs are mandatory?
If you’ve ever felt lost trying to figure out your finances, if you’ve ever signed something you didn’t fully understand, or made a choice that seemed fine at the time but cost you later, you’re not alone.
And it’s not because you weren’t smart enough or didn’t care enough.
It’s because no one taught you. And that’s a problem we need to fix.
Next up: Why learning this stuff before you need it isn’t just helpful. It’s essential. We’ll look at why timing matters and what happens when young people are expected to make high-stakes financial decisions without the knowledge to back them up.
Sources
∙ Lusardi, Annamaria, and Olivia S. Mitchell. “The Economic Importance of Financial Literacy: Theory and Evidence.” Journal of Economic Literature, 2014
∙ Organisation for Economic Co-operation and Development (OECD), PISA 2022 Financial Literacy Framework