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“As important as reading and math and social studies and science, I think today more than ever financial literacy has to be part of that,” [1]

- Arne Duncan, Secretary of Education

50% of American Have Less than A Month of Emergency Savings [2]

Financial Literacy and Retirement

33% of adults do not put any part of their annual household income toward retirement. [3]

The past thirty years has brought on a trend, where individuals are increasingly responsible for their retirement planning. To make educated decisions about saving for retirement, people need a basic understanding of an increasingly complex financial landscape. Sadly, many seniors reach retirement with little or no savings and find it difficult to make ends meet on social security alone, causing many to fall prey to the lure of credit cards. In fact, over the past 20 years, the percentage of seniors over 65 filing for bankruptcy has

risen a startling 177%, with much of their debt being owed to credit cards. [4]

In a recent study, the majority of people over age 50 could not perform simple economic calculations, and lacked the basic knowledge of financial concepts like compound interest, and the basics of risk diversification[5]. And when asked about the difference between stocks and bonds, the working of mutual funds and basic asset pricing, the results were even scarier [5]. Not understanding these basic financial concepts can be linked to individuals not planning for retirement, as well as lack of participation in the stock market and poor borrowing behavior. The key for those wanting a financially sound future is to become financially literate today.

Social-security-alone [6]



Try your hand and see how well you do.

Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

  1. More than $102
  2. Exactly $102
  3. Less than $102
  4. Do not know

Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account?

  1. More than today
  2. Exactly the same as today
  3. Less than today
  4. Do not know

Do you think that the following statement is true or false?

“Buying a single company stock usually provides a safer return than a stock mutual fund.”

  1. True
  2. False
  3. Do not know

Show the correct answers

This basic test was created by Annamaria Lusardi, a Professor of Economics at Dartmouth University. Lusardi used this test to study the state of finanial literacy in the United States and it is now used widely.

The findings of Lusardi’s study are startling, and have serious implications. Most notably, only half of respondants 50 years or older answered the first two questions correctly. A mere one third of that same group got all three questions right. The demographics that scored lowest were women, African Americans, and Hispanics.

These three questions test very basic areas of financial literacy. A lack of knowledge in these topics perpetuates a cycle of poverty. [6]

The check cashing banking scheme

28 million Americans have no bank account.

Twenty to thirty years ago many traditional banks fled lower-income neighborhoods and in their wake a wave of checking cashing and payday lenders sprouted up. These check cashing places became so popular that they now outnumber the number of McDonalds and Starbucks locations, combined2.

At first glance these institutions may seem harmless, but to those that are without a bank account or are struggling with financial literacy, they can be an

easy way to lose money. Many customers shy away from banks because of their hidden fees, and instead put their trust in check cashing places because of their easy-to-understand fees that come with every single service. While the fees might be easy to understand, they are not cheap. On average, customers are charged a 2-4% fee to cash a check, and payday loans come at a price that is 30 times the annualized interest rate of a typical credit card – all of these fees can add up to $40,000 over the lifetime of a customer3. When looked at from this angle, it is hard to see these businesses as anything other than predators that are feeding on the paychecks of people that could use a lesson in financial literacy. [7]

20% African American and Latino Households do not have a bank account. [7]

The Case for Financial Education in our Schools

Only 15 of the 50 states require a course that includes personal finance, and only 13 states require students to complete a personal finance course to graduate [8].

A unified financial literacy curriculum is not taught in the majority of our nation’s schools. While there are standardized requirements for a proficiency in the majority of basic subjects like English, History, and Math, there is currently no standard when it comes to teaching our children how to be financially literate. The barriers to teaching financial literacy in school are threefold: there is a lack of well-trained

teachers knowledgeable in the subject, there is little to no funding to pay for the additional curriculum, and finally there is no national standard of what should be taught as most decisions about curricula are done at the state and local level.

The evidence that the current status quo of not including financial literacy as part of basic education is everywhere we look in today’s economy. Recent studies have shown that bankruptcies amongst the 18-24 year old demographic have increased 96 percent in 10 years [8]. Not having a basic knowledge of savings, loans, credit and retirement funds is positively linked to excessive debt. Without the addition of financial literacy to the national curriculum, our nation’s youth are missing out on critical knowledge needed to succeed in the real world.

This month, CharitySub is doing its part to encourage financial literacy. Through educational support to both the old and young alike, we can give everyone the building blocks of a sound financial future and eradicate financial illiteracy together!

5 Easy Ways You Can Help


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  4. Teach a child about Financial Literacy.
  5. Support our CharitySub vetted partners.

Let’s spread financial literacy together.

Operation HOPE

Economic Education & Empowerment
Operation HOPE

Operation HOPE’s educational programs teach students how to have a conversation in the language of money so they can be confident and empowered as they take control of their financial future.


Financial Literacy for DV survivors

W!SE programs teach the basic personal finance with a special focus on topics of interest to domestic violence survivors. They teach survivors to be financially independent so they can thrive, both emotionally and financially, in their new life on their own.

World of Money

Youth Financial Literacy Programs
World of Money

WorldofMoney.org works in the New York Tri-State Area, providing underserved youth with a sound financial foundation. They help children create a positive relationship with money, enabling them to be self-reliant financially in the long run.