Nevin's Data "Points"

  A new report claims that Americans lost nearly $1,000 last year due to a lack of financial literacy — and while that was less than the year before, the data seems a little . . . squishy. The  report  comes from the National Financial Educators Council, [i]  which has been conducting this particular survey for several years now. [ii]  They drew their conclusion from a survey of some 1,200 American adults between Dec. 24 and Dec. 28 who responded to the question,  "During the past year (2025), about how much money do you think you lost because you lacked knowledge about personal finances?" Now, I’ve previously commented on the inherent unreliability of surveys based on self-reporting of financial matters — and this one, taken in the midst of the holiday season (and the aftermath of Christmas unwrapping) is surely no exception. Moreover, year-over-year comparisons of COMPLETELY different groups of people surely can’t be considered a reliable-trends benchmark...

   It’s an odd thing to admit in Financial Literacy Month — but I’ve been a financial literacy skeptic.  Not always, of course. Once upon a time I was one of those industry voices decrying the burden placed on employment-based retirement plans. Employers (and advisors) who — in the course of a 25-minute workshop — had to convey the range of concepts required to make knowledgeable investment decisions to an audience of adults who had never been exposed to any of that prior to that session. Considering all the (relatively) useless things that ARE mandated in school curriculums, some basic finance concepts seemed like a pretty reasonable “ask.” State Steps And though it’s been a long time coming, a number of states [i]  now do require students to take a financial literacy course for high school graduation — and that number continues to climb. That said, what constitutes complying with that requirement — varies. And, if it’s like a lot of the classes I was required to ta...

Back in the middle of the pandemic, my then 91-year-old mother was presented with two options—one a specialist recommended, the other favored by her trusted general practice physician. And of course, it was to be…her decision. This kind of thing happens all the time in the medical field where such things often seem as much art as science, with a myriad of factors to consider, not the least of which is the skill and experience of the medical professionals putting forth their recommendations. Not that it’s limited to life-and-death decisions. Indeed, it’s the kind of decision with which we’re often presented; when that annual auto inspection detects a hitherto undetected major repair need, when that leaky toilet repair uncovers some long-standing, but unobserved water damage, when that last minute call to fix a water heater or air conditioner reveals that it might—but might not—last the season. Those things routinely involve experts of one sort or another turning to us re...

April is, of course, National Financial Literacy Month—and for as long as I can remember, the retirement industry has been talking about the need for some kind of personal finance education in public schools—there’s just one problem. First off, there actually  are  such programs already in existence at the moment. Half the country (25 states) now requires  high school students to take a course in economics, and 21 states now require high school students to take a course in personal finance. Granted, they may still be too well dispersed to show up on your normal “radar”—but they’re growing in number and dispersion.  Those efforts [i]  notwithstanding—and while there’s some anecdotal evidence that this has helped (some) with regard to better decisions with regard to college financing—I’ve little sense that it’s moved the needle much with regard to participant knowledge or financial decision making (feel free to disagree in the comments below, if you...

Financial literacy has long been touted as something of a “silver bullet” in helping workers make better financial decisions – and now there’s a call to make it a mandatory employment offering.  Now, we all know that lots of workers get their first (and for many only) exposure to financial markets via their workplace retirement plan. Ditto their only education about investing, diversification, or even mutual funds. Little wonder that those who are tasked with delivering those lessons have long championed the need for some basic level of financial education in school curricula. The issue was most recently raised earlier this year in a paper titled “ Defined Contribution Plans and the Challenge of Financial Illiteracy .” Authored by Jill Fisch of the University of Pennsylvania Law School, as well as financial literacy icon Annamaria Lusardi and Andrea Hasler from George Washington University School of Business, the paper compares the relative financial acumen of w...

I recently had the opportunity to attend The National Financial Capability Study Roundtable, where a variety of researchers (including EBRI’s Sudipto Banerjee) presented, discussed, and challenged a variety of research papers on topics ranging from financial literacy and retirement planning to financial advice, and from financial literacy and financial behavior to “Prohibition, Price Caps and Disclosure”.   Taken as a whole, the day’s discussions focused on ways to better understand and measure the factors that appear to influence individual behaviors regarding their finances.   Simply stated, financial literacy is generally described as the ability to understand finance.   More recently, some have begun to focus on financial capability 1 .   Research has shown that people with higher levels of financial literacy approach retirement with much higher levels of wealth.   However, a growing body of research also suggests that most Americans have limited kno...