Counting the Cost: Why Financial Illiteracy is America’s Silent Epidemic

Abstract

Financial literacy is an essential skill that has power over an individual's decision-making, long-term economic stability, and national economic health. This paper explores financial literacy trends specifically in the United States, with a focus on the period following the 2008 financial crisis till our present day. It investigates how widespread knowledge gaps have relation to negative behaviors resulting in debt, savings, and investment, particularly among young adults, minorities, and low-income households. The study uses state-level mandates on financial education and analyzes their effectiveness in improving economic outcomes. Drawing on data from national surveys and peer-reviewed research, the paper highlights both the progress made and the challenges that remain in the path ahead. It concludes with policy recommendations targeted towards expanding access to financial education and fostering greater financial equity all throughout the United States.