1. Understand that everything changes
- The economy changes. What works in some economic conditions may not work in others. In the first few years after college, I made the mistake of investing my entire 401(k) in my company's stock. After the internet bubble, I watched it decline by over 70 percent. I learned about diversifying your investments — and that what may seem to make sense for you right now might not turn out to be a smart financial decision in 10 years.
- The financial industry changes. The advent of defined-contribution plans like 401(k)s and IRAs, and the decline of defined-benefit pensions, created a need for far greater financial literacy because a person's financial future is now completely in your own hands. New products like robo-advice and personal financial management apps have created more tools but also more confusion.
- Your financial situation changes. The lessons that might have served you at one point in your career won't necessarily work later on. The techniques that helped you pay off student debt may not be the best way to manage your money when you become more affluent, for example. Even the type of mortgage that makes most sense can be different if you're just planning to live somewhere for a few years compared to the one that's best when you've found your "forever" home
2. Start teaching financial literacy in college
The conventional wisdom on financial literacy advocates starting at high school age. That's a mistake. College is the best time to begin learning in-depth about finances.
Financial education in high school is rarely applicable to students' actual lives and, therefore, often falls on deaf ears. By contrast, in college students start encountering real-life situations and tangible financial problems to work through. It can be the first time students use their own credit or debit cards, or pay rent.
The stakes are high, too: Student loans, if not handled properly, can haunt borrowers for years. Currently, many students mistakenly believe that their college loans will be forgiven – as many as 50 percent, according to a survey by LENDedu.
Colleges have the responsibility to help young adults begin their financial lives on the right foot. Don't forget: Many employers check credit ratings when people apply for jobs.
3. Never stop learning
College may be the best time to start developing financial literacy, but your education can't end there. At various points in your life, you may need to learn how to decrease credit-card debt, or to save for retirement, or to refinance your home.
Americans need a way to find the right answers at the right time, and those answers should be accurate, accessible and easy-to-understand.
Financial Literacy Month could spread the word about where to go for coherent, reliable financial guidance and underline how important it is to have. After all, true financial literacy is building understanding from the ground up.
"David Siegel is the CEO of Investopedia, a leading online source of timely, trusted and actionable financial information for every investor. He is also a professor at Pace University and Columbia University where he teaches venture capital, entrepreneurship and strategic management courses."