WHEN PARTS OF THE FEDERAL GOVERNMENT SHUT DOWN toward the end of last year, many Americans went without a paycheck or two. Crisis followed.
For a large swath of America, it was probably not a surprise that so many people became so vulnerable, so quickly. If their income was put on pause, or an unforeseen expense dropped into their lives, they'd be in a similar bind. Forty percent of people in the U.S. don't have $400 set aside for an emergency, according to the Federal Reserve. Additionally, 25 percent of Americans have nothing saved for retirement.
APRIL IS FINANCIAL LITERACY MONTH, and policy experts, economists, business people and teachers are debating the extent to which personal finance education can reverse these grim statistics. Meanwhile, the ways in which people think about how we can become financially well are increasing and evolving.
In 2015, a study published in the Journal of Human Resources found little evidence that education intended to improve people's financial decision-making is successful. "Policies to expand high school financial literacy education ... may be misguided," the researchers concluded.
Yet other experts argue that lessons on lending and credit are just as important as English or science classes — and the only chance to reach every child before he or she goes on to make life-defining financial decisions.
"The finding is not that we shouldn't spend on financial education — we should actually try to make it better," said Annamaria Lusardi, the director of the Global Financial Literacy Excellence Center at George Washington University.
Financial educators are also confronting their limitations in a society where wealth and income are so unevenly divided, said Billy J. Hensley, the president and chief executive officer of the National Endowment for Financial Education.
The three richest people in the U.S. — Bill Gates, Jeff Bezos and Warren Buffett — now own more wealth than the bottom half of the American population. As medical, childcare and college costs take off, wages have sputtered. The median family income, after accounting for inflation, was $59,039 in 2016, little different than in it was in 2000 ($58,544).
In a new CNBC Invest In You and Acorns Savings Survey, more than a third of respondents said they don't make enough money to meet their needs and save.
"People may be blocked out of financial institutions, or their income is too low, and it's hard to get that extra 2 percent into a retirement account," Hensley said. "You have to be able to apply what you're learning."
STILL, BETWEEN THE RAPID RISE in borrowing among college students and the fact that workers are increasingly tasked with saving for their retirement, financial education is more essential now than ever, Lusardi said.
"There are these huge challenges in front of us," Lusardi said. "We need to be better equipped."
Efforts to improve the curriculum in schools are underway.
The George Washington University School of Business recently launched an online resource, Fast Lane, which provides certain people, including students and policy makers, specific directions for implementing high-quality financial literacy in their schools. Checkyourschool.org is another new project, by the non-profit Jump$tart Coalition, which invites parents and students to report how their school is faring when it comes to personal finance education.
"A lot of parents are very engaged and they're natural activists," said Laura Levine, president and CEO of the Jump$tart Coalition. "We want them to start the conversations at their school about introducing or augmenting financial education."
Recently, more states are leading the effort to bring lessons on taxes and debt into their schools.
Alex Todd has taught a personal finance class at Elizabethtown High School in Kentucky for more than two decades. After the 2008 financial crisis, he began to hold more of the courses. "Parents said they wished they'd had this class in high school," Todd said.
Last year, Todd worked with state representatives to pass legislation that will require every student in Kentucky who enters high school in 2020 to enroll in a course like his, which teaches students how to be skeptical consumers and smart savers.
A recent study found that in states where personal finance education is mandated, students go on to make better decisions about how to pay for college. For example, they don't take on as much private debt.
"If every state in America would spend a little bit of time teaching financial literacy to high school students, we can begin to win a battle we've been losing for the last 40 to 50 years," Todd said.
IMPROVING TECHNOLOGY HAS ALSO made its way into the financial literacy field.
Practical Money Skills, a financial literacy platform created by Visa, includes interactive tools such as Financial Football, a 3D game in which players learn personal finance lessons as they try to score touchdowns.
Financial literacy start-up Money Experience has created a simulator in which players need to make all of the various choices that crop up throughout life. Whom will they date? What college will they attend? When will they start saving for retirement?
"We're trying to express to students that every decision you make has a financial component," said Jeet Singh, founder and CEO of Money Experience. 'We don't hide the consequences."
The innovation is not just for kids. Researchers at Stanford University are leveraging virtual reality to show people their aging avatars, in the hopes that they develop empathy for their 70- or 80-year-old self.
"People view their future selves like a stranger," said Sarah Raposo, a researcher at the Stanford University's Life-span Development Laboratory. "If we could help people understand they're preparing for themselves and caring for themselves, they might be more motivated to learn about financial planning."
IT'S NEVER BEEN SO EASY TO FIND INFORMATION about paying off debt or investing. There are personal finance books, podcasts, television shows, YouTube series, blogs, news sites and Meetup events. The Reddit personal finance channel, in which people detail their financial circumstances and ask for advice, has more than 13.5 million subscribers.
"The personal finance education space is getting a lot more inclusive and friendly," said Chris Browning, who hosts the podcast Popcorn Finance.
Browning created the series on tax tips and side hustles back in June of 2017 and releases an episode a week. Around 1,500 people currently listen in, he said, often while they're driving to work or cleaning up the house.
"Talking about money gets kind of intimidating and pushes people away," Browning said. "I try not to use a lot of jargon.
"People tell me they appreciate that it's easy to understand."
As personal finance advice proliferates, it also grows harder for people to pick out what's actually good for them, said Hensley, the president of the National Endowment for Financial Education.
"There's a lot of money to be made off of someone's decision," Hensley said. "Getting high-quality, vetted information is a challenge."
TO THAT POINT, companies are moving beyond education, and streamlining the financial decision making process for their employees.
Up until recently, if an employee did drop out, that would be the end of their workplace retirement savings unless they signed up again. But now, some companies are auto-enrolling their workers more than once a year. (Nearly 10 percent of Prudential's retirement clients do so today).
Prudential also now offers a way for workers to build up an emergency savings account at their jobs. The savings is an after-tax contribution that allows employees to automatically put money away in low-cost investments such as money market or so-called stable value funds.
"Education is important because people need to understand the context of their financial decisions," said Vishal Jain, the head of financial wellness strategy and development for Prudential. "At the same time, its important to guide people to action."
Steve Vernon, a retirement savings expert, also believes that information sessions on saving and spending can only go so far.
He is pushing for companies to offer a retirement income menu, in which workers could decide between a number of ways to receive their savings on a regular basis, say monthly or quarterly, as opposed to in one lump sum when they exit the workforce.
Vernon believes it's unreasonable for companies to expect their employees to turn into an investment manager in their retirement. "That's a complex task that most ordinary workers are not equipped to do on their own," he said.
"You can educate people until you're blue in the face," Vernon added. "We need more."
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.