Financial Literacy Month: How It Started and Why It Matters

Why Financial Literacy Matters—And What We Can Do About It

Financial literacy isn’t just a skill—it’s a necessity. Yet for many years, young people across the United States have entered adulthood without the tools they need to make smart financial decisions. This issue, identified as early as the 1990s, has sparked a growing movement to raise awareness and educate the next generation. Here's a closer look at how Financial Literacy Month came to be, the government’s involvement, and why financial literacy matters more than ever.

The Rise of Youth Financial Literacy Day

In the 1990s, a clear gap in financial education began to draw national attention. Young people were graduating high school—and even college—without a basic understanding of personal finance, from managing a bank account to understanding interest rates. Recognizing the long-term dangers of this, the National Endowment for Financial Education (NEFE) stepped in and began promoting Youth Financial Literacy Day. The initiative provided tools, resources, and a rallying point for encouraging better money management among teens and young adults.

By 2000, the Jump$tart Coalition for Personal Financial Literacy expanded this effort, turning it into a full month of awareness activities now known as Youth Financial Literacy Month. Since then, many organizations have joined the cause, offering informational resources, hosting workshops, and conducting events to empower young people with critical financial knowledge.

When the Government Stepped In

It wasn’t just youth who were struggling. As more data emerged, it became clear that financial illiteracy was a widespread problem across all age groups in the U.S.—and it was having serious consequences. In response, the U.S. Senate passed a resolution recognizing the importance of financial education. The resolution, introduced by Senator Daniel Akaka, officially designated April 2004 as Financial Literacy Month, stating: “The Senate designates April 2004 as Financial Literacy Month to raise public awareness about the importance of financial education in the United States and the serious consequences that may be associated with a lack of understanding about personal finances.”

Read the full resolution here on Congress.gov.

The Cost of Financial Illiteracy

Fast-forward to 2024, and the consequences of inadequate financial education are still very real. According to a recent survey conducted by the National Financial Educators Council (NFEC):

• 50% of the 1,200 respondents reported losing $500 or more due to lack of financial knowledge.

• 15% lost over $2,500.

These numbers may even underestimate the broader economic impact. Financial illiteracy can lead to a variety of costly mistakes, including:

• Lack of emergency savings

• High credit card debt and interest charges

• Late payments on bills or loans

• Account misuse leading to overdraft or ATM fees

• Missed opportunities to earn interest or invest wisely

Gaining Financial Literacy: Where to Start

The good news? Financial literacy is something anyone can improve with the right resources and mindset. Whether you’re a student, parent, or educator, here are a few effective ways to build your knowledge:

• Set a budget and track your spending habits

• Read personal finance books written by credible authors

• Follow blogs and podcasts dedicated to financial education

• Attend local workshops or online informational sessions

The Bottom Line

Financial education isn’t just about balancing a checkbook or saving for retirement—it's about giving people the tools to make informed, confident decisions that shape their future. As initiatives like Financial Literacy Month continue to grow, we can all play a role in spreading awareness and promoting financial empowerment for the next generation.

Sources:

Akaka, Daniel. “Text - S.Res.316 - 108th Congress (2003-2004): A Resolution Designating April 2004 as “Financial Literacy Month.”” Congress.gov, 2025, www.congress.gov/bill/108th-congress/senate-resolution/316/text. Accessed 1 May 2025.

Bennett, Karen. “How a Lack of Financial Literacy Could Be Costing You Thousands.” Bankrate, 17 May 2023, www.bankrate.com/banking/how-lack-of-financial-literacy-could-cost-thousands/.

Field, Bill. “Financial Illiteracy Costs: Causes, Consequences | NFEC.” NFEC, 2016, www.financialeducatorscouncil.org/financial-illiteracy-costs/.

NEFE. “National Endowment for Financial Education | NEFE.” Nefe.org, 2019, www.nefe.org/.

Stoll, Trevor. “Financial Literacy Month.” NFEC, www.financialeducatorscouncil.org/financial-literacy-month/.

Tax Project Team. “National Financial Literacy Month.” Tax Project Institute, 3 Apr. 2025, taxproject.org/national-financial-literacy-month-explainer/. Accessed 1 May 2025.