In an era marked by economic fluctuations and evolving financial landscapes, the importance of financial literacy cannot be overstated.  

To mark National Financial Literacy Month, the personal finance website WalletHub recently released its report on the Most and Least Financially Literate States in 2024. Missouri ranked in the middle at no. 24.  

To determine the rankings, WalletHub conducted an analysis of financial education programs and consumer habits across all 50 states and the District of Columbia. The study looked at 17 key metrics such as the share of adults with rainy-day funds. 

Key takeaways from analysts include: 

• Too many Americans still lack comprehensive financial literacy, which can lead to negative consequences like lowering the amount of lifetime wealth.
  

  

• States should prioritize teaching financial literacy from a young age. 

According to Dr. Jeff Jones, head of the department of finance, economics and risk management at Missouri State University, it is difficult for people to become financially sustainable without an understanding of financial literacy. 

He sheds light on how to manage personal finances amidst the challenges of the current economic environment, characterized by significant inflation.  

Tips for managing personal finances 

During periods of heightened inflation, consumers should be prepared to incorporate financial flexibility into their budgets.  

“This may mean cutting back on discretionary spending (dining out, entertainment, etc.) to provide a cushion for potential increases in non-discretionary items (food, housing, utilities, insurance, etc.),” Jones said.  

He adds the most reliable way to build wealth is by consistently spending less than you earn and investing the surplus into assets expected to generate favorable long-term returns.  

Teaching kids financial know-how 

Parents play a pivotal role in equipping their children with essential financial knowledge from an early age. Jones stresses the importance of talking about money with kids “so they can learn money lessons when the stakes are lower.”  

“The fundamental economic problem is people have unlimited wants and limited resources. The first lesson to teach kids is the difference between a want and a need,” Jones said. “The second lesson is to instill how many hours a person might have to work (opportunity cost) to afford a certain item or experience.”  

Furthermore, encouraging children to have “skin in the game” fosters accountability and cultivates financial responsibility, essential traits for navigating adulthood successfully. 

Promoting financial education in schools

Fundamental lessons in being financially savvy should begin as early as elementary school with relevant activities, such as playing a need vs. want game or creating a budget to buy items for an imaginary party. These lessons can then be reinforced by parents at home.  

At the high school level in Missouri, students must complete a half-credit standalone personal finance course for graduation. Missouri is one of only 17 states that require personal finance coursework in high school. Courses cover things like financial decision making, earning income, buying goods and services, saving, using credit, protecting and insuring, and financial investing. 

“Universities can reinforce the concepts learned in high school by providing students access to seminars or events related to understanding personal finance issues,” Jones said.  

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