shares the same base of knowledge and experience.168 Yet few studies discuss at length the
inequality inherent in asking the financially illiterate to teach their children financial skills. Most
people that realize they need to educate themselves in financial concepts are already smarter than
the average consumer.169 These parents are also already passing more financial knowledge on to
their children by virtue of modeling sound financial decision-making.170 For less knowledgeable
parents, this is essentially asking them to learn what “they don’t even know that they don’t
This is particularly troubling when one considers the statistics regarding financial
illiteracy. If approximately half of all Americans struggle to earn enough to cover their monthly
expenses, and most earn a “C” average at best when their financial know-how is put to the test,
those same people should not be expected to teach their children financial concepts.172
Essentially, parents who do not understand personal finance and basic economics are simply not
going to be able to teach their children those concepts.173 A person cannot teach something he or
she does not know. Given that the majority of high school students are failing financial literacy
tests,174 it would seem that they are not learning these concepts from their parents or schools.
Moreover, traditionally marginalized segments of society, such as low-wage earners, African-Americans, Hispanics, women, and the undereducated, experience the highest levels of financial
illiteracy compared to other cultural groups, thus perpetuating the economic marginalization of
already culturally marginalized youth.175
When faced with the daunting task of teaching foreign financial concepts, many parents
choose to leave their child’s financial education to society and experience.176 The problem with
allowing an individual’s life experience to serve as the sole or primary teaching tool to gain
financial literacy is that our system of credit is unforgiving, and some mistakes—like mountains
of student loan debt—can take years or a lifetime to recover from, if one can recover at all.177
The result is a life of financial instability and a lingering inability to valuably participate in the
The family is a very important agent of socialization for both factual and emotional uses of money (Rettig
1983). Parents can influence the development of consumer behavior in their children both directly and
indirectly. Family mediates the effects of other socialization agents and family communication processes play
an important role in this mediation process (Moschis 1985). Parents are the main source of financial knowledge
(Hira, Loibl, & Schenk Jr. 2007). Parents are also the primary influence on the way children handle money,
particularly their attitudes toward saving (Clarke et al. 2005). Children learn financial management behavior
through observation and participation and through intentional instruction by socialization agents (Rettig and
Mortenson 1986). Several possible socialization agents include family (parents, siblings, spouses, etc.), peers,
school, the workplace, media, and culture.
Id. (citations included in original).
168 See FORD & CROWTHER, supra note 26, at 184 (“Men are not equal in mentality or in physique. Any plan which starts with the
assumption that men are or ought to be equal is unnatural and therefore unworkable.”).
169 KIYOSAKI & LECHTER, supra note 1, at 13.
171 Noam Chomsky & David Barsamian, They Don’t Even Know That They Don’t Know, in KEEPING THE RABBLE IN LINE:
INTERVIEWS WITH DAVID BARSAMIAN 33, 35 (1994).
172 PRESIDENT’S ADVISORY COUNCIL ON FIN. CAPABILITY, supra note 4, at 3.
173 Id. (“Low- and moderate-income families, minority households, and certain persistently under-resourced communities are likely
lacking knowledge, experience and access to share with the next generation. The challenges in such communities are great and
multifaceted, and solutions must address complex needs.”); Austin, supra note 67, at 1235-36.
174 PRESIDENT’S ADVISORY COUNCIL ON FIN. CAPABILITY, supra note 4, at 3; Lusardi & Mitchell, supra note 47.
175 See FINRA INVESTOR EDUC. FOUND., supra note 12, at 5 (describing the groups identified as marginalized).
176 See generally KIYOSAKI & LECHTER, supra note 1 (detailing the importance of a sound financial education to a child’s future).
177 See id. at 9 (discussing how important financial education is to financial success); Jill Riepenhoff and Mike Wagner, Investigation:
Federal Student Loans Become Constant Burden, COLUMBUS DISPATCH (Dec. 16, 2012),
http://www.dispatch.com/content/stories/local/2012/12/16/constant.html (stating that student loan debt has overshadowed many
borrowers for decades, in addition to driving down their credit scores and preventing them from purchasing cars, renting homes, and
even from getting jobs).