Imagine a hypothetical 27-year-old named Jake, who has been living his best life: Traveling, brunching (only avocado toast), and embracing the YOLO mindset. Retirement? That was a problem for “future Jake.” But by 35, reality hit hard. He had no savings, mounting credit card debt, and the sinking realization that he had wasted crucial years of compounding growth. Meanwhile, his best friend, who started investing just $200 a month at 22, was on track to afford a home by her mid-30s without being burdened by excessive mortgage debt.
It’s 2025, and the financial well-being of young adults is at risk.
Despite an avalanche of online resources, young adults still lack the basic financial know-how to make smart decisions. Studies reveal less than 1 in 5 adults aged 18 to 25 save and invest for retirement, and those who wait just a few years can end up paying tens of thousands more to catch up[i]. Meanwhile, a MoneyRates survey shows that people who begin saving in their twenties are 66% more likely to retire by 60[ii] and afford major life expenses – like a down payment on a home or paying off student loans – versus those who wait until their 30s or later, underscoring the power of early action.
Millennials and Gen Z want financial education, and 88% of adults support mandatory school courses on financial literacy.[iii] In response, 26 states now require high school personal finance courses, up from just 7 in 2019.[iv] Utah led the push for financial literacy in 2003 with its General Financial Literacy Program, but it took 18 years for over 10 states to follow suit. Now, just over half of the states require financial literacy for high school graduation, still leaving gaps, especially in underserved communities. Free after-school programs[v], mandatory financial literacy classes[vi], and public-private partnerships,[vii][viii][ix] can help bridge these gaps with practical lessons on budgeting, saving, and investing.
Starting early matters; cultural and economic pressures sabotage young investors, and mandatory financial education could dramatically change America’s personal wealth landscape. Real-world success stories, from everyday millionaires to entire states overhauling their curricula to incorporate financial education, prove that mandatory financial literacy isn’t just nice to have – it’s essential. Equipping young people to manage money effectively ensures they can afford critical life milestones, like homeownership, family planning, and eliminating student debt, rather than struggling with financial insecurity for decades.
The Value of Starting Early
Achieving financial security through early, disciplined savings is entirely attainable: many have done it, and many more are doing it today. Fidelity data shows that saving just $150 a month from age 25 at a 7% annual return can cover a child’s college tuition or significantly reduce mortgage debt by midlife.[x] Still, plenty of young Americans delay saving, undervaluing how compounding can supercharge their savings. In fact, delaying contributions by five years increases monthly savings by over $200 to achieve the same retirement target.
Dr. Thomas J. Stanley shows that building wealth is realistic, even on modest incomes. In his Millionaire Next Door, he found many millionaires achieve their status not through high salaries but rather through consistent saving, smart investing, and frugal living.[xi] Take Tom “Millionaire Mailman” Nardone,[xii] who started as a 19-year-old postal worker and built his fortune by flipping and renting properties.[xiii] Through consistent saving, investing, and frugal living, Nardone built a deca-million net worth, ensuring financial safety and security.
Similarly, Dave Ramsey’s research shows that millionaires often come from roles like teachers, engineers, and accountants, proving that financial well-being depends more on smart habits than on a high salary.[xiv] From that same study, only 15% of self-made millionaires held top leadership roles, while 33% never earned more than $100,000 in any single working year. But the goal doesn’t have to be to become a millionaire; achieving financial health and security is within reach for anyone who adopts these principles. Whether the aim is early retirement, debt freedom, or simply reducing financial stress, the same key habits apply: live below your means, invest consistently, and, most critically, start early.
The Modern American Dream: How YOLO Culture and Consumerism Undermine Financial Security
The “American Dream,” long rooted in the fundamental rights of Life, Liberty, and the Pursuit of Happiness, also symbolizes the pursuit of financial freedom. In the 1920s, the American Dream shifted from values-driven ideals to material wealth and consumerism, famously captured by The Great Gatsby. Today, it’s fueled by consumerism, financial ambition, and relentless wealth-building, making it harder for young people to reach important financial goals like homeownership or saving for their children’s education.
Cultural drivers such as YOLO (you only live once) and FOMO (fear of missing out) have heavily influenced the spending behaviors of younger generations. A World Economic Forum study shows millennials spend an average of $5,398 a year on discretionary expenses including entertainment and alcohol, often charged to credit cards.[xv] As a result, many skip or underfund retirement accounts, with 38% of early millennials projected to have inadequate savings by 70,[xvi] potentially forcing them to work longer than expected or rely on family support. Gen Z fares even worse, as just 20% save for retirement,[xvii] and many doubt they’ll ever retire thanks to soaring living costs, student loans, and uncertainty over where to begin.
Another hurdle for Gen Z and young Millennials is the “longevity disconnect.” Failing to picture their future selves, young adults often underestimate how expensive housing or retirement can be and delay their savings. However, waiting just five years to start saving can mean needing to contribute significantly more to reach the same financial goal. For example, delaying saving for a home’s down payment until age 30 instead of 25 can mean spending an extra $42,000 due to rising interest rates and home prices. A 2024 Vanguard Healthcare Calculator warns that Gen Z and young Millennials retiring at 65 with Medicare Medigap Part G could face monthly healthcare bills of $12,000 to $20,000 – and[xviii] this is before accounting for inflation. Mastering financial basics today is crucial for tackling tomorrow’s mounting expenses and securing a more stable future.
A Case Study on Utah’s Financial Literacy Education
Teaching financial literacy early in public schools can empower the next generation to replicate these success stories. Australia has incorporated mandatory financial education into school curricula since 2012 for grades 5 to 10 and seen tangible benefits, including improved saving behaviors and increased financial confidence among students.[xix] In the U.S., the first state to implement mandatory financial literacy, Utah, shows long-term results of students being more likely to save, avoid debt, and plan for retirement. In 2003, Utah passed S.B. 61, which mandated financial education be integrated into core subjects, and S.B. 40, which required K-12 students to pass an online general financial literacy exam and teachers to earn subject endorsements.
A survey in 2018 of 1,500 high school graduates evaluated the impact of the program. The survey included 500 Utah graduates (ages 20-28) who completed the GFL course, 500 Utah graduates (ages 29-44) who didn’t, and 500 peers from neighboring states without financial literacy mandates. The results confirmed what many suspected: Utah’s GFL course significantly improved graduates’ financial knowledge and behavior.[xx]
The survey found that 79% of Utah GFL students correctly answered interest-based savings questions, compared to 70% of non-GFL Utah graduates. Moreover, 47% of GFL participants reported having emergency savings, compared to just 33% of non-GFL Utah graduates, proving early financial education directly translates into better preparedness for financial emergencies GFL graduates also showed stronger long-term habits, with 38% investing in retirement and stocks, compared to just 29% of non-GFL graduates.[xxi] These findings illustrate the power of early financial education to build responsible money habits and reduce reliance on public resources later in life, offering a model for other states to create financially empowered citizens.
Free after-school programs and public-private partnerships can close financial literacy gaps, especially in underserved communities. These initiatives offer practical lessons on budgeting, saving, and investing, tailored to real-world financial challenges. Early education arms young people with the skills to make smart choices, avoid pitfalls, and steadily build wealth. The GFL program shows that proactive financial education benefits individuals and strengthens economic stability. Expanding such programs nationwide empowers future generations to achieve financial independence, ease reliance on public resources, and build a stronger economy.
Conclusion
Teaching financial literacy early, through schools or community programs, can build habits that drive long-term financial security. Policymakers, educators, and financial experts should collaborate to expand access to financial education through programs like Utah’s GFL and public-private partnerships. Structured financial education has already demonstrated success in states like Utah, where graduates are more likely to save, avoid debt, and achieve homeownership earlier. Expanding such programs nationwide will ensure the next generation can afford homes, pay off student loans, and build stable futures without financial stress. Financial literacy isn’t just policy, it’s a game-changer for economic health and equity.
[i] TIAA, “TIAA Announces Strategic Partnerships to Expand Financial Education and Support,” TIAA Newsroom, October 13, 2024, https://www.tiaa.org/public/about-tiaa/news-press/press-releases/2024/10-14.
[ii] John Hancock, “Reasons to Prioritize Saving for Retirement,” John Hancock Ideas and Insights,accessed December 22, 2024, https://www.johnhancock.com/ideas-insights/reasons-to-prioritize-saving-for-retirement.html.
[iii] National Endowment for Financial Education (NEFE), “Respect Legislative Intent with Youth Financial Education Requirements,” NEFE Newsroom, August 2024, https://www.nefe.org/news/2024/08/respect-legislative-intent-with-youth-financial-education-requirements.aspx.
[iv] National Endowment for Financial Education (NEFE), “Existing K-12 Financial Education Requirements,” NEFE Policy and Advocacy, accessed December 22, 2024, https://www.nefe.org/impact/policy-and-advocacy/exisiting-k12-fin-ed-requirements.aspx.
[v] “Financial Literacy for High School,” EVERFI, accessed February 14, 2025, https://everfi.com/courses/k-12/financial-literacy-high-school/.
[vi] “Financial Literacy Curriculum for High School Students,” National Financial Educators Council,accessed February 14, 2025, https://www.financialeducatorscouncil.org/financial-literacy-curriculum-for-high-school-students/.
[vii] “FitMoney: Free Financial Literacy for Life,” FitMoney, accessed February 14, 2025, https://www.fitmoney.org/.
[viii] “CFA Boston Financial Literacy Initiative,” CFA Society Boston, accessed February 14, 2025, https://www.cfaboston.org/CFAB/CFAB/Get-Involved/Partner/Financial-Literacy/CFA_Boston_Financial_Literacy_Initiative.aspx.
[ix] “FoolProof Foundation: Teaching Healthy Skepticism & Critical Thinking,” FoolProof Foundation,accessed February 14, 2025, https://www.foolprooffoundation.org/.
[x] Fidelity, “Retirement Income Calculator,” Fidelity Investments,accessed December 22, 2024. https://digital.fidelity.com/stgw/digital/planning/retirement/retirement-income-calculator/.
[xi] Thomas J. Stanley and William D. Danko, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy (Atlanta: Longstreet Press, 1996).
[xii] “From Mailman to Millionaire,” Traction Real Estate Mentors, accessed December 22, 2024, https://tractionrealestatementors.com/from-mailman-to-millionaire/.
[xiii] Tom Olson, “179: From Mailman to Millionaire ft. Tom Nardone,” April 23, 2019, in Good Success Podcast, produced by Good Success, podcast, MP3 audio, https://goodsuccess.libsyn.com/ep179-from-mailman-to-millionaire-ft-tom-nardone.
[xiv] “The National Study of Millionaires,” Ramsey Solutions,October 3, 2024, https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research.
[xv] Preethi Lodha, “How Americans Spend Their Money, by Generation,” World Economic Forum, October 5, 2022, https://www.weforum.org/stories/2022/10/americans-spend-their-money-by-generation/.
[xvi] “Millennials’ Retirement Outlook May Be Worse Than Older Generations,” CNBC, February 9, 2024, https://www.cnbc.com/2024/02/09/millennials-retirement-outlook-may-be-worse-than-older-generations.html.
[xvii] ”TIAA Announces Strategic Partnerships to Expand Financial Education and Support.”
[xviii] “Health Care Cost Estimator Results,” Vanguard Advisors Alpha, accessed December 22, 2024, https://advisors.vanguard.com/advisors-alpha/health-care-cost-estimator/results#annual.
[xix] The Educator, “Whole Systems Approach Needed to Close Financial Literacy Gap: Experts,” The Educator Online, March 21, 2023, https://www.theeducatoronline.com/k12/news/whole-systems-approach-needed-to-close-financial-literacy-gap–experts/282187.
[xx] “Utah Financial Education History,” Utah Office of the State Treasurer, accessed December 22, 2024, https://treasurer.utah.gov/utah-financial-education-history/.
[xxi] Office of the Utah State Auditor, “Utah’s General Financial Literacy
Graduation Requirement: A Program Review,” October 5, 2018, https://treasurer.utah.gov/wp-content/uploads/GFL-Report-10-5-18.pdf.