The first credit card I signed up for came with a free generic white T-shirt and an interest rate somewhere around 30%. At the time, the T-shirt was apparently enough to convince me.
I’d graduated high school knowing almost nothing about personal finance. I certainly wasn’t alone, and in many ways, I was fortunate. My decision to pursue accounting eventually forced me to learn things I might otherwise have ignored.
Most people don’t get that professional nudge. And unfortunately, nobody is going to hand us financial competence just because we need it. Which is a shame, because our finances can be complicated, confusing, and sometimes contradictory.
Schooling barely scratches the surface of personal finance, if it touches it at all. According to Next Gen Personal Finance, about 30 states now require a stand-alone personal finance course to graduate high school, up from just 8 in 2020, and many of those requirements haven’t fully taken effect yet. Nearly all of them are recent, so most of us finished school long before any of them existed.
It shows. Knowledge has never been more readily available, yet the TIAA Institute-GFLEC Personal Finance Index, an annual survey of U.S. adults, found financial literacy in 2026 at its lowest point in the survey’s 10-year history. There are plenty of other things fighting for our attention and a lot of confident-sounding people spreading bad information.
Ultimately, it falls to each of us to learn if we want to put ourselves in a better financial position. I’ve since gotten credit cards with much better rates, and more importantly, learned not to carry a balance. I’ve also made a point of seeking information, asking questions, and staying skeptical when something doesn’t sound quite right. I’m still making mistakes, and I’m still learning.
Learning something new takes time, and staying competent requires occasional effort. If you wanted to learn a new language, you’d spend hours in the beginning learning vocabulary, important phrases, and maybe some general grammatical rules for that language.
Once you became conversant, you’d still need to periodically practice or apply your language skills or they’d slowly dwindle away. But you don’t need to become fluent enough to translate literature. A basic understanding is likely enough to get around and order a coffee in a café. Though you may choose to order it black if you want to avoid some awkward back-and-forth with the barista.
Personal finance is no different. You don’t need to become a financial guru. Competence is a much lower bar than expert, and it’s all most of us would ever need to achieve the goals we want.
Financial competence doesn’t guarantee financial success. You can understand your finances well and still find yourself in difficult circumstances. And a high income can cover up a surprising amount of financial ignorance. But knowing more gives you a better chance of recognizing your options, avoiding unnecessary mistakes, and making the most of whatever resources you have.
Time and consistency allow more opportunity for success than endless hours spent picking individual stocks, guessing where the market is headed next, or hunting for last year’s best-performing fund. But that means you need to be willing to do enough to become competent.
Take index funds1, for example. You’ll hear me talk about them a lot as they can be great investments in a variety of circumstances. I’ve built the majority of my own portfolio around them. You don’t need to know everything, but if you currently can’t name a broad-based index fund that follows the overall market, it’s on you to put a little time into learning what options exist out there. Otherwise you hear someone mention it and go about your day. Your financial picture remains the same.
The same quick test works elsewhere. Can you name the interest rate on every debt you carry? Or how to change which funds your 401(k) contributions go into? If the answer is no, it’s the same situation as the index fund. The information is out there, and the time to find it is on you.
Competence also does something less obvious. It gives you a way to judge the people you take advice from. Without some baseline knowledge, there’s no way to tell guidance from a sales pitch, and most of us default to whoever sounds the surest.
Some of this is human nature. When you look for advice, you’re more likely to listen to the person who presents a definitive answer, a guaranteed strategy, a certainty. But when it comes to predicting markets and investment returns, certainty is almost impossible to come by. Someone can point to historical performance, or analyze current trends, but it still can only lead to a prediction, a practical guess.
One study looked at 29,000 financial influencers on a single social media platform and compared the advice they gave with how that advice performed. Only about a quarter of them demonstrated investment skill, while more than half gave advice associated with worse outcomes. Yet the accounts with the worse advice were the ones with more followers, posting more often and carrying more influence over what their audiences traded. The loudest, most-followed voices were rarely the most reliable ones.
We’re all biased to be more swayed by confidence than candor. Be mindful of that bias.
A few questions can help. Is the person selling something tied to the advice? Do they explain the tradeoffs, or only the upside? Are they willing to say what they don’t know? A source that holds up to those questions is worth more of your time than one with a big following2.
Not learning about money is a decision. It happens one “I’ll look into it later” at a time. You don’t have to know everything. You don’t even have to know very much. But you should know enough to recognize when you don’t understand something that matters to your financial future.
And when that happens, you have a choice. You can move on and hope it works out, or you can spend a little time figuring it out. It’s on us to decide.
— Brad
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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).
An index fund is an investment fund designed to match the performance of a market index, such as the S&P 500, by holding the investments in that index or a representative sample of them. Because the fund follows the index instead of relying on a manager to choose investments, its fees tend to be lower. Index funds commonly come in two forms: mutual funds and exchange-traded funds (ETFs). The main practical difference is how they trade. Mutual funds are bought and sold once a day at a price set after the market closes, while ETFs trade throughout the day like a stock. Not every mutual fund or ETF is an index fund, so it’s worth checking what a fund is designed to track.
For what it’s worth, my own learning started with my dad, then got a foundation from my accounting education, the work toward becoming a CPA, and the continuing education that comes with it. Early in my career, preparing individual tax returns gave me a look at a wide range of financial situations, and my own decisions and mistakes have taught me plenty since. I’ve added to that with blogs and podcasts like Mr. Money Mustache, Financial Samurai, and Mad Fientist, and more recently Your Money Guide on the Side and The Money Guy Show, along with online articles from a variety of news sources. There are plenty of good resources out there. I’d approach each one expecting it to offer something useful, without treating any of them as the final word.
If you want a neutral starting point, two free resources run by regulators are widely regarded as reliable because they aren’t selling anything. Investor.gov, from the U.S. Securities and Exchange Commission, covers investing basics. FINRA BrokerCheck lets you look up a financial professional’s background before you work with them.