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Why Financial Literacy Matters

April 16, 2013

By Brian Page

Personal finance is just as much about protecting what is inside of us as it is protecting what is around us. Our own personal finances have a direct impact on our emotional well-being. It is our responsibility to balance a successful personal and professional life, and be financially capable enough to sew the two together to live life as we envision it.

Across the country students are graduating high school and college without any formal instruction in personal finance. Research is revealing the consequences of this educational void are eroding our emotional well-being.

  • Financial stress contributes to coping functions of alcohol, drinking motives, and alcohol involvement.1-3

  • Family economic distress adversely affects family well-being.4

  • Financial strain is positively related to general psychological distress in youths.5

  • Credit card debt and stress regarding debt are associated with health.6

  • Financial stress is positively associated with absenteeism.7

  • Economic pressure contributes to lower quality of marriage.8

  • Economic strains erode positive concepts of self that results in depression.9

If you have not done so, enroll in a course that teaches Personal Finance skills taught by a certified professional. Bear in mind that your financial education should not stop at the conclusion of one course. As our financial system continues to evolve we will need to evolve with it.

I thank Dr. Ryan Howell, who provided me with the research for this article. His column in Psychology Today entitled “Can’t Buy Happiness” can provide further perspective of the relationship between money and happiness.


Brian Page is a personal finance and economics educator with Reading Schools, where he was named a Milken national educator recipient and Money Magazine “Money hero.” You can follow him on Twitter at @FinEdChat.


1 Pearlin, L.I. & Radabough, C.W. (1976) Economic strains and the coping functions of alcohol. American Journal of Sociology, 82, 652–663.
2 Peirce, R.S. & Frone, M.R., Russell, M. & Cooper, M.L. (1994) Relationship of financial strain and psychosocial resources to alcohol use and abuse: the mediating role of negative affect and drinking motives. Journal of Health and Social Behaviour, 35, 291–308.
3 Ulla, P. (1990) The association between income, financial strain and psychological well-being among unemployed youths. Journal of Occupational Psychology, 63, 317–330.
4 Fox, G.L. & Chancey, E. (1998) Sources of economic distress: individual and family outcomes. Journal of Family Issues, 19, 725–749.
5 Peirce, R.S. & Frone, M.R., Russell, M. & Cooper, M. L. (1996) Financial stress, social support, and alcohol involvement: a longitudinal test of the buffering hypothesis in a general population survey. Health Psychology, 15, 38–47.
6 Drentea, P. & Lavrakas, P.J. (2000) Over the limit: the association among health, race and debt. Social Science and Medicine, 50, 517–529.
7 Kim, J. & Garman, E.T. (2003) Financial education and advice changes worker attitudes and behaviours. Journal of Compensation and Benefits, September/October, 7–13.
8 Lorenz, F.O., Conger, R.D., Simon, R.L., Whitbeck, L.B. & Elder, G.H., Jr (1991) Economic pressure and marital quality: an illustration of the method variance problem in the causal modelling of family process. Journal of Marriage and the Family, 53, 375–388.
9 Pearlin, L.I., Menagahn, E.G., Lieberman, M.A. & Mullan, J.T. (1981) The stress process. Journal of Health and Social Behaviour, 22, 337–356.


Important points and yet few who are not exposed to essentials of financial literacy (from family, school, peers) are unlikely to ever begin. I recommend the work of retired financial advisor Paul Merriman (.com) and his Merriman Financial Education Foundation’s free resources for getting started, like free ebook, ‘First-time Investor: Grow and Protect Your Money ‘
Aysha Griffin
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