Is Your Financial Health a House of Cards?

Union strikes and threats of government shutdowns expose Americans’ lack of financial wellness. Systemic changes are needed to address financial literacy.

A man wearing a hat builds a house of cards at his desk.
(Image credit: Getty Images)

When headlines scream about union strikes or government shutdowns, it's easy to fixate on the immediacy of missed paychecks and the struggle to pay bills. But what if the real story here isn't just about these immediate crises? What if it's indicative of a deeper, systemic issue — a fundamental lack of financial health and wellness in America?

The problem runs deeper than strikes and shutdowns

To many, a government shutdown or a strike might seem like an isolated problem, but they're merely the tip of the iceberg. According to a Federal Reserve study, 40% of Americans would struggle to come up with $400 for an emergency. Not only that, but 40% of people making $100,000 or more are living paycheck to paycheck, according to LendingClub.

Shutdowns and strikes are not the issue; they merely expose the house of cards that is financial health in America. Even if shutdowns and strikes didn’t happen, far too many people face a daily reality that is about surviving and not thriving. What happens if the car breaks down? The house needs a repair? Or, heaven forbid, the kids need new school clothes or athletic gear for the upcoming season?

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A house without a foundation: A lack of financial literacy

For most Americans, financial literacy is a hit-or-miss affair. Schools teach algebra and history, but how many of us have sat through a class on personal finance? In high school, I could recite a passage out of Shakespeare but couldn’t tell you a darn thing about income, taxes, student loans or saving for the future.

A study from the National Endowment for Financial Education found that only 24% of Millennials demonstrate basic financial literacy. What's worse, only a few states have a personal finance requirement in high schools. What about colleges and universities? They’ll teach you all about equity analysis (i.e., how to pick individual stocks — we can debate this topic later) but nothing about sound personal finances.

This lack of financial education cripples us right from the start and leaves us unprepared for life's many unpredictable turns. What’s worse is that poor financial literacy gets handed down from generation to generation.

Unbiased and personalized financial advice: A rarity, not a given

Even for those with the initiative to seek out financial advice, a significant barrier remains: access to unbiased, personalized and affordable guidance. Financial advice has been, for decades, an exclusive club for wealthier Americans. If you had a lot of money, made a lot of money or were willing to pay a lot of money, someone would take your call and offer you advice.

Yet, if you dig deeper, you would find that there were no standards for the quality of the financial advice you would receive or the quality of the financial adviser — education, experience and ethical standards were optional. And what about this whole “fiduciary” thing? When the broader industry caught wind that brokers, insurance and annuity salespeople and the like would have to act in your best interest (i.e., do the best thing for you as the client), they fought tooth and nail and spent hundreds of millions of dollars to lobby against it.

What we have today is a confusing web of rules and regulations that create different service standards for different types of financial “professionals” who can all call themselves whatever they want — adviser, planner, wealth manager, you name it. The bottom line is that the majority of people are navigating the complex world of personal finance, the economy, life and a rapidly changing technology landscape without access to quality, unbiased and affordable advice and guidance.

It's time for a paradigm shift

The question we ought to ask ourselves is, "If we didn’t have shutdowns and strikes, would we be better off?" The answer, dishearteningly, is likely no. Without addressing the systemic issue of financial illiteracy and lack of access to quality advice, most workers would still be living paycheck to paycheck, without an emergency fund and with no clear plan to get out of debt or save for the future.

We need a transformative approach to financial wellness in America, one that democratizes access to education, tools and unbiased financial advice. Imagine a world where you don't have to be wealthy to get advice tailored to your life circumstances, where schools equip young people with the skills they need to manage money effectively and where emergency funds are the norm rather than the exception.

This isn't just about preparing for the next shutdown or strike; it's about fundamentally improving the financial circumstances of every American. It's about laying the foundation for a life not just of financial security, but of financial freedom.

You see, financial wellness isn't just about getting by; it's about thriving. It's about building a life where money isn't a source of stress but a tool for opportunity. This isn't an unattainable ideal; it's an achievable reality — but only if we prioritize access to the education, tools and unbiased, affordable financial advice that everyone deserves.

Let's not settle for merely surviving the next crisis. Let's aim higher. Let's equip people with the skills and resources they need to not just weather life's storms, but to sail through them toward a brighter, more secure future.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Brent Weiss, CFP®, ChFC®
Co-Founder and Head of Financial Wellness, Facet

Brent Weiss is co-founder and Head of Financial Wellness at Facet. His belief that financial wellness is essential to living well and that all people deserve access to the kind of financial advice that can lead to an enriched life has been the driving force behind the firm's mission and vision. He is dedicated to enabling greater access to innovative, next-generation planning solutions and technology that can improve the quality of life for all people.