“How Many Miles Is 401(k)?” and Other Financial Knowledge Gaps

Comedian Chip Leighton is known for collecting hilariously uninformed texts between teens and their parents. For example, one young person asked, “What time is Noon.” (This is the title of Leighton’s best-selling book of these examples.)1

One of the subjects teens seem to have little practical knowledge about is money—how you accumulate it, how you invest it, and how you manage it. For example, a mother reported to Leighton that when she told her teenager that she’d registered for a 401(k) at work, the teen asked how far that was in miles.

Some of teens’ missing information is about small-scale things, such as “Do I need to tip the eye doctor?” and “Is the ATM going to be open later?” But others reflect a lack of knowledge of the bigger picture, such as “Do I have a trust fund?” and “What is my net worth?”

Of course, all of us only know what we’ve been taught or figured out on our own (usually with many mistakes). Older generations could laugh at our ignorance of European history, world geography, and how to tune up a car. Today’s young adults demonstrate an ignorance about financial matters because nobody has instructed them. It’s no longer a required class in school and many parents have felt unqualified to teach their kids because of their own lack of knowledge.

Unfortunately, for many young people this void in practical knowledge has been filled with badly informed advice on TikTok. And all social platforms push the idea that it’s normal to spend like you’re affluent even if you’re not.

The effects of financial illiteracy have been devastating, with 18-year old college students saddling themselves with huge loans they will struggle for decades to pay off, and young adults (mostly men) who believe the stock market should be played like a video game.

Studies have shown that teens who do receive financial education show improved outcomes in just a few years. So, if you have kids (or nieces and nephews) in high school or college, encourage them to take at least one course in personal finance.

Also, share with them what you’ve learned along your own journey to financial health. You probably know a lot more than you realize.

Your advisor is happy to point you toward trustworthy resources you can share with the young people in your life. And help you fill in any gaps in your own knowledge.

No matter how much you know, there’s always more to learn.