Financial literacy isn’t about memorizing economic jargon or tracking every penny. It’s about understanding how money works, and how to make informed decisions at every stage of life. Whether you’re just starting out or looking for ways to help achieve your long-term financial goals, it’s never too early (or too late) to boost your financial know-how.
According to a 2024 wealth survey, more than 60% of Americans feel they’re better positioned to achieve their financial goals than previous generations.1 Nearly three in five are already investing, and Gen Z is getting a head start — over 25% say they were taught about investing in school.1
Still, only 36% of Americans have a written financial plan.1 That’s a gap we can close, starting with the basics.
Here’s a seven-step guide to building your financial foundation, plus smart tips for parents looking to set their kids up for long-term financial success.
- Know your numbers: Cash flow and budgeting
Your financial health starts with understanding how much money is coming in — and where it’s going. Creating a monthly budget helps you see your spending patterns clearly, avoid unnecessary debt, and identify ways to save.
Once you’ve got a handle on your cash flow, aim to build an emergency fund that covers at least three to six months of living expenses. This buffer can help you stay afloat in the face of job loss, medical bills, or other unexpected costs. - Start saving early for retirement
If your employer offers a retirement plan, take advantage of it, especially if it comes with matching contributions. Putting money into a 401(k) or other retirement plan early in your career allows you to frontload your savings, giving you flexibility later in life.
Even small contributions can make a big difference over decades. If you’re self-employed or want other options, think about IRAs, solo 401(k)s, Roth IRAs, or SEP IRAs. - Make your cash work for you
Once you’ve nailed down your budget, emergency savings, and retirement contributions, you can start investing excess income. Unlike saving, investing is a long-term wealth building strategy that carries a higher degree of risk.
Start with a diversified portfolio that can help you achieve long-term success. And try not to panic during market dips — investing is a long-term game. A financial advisor can help you develop a plan, as well as ensure that you stay on track. - Plan for life’s milestones
From buying a home to paying for college or planning a wedding, major life events require smart financial planning. Begin by identifying your goals and timeline. Then look into tools that can help you, like 529 education savings plans for future college costs.
If you’re a parent, now is a great time to introduce your kids to financial basics. If they have earned income, opening a custodial Roth IRA is an excellent way to help kids save for the long term. It also teaches them about compound growth and responsibility. - Teach kids about wealth
Talking to kids about money doesn’t have to be awkward or complicated. Starting early helps normalize financial conversations and builds confidence. Teach them about saving, giving, budgeting, and the concept of long-term goals.
Be open about your values and financial priorities. Whether it’s giving back, living debt-free, or building generational wealth, these lessons stick. And as they get older, introduce them to investing, credit, and taxes in age-appropriate ways. - Help young adults build credit
One of the most important steps in a young adult’s financial journey is building a healthy credit history. Good credit can affect everything from renting an apartment to qualifying for a loan.
There are simple ways to help teens and college students begin building credit. They can become an authorized user on a parent’s card, as well as open a secured credit card with help. - Plan with taxes and legacy in mind
Tax planning isn’t just for April; it should be part of your year-round strategy. From maximizing deductions to managing capital gains, smart tax strategies can help you keep more of what you earn.
As your wealth increases, so does the importance of estate planning. A will or trust can help ensure your assets are distributed according to your wishes and help reduce the tax burden for your heirs. Additionally, life insurance, charitable giving strategies, and beneficiary reviews are essential parts of a comprehensive estate plan.
Financial literacy is more than a skill — it’s a lifelong advantage. No matter if you are budgeting for the first time, looking at investment options, or teaching your kids about money, starting early is best. If you are not a client and would like to learn more, let’s talk.
1 “Charles Schwab Modern Wealth Survey 2024.” Charles Schwab & Co., Inc., 2024.
Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
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