Financial Literacy: Taking Your First Financial Steps

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walking like financial literacy

These last few weeks and months have been an exciting time in the Frugal Rules home. Our youngest, JP, has been slowly learning how to walk. Having a five and three year old already, we’re well aware of what goes on as a child learns to walk. They start out trying to stand, then after mastering that they take the leap to trying to walk. All of our children have started out by holding on to various pieces of furniture as they walk and slowly, over time, take the brave step of going it on their own. JP has had it a little rougher as he has a big brother and sister who find it humorous to knock their little brother down, but he continues to get back up, as most children do. I was thinking about all of this knowing it’s Financial Literacy Awareness Month as well as reading my good friend Shannon’s post on the topic earlier this week and the picture of our youngest trying to walk has me thinking about how it relates to Financial Literacy.

We All Start Somewhere

Some of us come from homes that laid a great foundation in terms of finances. Now that we’re on our own, we’ve blossomed into very prudent spenders and savers. Others of us did not benefit from such a solid financial foundation, at least in terms of financial literacy, and so we make more mistakes now that we’re managing our finances ourselves. The truth is, whether or not we’d like to admit it, even those of us with the best laid financial foundations aren’t perfect and will make mistakes from time to time. Speaking personally, I made plenty of mistakes growing up, which culminated in racking up a mountain of credit card debt. Going back to the illustration of our youngest, we all have to start crawling before we walk.

I think back to a time earlier this week where JP was motoring his way around the living room walking and holding on to the furniture. He flashed his million dollar smile and then let go of the chair to take a step towards my outstretched hand. He was able to take one solid step, only to be followed up by falling flat on his face. Thankfully he avoided the dining room table leg on his way down, but he got right back up. The point is, he just did not get up and decide he was going to walk one day. He started crawling, then standing, then attempting to walk on his own. We all start out life that way and in terms of finances; the large majority of us all start small as well. Don’t allow your starting point, or even straight up fear to hold you back as you take those first steps and even as you continue to the run the race. After time, those steps will turn into financial discipline that will serve you well throughout your years.

Financial Literacy Starts With Knowing Your Habits

While our youngest has been learning how to walk our oldest, Carla, is learning to read. Truth be told, she has been doing it for a few months and is at the point now where she can sit down with a decent sized book and read it! Being able to read is not something that comes easily either. You have to learn the sounds that letters make and then slowly build sounds together to create words. She started with very simple, three-letter words and is now moving on to learn all the different rules that apply to the English language. It’s amazing to see her blaze through new, longer and more complex words each day. As I listen to my daughter read, it strikes me that financial literacy works the same way. You need to learn about yourself, how you spend money, what tempts you and finally what motivates you to save for the future. There are various methods you can use in regards to budgeting, watching your expenses or learning how to invest in the stock market and the key is to finding what works for you and what motivates you and going for it. While there are some basics which should be followed, like spending less than you earn and saving for the future, beyond that the key is learning what makes you tick financially and finding what works best for you. This all requires homework, but you don’t have to view it as a chore; instead, think of financial literacy as a way to grow yourself financially which will ultimately pay you dividends in the long run.

Never Stop Learning

Certainly, I expect that once JP gets his walking down he’ll then start running and then Mrs. Frugal Rules and I will be truly outnumbered at home. While that might be just a bit stress inducing, I look forward to it. Life is about many things, and one of those things is growing and learning. None of us know everything, though we might like to think so, and thus need to learn in order to grow. Thankfully, there are many resources to do that in regards to handling your finances. There are books, websites, magazines, and blogs that all give you the opportunity to learn more about managing your money and make wiser decisions. If you need a place to start, then I encourage you to check out my blog roll to get a good starting point towards that end. Not only will using these resources help you make wiser financial decisions today, they’ll also help make you more sensitive to spending habits, savings patterns and overall choices that’ll help you grow your financial literacy over time. The fact that we, as American consumers, carry over $2 Trillion in consumer debt shows me that as a culture, we are suffering from a lack of financial literacy and would be well served by a movement of individuals who make it their goal to learn about themselves, their spending/saving habits and ultimately how to improve them.


What kind of financial foundation did you receive? Is there one area of financial literacy you’d like to grow in over the next year?


Photo courtesy of: Nicole Schmoll

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

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  • Justin says:

    Financial literacy is the key to success with money. You can’t become financially independent if you don’t know how to take the first steps.
    Parents need to start taking a more involved role in teaching their kids financial literacy by not making it a taboo topic. And if the parent themselves are poor with finances, they need to learn right along with their children.

    • John says:

      I agree Justin, finances need to stop being a taboo topic in families. I think discussing and teaching kids about finances is one of the most loving things a parent can do.

  • DC @ Young Adult Money says:

    With you mentioning your kids, it’s hard not to immediately think about how our education system doesn’t really teach personal finance, investing, economics, etc. to the extent that it should. With that being said, many adults need to spend time learning these things as well. I know you will teach your kids these topics as they grow up and I hope more follow your example!

    • John says:

      I completely agree DC! I think it needs to be a two pronged approach. Teaching in school is great and can help provide some of the theories behind doing certain things, while seeing it at home puts meet on the bones and they get to see it on a day to day basis.

  • Jon @ MoneySmartGuides says:

    My mom taught me the basics of finance when I was little. When I got to college, I was exposed to how John Rockefeller handled money with his kids and I really liked his method. i plan to use that with my children one day.

    The key though is that it is never too late to start learning about personal finance. Sure you might be older and have made a bunch of mistakes, but everyone does. Even with my goo personal finance upbringing I made mistakes. The key is to not get frustrated and keep learning and moving forward.

    • John says:

      That’s a great point Jon, it’s never too late to start. We all make mistakes, and I am a perfect example of that. Making mistakes should never be an excuse for not starting.

  • Greg@ClubThrifty says:

    We work with our oldest a little bit everyday on financial habits. We are trying to teach her how to save, spend, and give. So far, she doesn’t really have much to spend, but she is learning. She also knows that she has a college fund. Hopefully, our teachings (and our actions) will show set a good financial foundation up for her.

    • John says:

      That’s awesome Greg, and I think they will. Kids are such sponges when they’re young and with you starting early it should really be able to help cement some things in her mind that will help immensely in the long run.

  • pauline says:

    I am pretty good with money and have been from a young age, but most of it is pure gut feeling. I would like to improve the technical side of investments and stop finding it tedious to crunch numbers on a spreadsheet.

  • My Financial Independence Journey says:

    My parents taught me to save my money, stay out of debt, and pay my bills on time. Everything else, I’ve had to learn on my own. At this point, I would like to continue to grow as an investor.

    • John says:

      That sounds like a great foundation MFIJ, and one that all too many do not get the benefit of. From that foundation you can grow in many ways.

  • Michelle says:

    I am good with money (or at least I think so) and learned a lot from my dad. Having someone so opposite in my life (my mom) definitely shaped me because I never want to be in her shoes.

  • Grayson @ Debt Roundup says:

    My parents taught me about money and working hard to get it. The problem is that they have gone the opposite as they have grown older and I have become more responsible as I have grown. I am not teaching them how to get back on the horse because it has gotten bad.

    • John says:

      That’s too bad to hear Grayson, that’s awesome you’re helping them get back to what they previously taught you…many would not do that.

  • Mackenzie says:

    What a cute picture!

    Financial literacy is something I had to learn later in life, as my parents weren’t so good with the lessons, if you know what I mean. But you live and you learn, right?

    • John says:

      Thanks Mackenzie! ๐Ÿ™‚ I know exactly what you’re talking about and was in a very similar situation myself. None of us are perfect and you do live and learn. ๐Ÿ™‚

  • Shannon @ The Heavy Purse says:

    First, JP is ADORABLE! I can so clearly remember that stage when they are so proud of their steps (so are Mom and Dad), then before you know it, they are off and running! Second, thanks for the mention. I really appreciate it!! I love this post. We all do start somewhere and we all make mistakes. And like little JP we have to laugh it off, get up and keep moving forward. You have to figure out what motivates you, what triggers you to spend and find a supportive community. It’s takes work but it is worth it!!

    • John says:

      Thanks Shannon! I think the same, but then again I may be JUST a little biased. ๐Ÿ˜‰ Great point about finding out what motivates you as I believe that will make the end goal so much more tangible and thus make you more willing to put in the hard work.

  • Kay Lynn says:

    It was fun to read about financial literacy in relation to the learning we do as kids. I would like to add that it’s never too late to learn. I didn’t become consumer debt-free until mid-life; I was raised by parents that continually had debt.

    • John says:

      That is a great point Kay Lynn! I could not agree more. We all have different circumstances and the key is starting regardless if your five or 50.

  • Mr. 1500 says:

    Maybe Sesame Street needs a spin-off to teach financial literacy? We could call it Wall Street. Oh wait….

    • John says:

      Lol! I am just imagining Gordon Gecko meeting Big Bird…

    • Laurie @thefrugalfarmer says:

      If we did that, I’ve got the PERFECT theme song. My little nephew, who has a little bit too much AC/DC mixed in with his Sesame Street, routinely sings “I’m on the highway to L!” Oh wait! That would have to be the theme song for the US govt spinoff of Sesame Street. We could call it “The road to hell is paved with stupid spending decisions” ๐Ÿ™‚

  • Laurie @thefrugalfarmer says:

    Ok: first of all, cutest kid EVER! :-). John, I love the correlations here between financial literacy and life. Every word of this post rings so true. We all need to choose to start somewhere, and then, if we fall down along the way, get back up, dust ourselves off and start over again, just like JP. It’s time to start moving forward and get rid of that 2 trillion dollars in debt. We may not be able to do a whole lot about the government debt, but we can each take responsibility for reducing our own personal debt, and that’s a great place to start.

    • John says:

      Thanks Laurie! Like I told Shannon though, I am just a bit biased. ๐Ÿ™‚ That’s exactly what I am talking about Laurie. We can’t do a whole lot about what goes on in D.C., especially when we choose to send them back there election after election. The responsibility falls to us then and we simply need to start and find what motivates us and go after it.

  • anna says:

    Your son is absolutely precious! And it looks like he’s got an “I got this” expression on his face. ๐Ÿ™‚ I’m starting to learn bit by bit on investing, and while it’s still pretty daunting, I’m definitely getting a feel for the terminology and processes of it. Great post!

    • John says:

      Thanks Anna, and yes he does! Great for you on learning more about investing. I agree, it can seem daunting but a little education goes a long way to helping you become more comfortable. Thanks for stopping by Anna!

  • KK @ Student Debt Survivor says:

    We’re working on learning more about investment property and how to invest in the right properties. Because we’re new to home ownership we’re trying to learn as much as we can before we make another purchase.

    • John says:

      That sounds like a great opportunity KK! I would love to get into real estate right now. But, alas, we do not have the time right now.

  • Martin says:

    Bad financial literacy isn’t taught at schools and unfortunately in many homes either. Then young people are basically doomed to repeat mistakes we all made when we started because we must use trial and errors. Sometimes quite costly mistakes.

    • John says:

      I would agree Martin! The education does not prevent these mistakes altogether, but it can give them a great foundation so they can try to avoid those mistakes as they get out on their own.

  • Tony@WeOnlyDoThisOnce says:

    I’m curious as to whether you think teaching kids financial literacy should be in the context of money (such a contentious thing to bring up with kids). Do you think that games and activities that enforce healthy financial habits but take the vocabulary of money out suffice?

    • John says:

      That’s a good question Tony! I definitely think that both could be done and both would serve good purposes.

  • Midlife Finance says:

    I learned how to be frugal when we were growing up. I know that we don’t need to spend a lot of money to be happy and that’s a big lesson. Now I would like to learn new ways to make money.
    I’ll be teaching our kid as much as we can so he’ll be ready to face the world.

    • John says:

      I agree, that is a huge lesson to grasp and one that too many miss. We plan and are teaching that to our little ones as well.

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