Interest. Inflation. Budget. Cash flow. Income. Credit. Debit. Loans. Invest.
These are just a few of the fundamentals in finance that all Americans have seen before. But despite these simple terms, did you know a large majority of Texans don’t know what they mean?
In fact, according to The FINRA Foundation, Texans average a score of 2.9/5 on basic financial concepts. While a staggering number far below the rest of the nation, this data point represents a much deeper problem in regard to finances: for millions of Texas residents, they are making financial decisions without a clear understanding of how money works in everyday life.
Why does Texas lag behind?
Although the financial literacy score is low, what does this mean for the state of Texas?
For Michael Scarpati, CEO of RetireUS, he suggests the financial stakes could not be higher.
“The numbers from the FINRA Foundation are a clear example that too many Texans are navigating their financial lives without the proper tools they need. And while the reality is that not everyone has access to formal financial education, that creates a real challenge for families trying to plan for their future,” he says.
Historically, Texas is one of the few states that does not require personal finance courses in schools, underscoring the main reason why financial literacy has always been low. Unlike some states that mandate financial education as part of high school graduation requirements, Texas leaves this largely up to school districts. This means many students graduate without ever learning how to balance a budget, understand credit scores, or compare interest rates on loans.
Texas is also home to a diverse and fast-growing population, including many immigrants and first-generation Americans. Because of this, some households have limited exposure to the U.S. financial system or face language and accessibility barriers in learning key financial concepts.
Yet, without financial literacy, money can quickly become overwhelming, leading to debt, stress, and missed opportunities to build wealth. And while some Texas residents take it upon themselves to learn, the reality is many simply don’t know where to start.
What can financial consciousness do?
That is where financial consciousness comes into play. This is a concept that involves developing awareness of where money flows, creating a framework for smarter decisions, and building habits that strengthens long-term financial health. It emphasizes purposeful actions that gradually build financial confidence.
Scarpati highlights this approach, “Even in the absence of resources, individuals can educate themselves by starting small, whether that be putting money in savings or tracking daily expenses. General education is the backbone of financial security, and it does not have to seem complex. Rather, it is rooted in building initial awareness first, and then making intentional choices from there.”
Financial consciousness is also about proactively shifting the mindset and traditional routine. Taking the initiative to seek support, for example, whether it is from a financial advisor or a trusted individual, is one way to gain better financial knowledge. Developing practices like setting financial goals, tracking expenses, and prioritizing needs are additional ways to bridge the financial gap.
What’s next for Texas?
Beyond Texas, studies prove the financial literacy problem is an ongoing challenge elsewhere. While nearly 41% of Americans say they have to teach themselves about finances, roughly 80% believe they would feel more prepared if they learned about money at a younger age. Even surrounding states are feeling the pressure, highlighting the importance of addressing financial literacy now.
As it seems, Texas is surely not alone, but the state is positioned at an alarming status. If it does not address its financial literacy gap, the implications could look more severe than they already are. For the individuals unprepared, one economic downfall could risk the future of a healthy financial situation.
To put it simply, every small step toward financial education counts. Implementing efforts like financial consciousness today will be the key to living a financial life with control.
For Texans, the time to face money starts now. Otherwise, the state risks falling under a national financial trap.