Regular HD writers, readers and commentators are just not normal- in a good way

Over the several years I have been writing and commenting on HD it has been made clear that the HD community includes many sophisticated investors and planners. People who use budgets, track expenses, do their best to investigate and then make financial decisions based on information they develop. They use various type of software programs and, of course, their own spreadsheets. They analyze risk and investment expenses. They like details. They think about the future. And, it appears, they have been doing all this for many years.

See, the HD community is just not normal.  They are financially literate while several reports indicate Americans score less than 50% on basic financial literacy tests- really basic.  The lack of financial knowledge is estimated to cost Americans billions of dollars annually through poor decisions, overwhelming debt, and insufficient savings.

We talk about financial education a great deal, but we have a long way to go. While many HD readers and writers are comfortable with details in various ways,  many people - me included- are not that thrilled with all the math, assumptions, etc. It seems to me we need to present financial matters in the simplest form possible. For example:

Save, never pay credit card interest, spend.

Compounding interest is your best friend.

Invest in index funds and never stop.

Only use debt for necessities such as a home or car, but at a level you can afford that does not interrupt saving and investing.

Start early and be patient. 

What ideas do you have?

What DON’T many, perhaps most,  Americans know?

1. How Compound Interest Works

Many people don’t fully grasp how interest accumulates on savings or debt.

🔹 2. Credit Scores

Few understand how scores impact loan interest rates, renting, or even job prospects.

🔹 3. Budgeting and Spending

Overspending on housing, cars, or subscriptions is common.

Financial literacy surveys show only about 40% of U.S. adults use a monthly budget. No comment from me on this one except a budget doesn’t really stop overspending, common sense does 😎

🔹 4. Debt Management

Misunderstanding how minimum payments work.

Lack of awareness about student loan terms, interest rates, and repayment options.

🔹 5. Investing Basics

Many avoid investing out of fear or lack of knowledge.

Misunderstandings about:

Stocks vs. bonds

Risk and diversification

Long-term gains and inflation

Over 60% of Americans don’t invest outside of retirement accounts.

🔹 6. Retirement Planning

Don’t know how much they’ll need to retire.

Think Social Security will fully cover expenses.

Don’t understand 401(k)s, IRAs, or employer matches.

🔹 7. Taxes

Confusion about tax brackets (many think all income is taxed at the highest bracket).

Misunderstanding deductions vs. credits.

Underutilization of tax-advantaged accounts (e.g., HSA, 529 plans).

The post Regular HD writers, readers and commentators are just not normal- in a good way appeared first on HumbleDollar.