Why It's Never Too Late to Fix Your Finances

When we speak of financial education today, in most cases we are referring to the broad, global effort to teach students how to stay out of debt and begin to save for retirement. But what about those who already have debts and may already be retired?

Clearly, we should teach them too. It’s never too late to improve your financial standing—and unlike financial education among the young, elders exposed to basic planning strategies adopt them readily, new research shows. This underscores the sweeping need for programs that address financial understanding at all ages and why even folks well past their saving years may still have time to get it right.

Last year, AARP Foundation and Charles Schwab Foundation completed a 15-month trial of financial instruction designed specifically for low-income people past the age of 50. After just six months of training, the subjects exhibited significant improvement in things like budgeting, saving, investing, managing debt and goal setting.

For example, only 42% of participants had at least one financial goal at the start of the program and 63% had set at least one financial goal after six months in the program. The rate of those spending more than they earned fell by a third and 35% had paid down debt. Many had begun to track spending and stop overdrawing accounts and paying late fees.

Participants saying they were “very worried” about money dropped to 14% from 22%; those saying they were “not very/not at all worried” jumped to 42% from 34%. These are remarkable gains in such a short period and among such a generally disadvantaged group. Half in the group had saved less than $10,000 and average income was about $35,000.

The research suggests that the 50-plus set can make big strides toward a secure financial life with some instruction. It jibes with other reports illustrating the value of financial inclusion for the unbanked millions and how a higher degree of personal financial ability might even save our way of life for everyone.

But let’s be clear: this isn’t just a way for low-income households to improve their lot. Plenty middle-class and even affluent households have a savings problem. And as we age we tend to make poorer money decisions regardless of our net worth. So it’s nice to see the financial education effort move beyond the classroom—increasingly to places of employment as part of benefits counseling and now, maybe, to community centers and retirement villages where willing adults can find it’s never too late to learn something new and feel good about their finances.