This article is intended for the parents of the upcoming generation. Alan Greenspan, financial guru and former chairman of the Fed, once said that “the number one problem in today’s generation and economy is the lack of financial literacy.” Why is financial literacy so important? Because hard work and long hours can only do so much.

Albert Einstein, possibly the smartest man of the last century, once said: “The difference between stupidity and genius is that genius has its limits.” Financial literacy does not require genius, but the depths of the potential hole dug by financial ignorance are limitless, and should provide sufficient motivation for all to learn what we can to become more financially literate. This is especially needed for children as they begin their financial lives.

The sad situation of the young and upcoming generation today is that they start with the greatest intentions and end with outrageous debt. As they begin their adult lives, enrolling at only the best colleges and often forgoing work while in college to dedicate themselves to their studies, they saddle themselves with debt that will follow them for decades. When we combine this debt with a general lack of financial literacy, we arrive at the great personal financial problem of this decade.

When incoming students at four-year colleges were tested on their financial wellness, the average score was around a dismal 30 percent. The test was given to 42,000 college freshmen, and published by Higher One, a financial aid disbursement company, and EverFi, an education technology company. The questions were not about financial ratios or stock call values, but simply tested students’ understanding of student loan terms, credit scores and emergency funds.

While one may assume that college students with proverbially skinny wallets would be very careful with how they spend their money, the survey found that only 39 percent of four-year college students use budgets. Possibly more alarming, 12 percent of students don’t even check their account balances and know how much money they have — because it makes them nervous.

With this situation, it is much more common for students to start to learn financial literacy through an embarrassing rejection of their card at a restaurant on a date, a loan denial when they go to buy their first car, or an intimidating letter that comes in the mail notifying them of their delinquency. While their parents and friends might be forgiving, financial institutions are not, and learning through mistakes in the financial world can leave you in a financial pit of despair for years as significant mistakes will weigh down a credit score for nearly a decade.

But this is not the only way that students can learn.

A much better way is for the older generation to acknowledge its own deficiencies in financial literacy, and lead the younger generation by example — by the example of learning along with them and applying those lessons to their own finances as they help their children do the same. We may have been lucky enough to make it through the gauntlet of financial mistakes and emerge relatively unscathed without sound financial literacy skills, but the gauntlet is much more dangerous now. In just the last 15 years, student loan debt has grown 511 percent. Heading innocently into that financial climate without a better understanding of the tools of financial wellness is likely to end in disaster for the younger generation.

By talking to, and learning about, financial literacy along with children, they can be sent forth into the world, and the older generation toward retirement, on the best footing possible.

John Hoffmire is director of the Impact Bond Fund at Saïd Business School at Oxford University and directs the Center on Business and Poverty at the Wisconsin School of Business at UW-Madison. He runs Progress Through Business, a nonprofit group promoting economic development.

Jerald Adam Long, Hoffmire’s colleague at Progress Through Business, did the research for this article.

TO DO MORE to improve your financial literacy in a variety of topics for free, visit the Khan Academy website: ACT NOW

TO READ MORE about the importance of financial literacy check out this article by TIME Magazine: