Why More Americans Need to Think Like a CPA

Why More Americans Need to Think Like a CPA

Tell the truth: Do you know what double-entry accounting means? Are you familiar with the ins and outs of balance sheets, long-term risk and depreciation?

If you think understanding these basic accounting principles is only for your CPA and other finance specialists, Jacob Soll says think again.

According to a New York Times op-ed by the professor of history and accounting, one step to solving American’s money problems is simply to make them more financially savvy.

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Soll draws on examples from Renaissance Europe, a period when people of almost every occupation and socioeconomic class were financially literate. Double-entry accounting (the practice of balancing debit and credit transactions) was standard, and many considered keeping track of their finances a form of moral accountability. In Holland, widespread financial know-how allowed institutions, including the stock market and the canal system, to flourish for years.

Among contemporary Americans, on the other hand, Soll says knowing how to balance an account is more of a special skill than common knowledge. Most people, he argues, don't know how to be financially responsible.

That's why Soll suggests that financial education should be part of the high school curriculum, just like history or geometry. And certain journalists should be trained in financial matters, too, so they can deliver accurate and relevant information to readers.

RELATED: Investing in the Future: 4 Money Courses for Young Adults

The good news is, if you're here, you're already on the road to becoming more knowledgeable about your money. If you're looking to up your financial IQ, start by learning how the 50-20-30 budgeting rule can help fatten your wallet.

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