By most standards, the United States has a highly educated populace. However, one glaring omission is the teaching of personal finance, and it contributes to the lack of financial mobility and prosperity of any person who fails to learn how to budget, save or balance a bank account.


Without those personal finance basics, even people with substantial incomes can pile up debt, make poor purchasing decisions and reach retirement age without sufficient savings to see them through the rest of their lives. Plus, according to current mortality rates, a man reaching 65 this year can expect to live to 84. A woman reaching the same age can expect to live to 87. The span of years between 65 and mortality is likely to increase. Twenty years ago, the number of Americans aged 100 years or more was around 35,000. That number has doubled to 70,000 today.


In 2016, the Council for Economic Education released its biennial Survey of the States, which found no improvement in economic education in recent years and slow growth in personal finance education. The council found only 20 states out of 50 and the District of Columbia require high school students to take a course in economics, two fewer than in 2014. In the years the survey measured, there was no change in the number of states (17) that require high school students to take a personal finance course. A requirement for such courses is the best indicator of whether a school system will actually offer them.


So, how do we begin to overcome these educational deficits? Gary Townsend, founder of GBT Capital Management, Chevy Chase, Md., with 35 years of banking, regulatory and investment experience, said those who plan on retiring in some comfort are best served to start learning about personal finance, saving and investing as young as possible.


“Learn as much as you can,” he said. “Seek advice. Read. Take financial planning courses in college. Research. The internet is a powerful learning tool.”


Finance and investment might be foreign concepts to young people who never have had to balance a checkbook before. While it may be complex at turns, it is not brain surgery.


“A key indicator of risk involved in a particular stock is its price/earnings or PE ratio,” Townsend said. “The ratio measures the current share price of a company relative to the stock’s per-share earnings. It’s a very simple formula, but, without it, making a decision to invest in a particular stock is risky.”


Putting lessons into practice


When you decide to take personal budgeting and personal finance seriously, following a simple axiom can get you on the right path and keep you there: Make more than you spend. Even if you are later in your career, this principle should guide you. While the importance of how much more you make than spend may vary over a lifetime, the rule is immutable, even after you retire.


Consider your young employees who have just entered the workforce. Perhaps they have some student loans to pay off. That has to be part of the budget they construct, and “construct,” meaning to create or make, is an apt word. Even for someone who has been out of school for years, building a budget has to be done brick by brick. It requires forethought, arithmetic and, more often than not, some delayed gratification.


If you have debt and no savings, perhaps you should avoid buying a new car. Cars can depreciate thousands of dollars the minute you drive them off the lot. Fancy new condo? Not so fast. Investigate whether renting or living with roommates might be a better way to leave the starting line. The finish line is a long way off, and the condos and cars can come later when you have the resources available to make that happen.


Whether you are in your 20s or your 60s, there are many handy tools to help you budget and determine how much you need to save for a comfortable retirement. For instance, you can find a number of retirement calculators online. While they may draw slightly different conclusions based on beginning assumptions, most provide a useful outline of what somebody needs to be doing at any given age.


Calculating retirement


Of course, those of you beginning to save late in your career are at a disadvantage. For savers beginning in their 20s and 30s, compounding interest will compose the majority of their retirement funds. In any case, never fear. It’s never too late. You just need to know how much to save. For that, you need a calculator.


Bankrate.com, for instance, provides a calculator that finds a 45-year-old planning retirement for age 67, with current retirement savings of $100,000, needs to save $5,000 a year to produce an income of approximately of $55,000 in retirement before inflation. With an assumed 3 percent inflation rate, the number falls to $30,000. Increasing yearly savings from $5,000 to $7,000 raises yearly income from savings to around $66,000 before inflation, and $35,000 after inflation.


This income does not include Social Security benefits or income that you expect from other sources, but online calculators can help you estimate benefits and fold them into a more complete financial picture. You can also adjust for estimated rates of return on your savings. The Bankrate.com calculator assumes a 7 percent rate of return before retirement and a 4 percent return after retirement, a period in which retirees often agree to accept lower returns for less risky investments.


Assumptions are only assumptions, and it is important to pay attention to the markets, the economy and your own personal financial situation. If these factors change, your calculations must change. For instance, any retiree expecting significant income from bonds or interest on savings in the low-interest environment of the past several years would be sorely disappointed.


Those who have kept their money in a bank account would have almost done as well stuffing it in their mattresses. Some countries have actually engineered negative interest rates, as counterintuitive as that might sound. This trend has, for some, destroyed the miracle of compound interest, which provides the benefit of having the money you save earn interest, and the money you have accumulated in interest also earn for you.


The principle of compounding extends to other savings vehicles in which you can not only earn and reinvest dividends, but benefit from capital gains, Townsend said. The compound annual growth rate (CAGR) of the Standard and Poor’s Index of 500 stocks from 1871 to December 2015 is just over 9 percent. Not too shabby. That means $1 invested in 1871 would be worth around $286,000 today. Adjusted for inflation, the CAGR falls to just under 7 percent, and the dollar investment in 1871 would still be worth more than $15,000 today.


Programs to help


Once somebody decides to invest, a number of options are available to put the principle of compounding to work, Townsend said. One of the most important is government-sheltered programs, such as individual retirement accounts (IRAs) and 401k plans. IRAs allow individuals to save for retirement with tax-free growth or on a tax-deferred basis. In a typical IRA, investors put savings in before being taxed. These investments can be matched by employers. Taking advantage of the employer match is a no-brainer. In a Roth IRA, meanwhile, savers put their after-tax income into the markets, but retirement withdrawals are tax-free. This kind of program best serves the younger savers who will benefit from long periods of compound interest.


Even with these kinds of programs, regulated by the federal government and perhaps sponsored by your employer, an investor cannot afford to sleepwalk toward retirement. Townsend said investment vehicles are your property and must be treated with the respect they deserve. You have to stay abreast of the market and the government, both of which can change the economic and financial landscape in a heartbeat.


Learning about personal finance and budget does not begin and end with a high school or college course, or with a seminar in your 20s or 30s. It means continuing education throughout your earning years and retirement. Even friends and advisers with good intentions may not be entirely reliable. No one has more vested interest, no pun intended, in your retirement savings than you do.