Financial Literacy in the Age of Covid-19

The pandemic has served as a financial wake-up call, as people have begun to realize they need a financial safety net for when things go drastically wrong.

Alex Mashinsky
4 min readApr 28, 2021

A recent study shows that 63% of Americans have been living paycheck to paycheck since Covid hit, with no type of emergency savings. The pandemic has served as a financial wake-up call, as people have begun to realize they need a financial safety net for when things go drastically wrong.

Today surveys show that 56% of Americans plan to develop a retirement plan, and 48% want to create a household budget. We are also currently experiencing record high saving rates.

But why did it take a catastrophic global emergency for Americans to realize this? And why is financial literacy so under-developed in this country that people don’t realize the importance of saving for a rainy day?

April is National financial literacy month, a month to raise awareness about the gap in this country’s financial literacy education. Unfortunately, many Americans have very little financial education. According to the US Financial Literacy and Education Commission, only one-third of adults could answer at least four of five financial literacy questions about mortgages, interest rates, inflation, and risk.

The real danger of the financial literacy gap is that it reinforces our reliance on consumer debt. US personal savings rates are consistently lower than the global average year-over-year. Last year, despite heavy COVID restrictions throughout the country, US consumer debt increased by $800 billion. The combination of poor financial education and the constant influence to spend is leaving many Americans in a state with no long-term savings and no cushion to lean on in emergencies.

How can someone become financially literate?

It is extremely important at an early age to start teaching children financial management, budgeting, and other aspects of the financial industry. By the time someone is in high school, they should understand the significance of

  • Budgeting your money responsibly
  • Building long-term wealth with the power of compound interest
  • Escaping the cycle of debt and securing financial freedom
  • Making your money work for you with passive income
  • The dangers of inflation and risky speculation

These issues are not taught in classrooms around the US. So what are some key concepts that people should be aware of?


One of the most important aspects of financial literacy is understanding the power of compound interest, which Motley Fool describes as “what happens when you reinvest your earnings, which then earn interest as well. Compound interest essentially means “interest on the interest” and is the reason many investors are so successful.”

Think of compound interest as a snowball rolling downhill. At the top of the hill, the snowball is small. As it continues on its path, it builds on itself, until it becomes a mighty avalanche over time. At Celsius, we urge our community to HODL for the long-term, and build their snowballs over time. In fact — check out our yield calculator to see how HODLing one of our multiple supported digital assets can pay long-term yields for patient users.


It might sound simple, but it’s a hard thing for many Americans to grasp: the best way to save money is to NOT spend it. When budgeting, it’s important to emphasize the necessities like rent, bills, and credit card payments first. Experts from all across the economic spectrum, from billionaire CEO Mark Cuban to Senator Elizabeth Warren, have their own thoughts on how to apportion your money more effectively. What’s important is creating a budget that helps put YOU in control of your finances.

There’s plenty of experts that can help you create a better spending plan — but they often overlook the amount one should dedicate to investing. Kevin Voigt of Nerdwallet had a great writeup on this last month, with the advice that one shouldn’t allocate more than 10% to digital assets like Bitcoin.

The Credit-Debt Cycle Trap

Ask yourself this question: how do banks make money? The sad reality is that the banking industry has people hooked on easy credit to make a profit. And it’s easy money for them! The average credit card interest rate is 17.87% for new offers and 14.58% for existing accounts, according to WalletHub’s Credit Card Landscape Report.

Look at this headline from just a few months ago: “Banks’ Margins Suffer As US Consumers Pay Down Credit Card Debt.” In order for banks to do well, average Americans must do poorly. How messed up is that?

The truest definition of financial freedom is the ability to live debt-free, with enough money saved for emergencies, and the ability to make passive income with long-term yields. Celsius is dedicated to beating the banking model and bridging the financial literacy gap in our community of Celsians with better education, transparency, and openness.

But don’t just take my word for it! Check out some of our recent Celsian success stories here.

*This article is not financial advice and does not consider your personal financial situation, goals and needs. You should always consult your professional advisers (including financial, legal and tax advisers) before making any investment decision. Investing in and holding digital assets involve a high level of risk, and you should not undertake such risks if you do not understand or can not afford to take such risks.



Alex Mashinsky

Founder of @CelsiusNetwork | Transit Wireless| Arbinet | Tech Innovator with over 50 patents and awards