Financial literacy has been tumbling among Americans in recent years, and you do not have to look far to see it. Just look at any YouTube episode of Caleb Hammer's "Financial Audit," or Dave Ramsey's "The Ramsey Show," and you can see the insane decisions people make. Americans have racked up thousands in credit card debt, car loans, and just have an attitude that it will go away or pay for itself.

People have lost any common sense regarding what money is, how it should be spent, or how to make it work for you. New tests show that much, as the TIAA Institute issued their yearly tests on financial literacy recently. Their results found just 47-percent of Americans correctly answered questions on things like spending, borrowing, investing and retirement. That means well over half the country has no grasp on finances or how it impacts them.

That is the lowest mark ever among Americans, and it will only get worse. Economist Vance Ginn says this is a negative that has long term impacts.

"Especially when schools are starting to teach more about accounting and economics...and we need more of that earlier on in school to really get people to understand about their finances," he says.

That is a large part of the problem. The American school system has failed in multiple ways, but the biggest is not preparing kids for adulthood. Instead of learning about taxes, credit cards or how to invest their money, they are taught subjects that have little meaning to their futures. Geometry and calculus do not matter to a student who does not want a future in it. Finances are part of every student's future.

But we have another contributor to the problem. America has become essentially a welfare state, giving out free money to millions of people who do not truly need it. Sure, some do. But many are capable of working but are too lazy to do so. Thus, they take government money from social programs. Which creates more financial illiteracy.

"They do not actually help them understand how their budget works, how they should be budgeting within their means," says Ginn. "Programs put in place by government incentivize people to not be as financially literate as they otherwise would be because it is not their money."

There comes a long-term price to pay with not being financially literate as well. Studies show that adults with low financial literacy are four times more likely to struggle making ends meet. They are also four times more likely to lack an emergency savings fund.

Americans need a wakeup call, and it needs to happen before it is too late for everyone.

"Because if not, we are going to end up in worse situations in the future," Ginn says.