Basic Financial Literacy Statistics
Basic Financial Literacy Statistics are dismal in this country. Why is that? What can be done? What can you do to make sure you are not one of the casualties of the financial crisis?
These are all great questions. The purpose of this article is to help you understand some of the reasons of how we got into this financial mess.
Other articles in this section will explain what you can do to protect yourself and your family financially. Then with a little work you can restore some financial sanity to an insane situation.
Background: To understand where we need to go from here we must first understand how we got here. The problem starts with the students and here are the shocking facts!
Problem #1: Poor Basic Financial Literacy
National Financial Literacy Challenge -(Admin. by the Treasury Dept)
• 35 Question Exam on Personal Financial Issues
• 46,000 American High School Students took exam (May 2008)
• Average Score was 56%
2008 Jump Start Survey of Financial Literacy among High School
• Average Score was 48%
• In the past decade Jump Start has biannually tested 12th graders
• Scores ranging from 57% to this years low of 48% (Failing range)
Problem #2: –Students have Unrealistic Expectations
2007 Charles Schwab’s 2007 Teens & Money Survey
• Teenagers believe they are financially savvy
• They believe they will be earning “plenty of money”
• Boys expect to earn about $173,000 average
• Girls expect to earn about $114,000 average
But when probed for specifics, the teens reveal startling gaps in their knowledge.
• Only 51% know how to write a check
• Only 34% can balance a checkbook
• Just 26% know how credit card fees work
Problem #3 –Student Personal Debt is increasing
The lack of financial knowledge among college undergrads continues to rise.
“Project on Student Debt”
• Students had an average of $20,098 in debt
• 66% of college students have at least one credit card
• 25% of all students had paid a credit card late fee at least once.
Problem #4 –Parents are not teaching Financial Literacy
Research by Charles Schwab and Co. Inc. shows that teaching financial literacy isn’t a priority with parents. Research found that while 70% of parents taught their teens
to do laundry.
• Only 34% had taught their teens to balance their checkbook
• Only 29% had taught them about how credit card fees and interest work
Problems Caused by Excessive Dept and lack of financial education
• Excessive Stress
• Lack of focus in work and personal life
• No backup plan if crisis hits
There is truly a
for change in the US Educational System.
The good news…and the bad news!
• There are many rich resources to learn financial literacy
• There are many willing people to teach others
Despite this good news, last year’s report shows students are still “failing” when it comes to financial literacy.
This begs the questions:
• How do we as a society help deploy programs that teach the important principles of Basic Financial Literacy?
• What can you do to take advantage of the rich financial resource available today?
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*1 The Statistics shown are from the 2008 Annual Report to the President on the President’s Advisory Council on Financial Literacy.
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