It’s common for schools to have a comprehensive curriculum that helps to provide students with basic skills – through courses in reading, math and science – that are important to have a fuller life. However, the same requirement is rarely made for financial literacy. In fact, the 2011 survey by the Council for Economic Education reported that only 13 states require high school students to take a finance class and that less than 20% of teachers reported feeling “very competent” to teach personal finance topics. In most cases, schools and colleges assume financial literacy is taught in the home.
Here are some more staggering statistics about the state of Financial Literacy:
- Although it’s rarely taught in schools, a 2010 VISA1 survey noted that 93% of Americans believe all high school students should be required to take a class in financial education
- In a 2010 Financial Literacy Survey of adults, conducted on behalf of the National Foundation for Credit Counseling, Inc.2:
- 41% of respondents said they learned personal finance skills from their parents or at home.
- 34%, or nearly 77 million people, gave themselves a grade of C, D or F in financial literacy, leading to the conclusion that those in charge of the financial decisions at home may be in need of some additional financial education themselves.
- 78% agree that they would benefit from advice and answers to everyday financial questions from a professional, and nearly one-third (31%) strongly agree.
- 43% keep close track of their spending, however 56% do not have a budget and more than 11 million adults (5% of those responding) do not monitor their overall spending and don’t know how much they spend on food, housing and entertainment.
- Teens are not entirely clear on the cost of basic items. More teens know exactly what an iPod® costs than exactly what a gallon of milk or their cell phone bill costs. Moreover, almost half of teens said they have “no idea” how much car insurance costs.
- People in the 18 to 24-age bracket spend nearly 30% of their monthly income on debt repayment — double the percentage spent in 1992 (10% of net income is a recommended amount for debt obligation). The average 21-year-old in the United States will spend more than $2.2 million in their lifetime.
1 [Visa, Back to School Survey Shows Americans Want Personal Finance Taught in the Classroom, July 20, 2010, http://www.practicalmoneyskills.com/about/press/releases_2010/0720.php]
2 [National Foundation for Credit Counseling, Inc., Father Knows Best – Or Does He?, June 15, 2010, http://www.nfcc.org/newsroom/newsreleases/files10/FathersDayRelease.pdf and National Financial Literacy Survey Reveals Silver Lining, April 13, 2010, http://www.nfcc.org/newsroom/newsreleases/files10/FLS_ReleaseFINAL2.pdf]