As I alluded to in my post about things every teen should know about money, the state of financial education in this country is pretty abysmal. In fact, according to a recent survey by the Jump$tart Coalition, high school seniors were able to correctly answer an average of just 48% of questions about basic financial concepts. While college seniors did a bit better, their 65% average score still equates to a “D”.
Curious about what today’s student do and don’t know? Here’s a sample of the findings from the 31 question survey:
- Only 48% of respondents knew that a credit card holder who only pays the minimum amount on monthly card balances will pay more in annual finance charges than a card holder who pays their balance in full.
- Just 40% were aware that they could lose their health insurance if their parents become unemployed.
- A measly 17% knew that stocks are likely to yield higher returns than savings bonds and checking/savings accounts over the next 18 years even though there has never been an 18-year period where this wasnâ€™t true.
Clearly, we have a long way to go when it comes to educating the next generation about financial issues! I’d be curious to know how my contemporaries would’ve done when we were in high school (or college). Perhaps we weren’t any better off…
On the bright side, 88% knew that a savings account was a good place for money that you’d need to spend on tuition within the next year and 82% knew that certificates of deposit (CDs) aren’t typically associated with spending (yes, that’s from an actual question).
Interestingly, there were also some apparent demographic trends in the data. For example, caucasian students correctly answered 53% of the questions, while Hispanic and African American students correctly answered 45% and 41% of the questions, resectively. Amongst college students, the numbers were 63% vs. 60% vs. 55%.