Raising Financially Confident Kids by Mary Hunt

Author:Mary Hunt
Language: eng
Format: epub
Tags: BUS050000, FAM034000, Children—Finance--Personal, Finance--Personal
ISBN: 9781441238214
Publisher: Baker Publishing Group

They Are Uninformed

If I’ve learned anything from the stacks of mail I’ve received over the years, it’s that America’s kids are leaving home without knowing about money, credit, and debt. They’re not learning it at school or at home.

Do a Google search of “kids and money” and you’ll get millions of hits for everything from gadgets to games and myriad sites aimed at educating youth on things financial. Great. If there’s one thing the next generation of adults will need to know, it’s how to save and stay out of debt. Unfortunately, all that effort isn’t paying off very well. In 2010, the average high school senior flunked, with a score of 48 percent, the annual Jump$tart Coalition for Personal Financial Literacy test, which measures how prepared these young adults are to make critical purchasing decisions once they graduate from high school. In 1997, the average score on the very same test was 57 percent. The same test given to adults produced curious results. The adults scored only sixteen points higher than the students. Employing even the most liberal scoring procedures, the results are indisputable. Everyone flunked.

Four-year college students took a similar test in their junior and senior years. While the scores were considerably higher than those of the high schoolers tested, they didn’t come close to passing either.

If all of this financial ignorance isn’t bad enough, consider this worrisome fact: Students are financially ignorant but don’t know it—and worse, don’t care.

Here’s a snippet of recent results of the 2008 Survey of Financial Literacy among High School Students,[43] which is routinely given to students nationwide.

Only 28 percent could precisely define buying on credit.

Only 28 percent could precisely define a mortgage.

Only 25 percent could precisely define a budget.

Only 7 percent could precisely define life insurance.

Only 4 percent could reasonably define Social Security.

Only 5 percent could precisely define compound interest.

Only 3 percent could precisely define mutual funds.

Eighty-eight percent of those surveyed said they are either very good or pretty good at managing their money.

Thirty percent said they are not at all interested in financial information or money matters.

Only 13 percent said they are very interested in such topics.

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