Teens Score an 'F' in Knowledge of Personal Finance
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Joan Oleck -- School Library Journal, 04/14/2008
High school seniors answering questions on a national survey testing their knowledge of personal finance and economics scored a dismal 48.3 percent, according to a recent report by the Federal Reserve. That score lagged behind the 52.4 percent average score seen in the last survey, in 2006, and was the worst of all six surveys conducted to date.
Questions looked at such vital issues as credit card finance charges, college loans, and investment choices.
Fed Chairman Ben Bernanke underscored the seriousness of American teens' apparent knowledge gap during an April 9 press conference held by survey sponsors, the Federal Reserve and the Jump$tart Coalition, which seeks to improve young people's financial literacy. "In light of the problems that have arisen in the subprime mortgage market, we are reminded of how critically important it is for individuals to become financially literate at an early age so that they are better prepared to make decisions and navigate an increasingly complex financial marketplace," Bernanke said. "Choosing a credit card, saving for retirement or for a child's education, or buying a home now requires more financial savvy than ever before."
The chairman criticized the fact that only eight states require personal finance education before middle or high school graduation. "I strongly believe that promoting financial literacy, in particular, must be a high priority," Bernanke said.
The survey results underscored his concern. Only 27.3 percent knew that income tax may be charged on income earned by savings accounts. And only 35.8 percent knew that the best investment for protecting a family's savings during a period of inflation is a home with a fixed-rate mortgage.
The survey, its 31 questions, the answers, and the percentages of students choosing each possible answer are online.
