America’s adolescents don’t know much about money. That’s the finding of a survey released yesterday by the Federal Reserve. Here’s Fed Chairman Ben Bernanke’s speech to the Jump$tart Coalition for Personal Financial Literacy, which sponsored the study. And you can download the actual survey and its results here.
On average, high school seniors answered only 52.4% of the financial questions in the survey correctly. That’s up a scoosh from the same results two years ago but still appallingly low. And these are not rocket science questions. Only 14.2% said correctly that stocks are likely to offer the highest growith over 18 years of saving for a child’s education. Nearly 45% thought that a U.S. Savings bond would offer the highest return. Separately, we know that teenagers drastically underestimate the cost of using credit for purchases.
Why am I talking about teenagers on a divorce and family law blog? Because far too many of these financially ignorant teenagers will become financially ignorant adults. And financially ignorant adults are more likely to end up in my office for a divorce after they allow themselves to be lured into overspending or just don’t manage money well.
I understand that we all would love for public schools to teach our young people about financial issues, but my friends who are teachers tell me that’s unrealistic. They’re already being asked to teach more and more even while governments choke off their resources.
My church, Vestavia Hills United Methodist Church, is one of many that does an excellent job teaching young people the honest truth about their emerging sexuality. Maybe it’s time for churches and synagogues to take on financial literacy as well.
We all need to be smarter about money. We need to get started learning about it earlier.