A financial literacy test given by the National Financial Educators Council found that test-takers from 10-14 years old scored an average of only 53.58%.
People from all 50 states have completed the National Financial Literacy Test – a 30 question test designed to measures participants’ ability to earn, save and grow their money. The test questions cover the ten subjects covered in the Financial Literacy Framework & Standards and were written to measure 3 key areas: motivation to learn, subject knowledge and recognition of the first step.
Money is a fact of everyday life, and learning how to manage money the right way is critical to achieving financial independence, and success. Yet most kids receive no financial education before they enter the adult life. This fact is just one in a set of youth financial literacy statistics that may indicate our future generations are in for some real problems:
57% of college graduates plan to move back in with their parents (MonsterTrak).
39% of American adults have ZERO non-retirement savings (National Foundation for Credit Counseling [NFCC]).
76% of college students wish they had more help to prepare for their financial future
More than half of adults (56%) do not have a budget (NFCC).
Clearly, a college education should not be the only concern for parents when it comes to preparing their children for the future. Research has shown that programs to teach financial literacy for youth and the introduction of the concept of personal finance at an early age both make a real difference. According to the U.S. Department of the Treasury, individuals who receive personal finance education have higher rates of savings, make bigger contributions to their retirement accounts, and have a higher net worth.
Thus while financial literacy statistics may paint a grim picture, there is hope for young adults. The National Financial Educators Council (NFEC) believes it is more important than ever that youth get the knowledge they need to survive in the financial real world.
As a parent, what are you doing to raise your child’s financial literacy? You can share your opinion in the comment section or join us on Facebook & Twitter.