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US teens don't know jack about finances

A recent study shows that American teenagers trail many of their global peers when it comes to financial literacy.

By MSN Money Partner Jul 14, 2014 12:08PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News on MSN MoneyWhen it comes to money, American teens have a lot to learn.


That was a finding of a recent financial literacy test administered by the Paris-based Organisation for Economic Cooperation and Development. It was the first test of its kind, assessing teens' knowledge of personal finances -- including banking, taxes and how interest rates work -- and their ability to apply those skills to financial problems.


Teens with MP3 player © RubberBall, SuperStockOf the 18 countries tested, the U.S. ranked ninth, sandwiched between Latvia and the Russian Federation. Chinese students in Shanghai (the only Chinese city tested) earned top scores. Belgium, Estonia, Australia and New Zealand also ranked near the top. Colombia, Italy and the Slovak Republic rounded out the bottom three performers.


In a press release, the OECD said the overall results of the 29,000 15-year-old students it tested were less than impressive.


"Around 1 in 7 students … are unable to make even simple decisions about everyday spending, and only 1 in 10 can solve complex financial tasks," OECD said.


One seemingly simple question from the test required that teens know how to read a pay slip and understand the difference between gross and net pay.


According to CNN Money:

Nearly 20 percent of U.S. students didn't even reach the baseline level of proficiency, "or the basic skills that are needed for success later in life," according to Michael Davidson, head of early childhood education at the OECD.

The Associated Press said just 19 states in the U.S. require a personal finance course in high school.


The OECD defined financial literacy as an essential life skill for teens. The test results indicate that the U.S. has a lot of work to do when it comes to educating its kids on financial matters. CNN Money said:

"If we want to have young people who are globally competitive in 20 years, having a good solid basis of understanding their financial lives early is important," said Ted Beck, president of the nonprofit National Endowment for Financial Education. "This should be a national priority."

How well would you score on the test? Find out here.


When I was a senior in high school, I had a free period open, so my mom encouraged me to take our school's "Prep for Life" class. Financial literacy was one of the focuses of the class. We learned how to write a check, balance a checking account and make a monthly budget (for rent, food, entertainment, gas, utilities, etc.). That was it, but I guess it's more than some students get.


Were you surprised to see where American teens rank when it comes to financial matters?


More from Money Talks News

26Comments
Jul 14, 2014 12:59PM
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That's because their parents only know how to live off the government and schools are too busy worrying about everyone's feelings.
Jul 14, 2014 10:54PM
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I think the headline could be generalized to say "US teens don't know jack about life."
Jul 14, 2014 9:02PM
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This doesn't surprise me one bit!


Kids coming out of high school can't read well enough to complete an employment application and don't have enough math skills to maintain a checking account. Their grammar and communication skills are equally atrocious.


These kid's are this country's future.


Provided we still have a country.

Jul 14, 2014 1:05PM
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I took the test. I would debate the answer they gave for the final question. Going deeper into debt even at a lower rate is not always a good thing.
Jul 14, 2014 1:41PM
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When their parents are dumber than a doorknob, what do you expect?  But these kids do know how to put a condom on a  banana and how to use a cell phone.  Other than that, pretty ignorant.  Welcome to the dumbing down of America, courtesy of our government run, union controlled, monopoly k-12 schools.
Jul 15, 2014 1:27PM
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Parents have a responsibility, not to raise children, but to raise responsible adults.

 

When I was 12 I had a small grass cutting business where I made $1.00 per lawn.  My father charged me 10 cents as I was using his lawn mower and gasoline.  He didn't really need the dime, but it was his subtle way of teaching me about cost of goods, wear and tear on equipment etc. 

 

When I turned 16 I was also made responsible for paying the additional insurance cost of being a part time driver.  So I got a job and quickly learned about taxes and social security etc. 

 

 When I got out of college I was also expected to pay rent when I decided to live at home

 

 Parent's can do lots of stuff to educate their children and ease them into the adult world ....and turn them into responsible adults instead of dependent grown up children.  

 

It takes effort to be a good parent 

Jul 14, 2014 9:44PM
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That is an amazingly easy test.  In fact, it is too easy.  I would say that 99% of teens should be able to pass it.  If they can't the problem is NOT the schools.  The problem is a polluted gene pool.


Jul 15, 2014 12:00PM
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It goes all the way to the top - even our government can't balance a check book.
Jul 15, 2014 4:06PM
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Doesn't surprise me at all.  All I see kids from the US doing is using their cell phones, riding their bikes, scooters, or skate boards.  It's not the schools.  It should start in the home.  I remember helping my mother complete payment stubs, money orders, check payments for utility bills.  She would make me open the bill and read the charges, etc.   That gave me a sense of responsibility and maturity as a kid and now as an adult, I do the same thing... open my bills look through them, check over my pay stub, credit card charges, etc.  How many parents do that today?
Jul 15, 2014 2:21PM
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Were graduating kids who cannot read. But the goverment cares more about whats in their lunches. Demoncrats have no answer for how to better education bc they rely on the simple minds of people who cannot think for themselves.
Jul 15, 2014 10:23PM
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Of course they don't know anything. They are in the public fool system, the same system that hasn't taught the past two generations anything about Communism, tyranny and history repeating itself.
Jul 15, 2014 1:33PM
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govt run schools don't want kids to know finance.  Because if kids are taught it and know it, the govt won't be able to control them by handing them a check at the beginning of every month.

 

instead the schools teach the kids that its all the rich mans fault.

Jul 16, 2014 8:42AM
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My son manages his own investment account at nineteen. He listened and learned. Test him and I bet he kicks the Chinese ****.
Jul 16, 2014 8:00AM
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What is there to know these days about finances? The rich are corrupt and control everything. If you are lucky enough to be employed, spend like Hell until you aren't. 
Jul 17, 2014 6:43PM
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AMEN jdmeck.....we've raised a generation that thinks everything is just mailed to them

 

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