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.
This post comes from Krystal Steinmetz at partner site Money Talks News.
When 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.
Of 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.
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
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.
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
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.
AMEN jdmeck.....we've raised a generation that thinks everything is just mailed to them
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