Today's Students Are Likely to Become Tomorrow's Financially Strapped Adults
America's young adults are leaving school without any basic skills in personal finance, putting them at high risk of becoming adults who end up over their heads in debt, in bankruptcy court or without adequate savings to retire, shows a new book just published by the Jump$tart Coalition for Personal Financial Literacy (a nonprofit organization with more than 70 members, including AAFCS, federal agencies, universities, nonprofit associations, and sponsors of education programs). The coalition's goal is that, by the year 2007, every, student will have the skills to be financially competent on graduation from high school.
Our Vulnerable Youth: The Financial Literacy of American 12th Graders, authored by Lewis Mandell, Ph.D., dean of the University at Buffalo School of Management, provides an eye-opening look at the current state of personal financial literacy among America's youth. The 120page book contains facts and details from Mandell's historic benchmark survey of more than 1,500 12th graders, as well as the actual questionnaire. Overall, students answered just 57.3% of the 31-question survey correctly. Only 10.2% scored a "C" or better.
In addition, the book presents new gleanings from the survey since its release in May 1997, including a finding that hands-on experience does little to improve a young person's understanding of personal finance. Student's who don't use credit cards, for example, had higher test scores (57.9%) than those who use their own (53.3%) or their parents' (57.7%). "This surprising finding indicates that, for students, experience alone is not a very good teacher," said Mandell. "Unless it's accompanied by conceptual or theoretical understanding, experience adds nothing to a young adult's ability to maneuver today's complex world of financial services. …