Each year, the National Financial Educators Council releases a National Financial Literacy Test, which is taken by Americans of all ages, financial positions, and backgrounds. The test measures participants’ knowledge as it pertains to earning, saving, and growing their money.
As of 2020, the average score of 15- to 18-year-olds who took the test stood at 68 percent, just shy of a passing score. In fact, of the 60,813 people who have taken the test since it began in 2015, only 59 percent received a passing score of 70 percent or higher. Additionally, the National Financial Educators Council also released results which found that poor financial literacy contributed to Americans losing an average of $1,634 each in 2020. That is a cost of about $415 billion to the country at large.
Those numbers may seem a tad apocalyptic, but there is a silver lining. Younger generations of Americans appear willing and able to learn more about financial literacy. The National Financial Educators Council asked 1,101 young adults ages 18 to 24 what high school-level course would have benefited their lives the most. The majority (51.4 percent) responded with “money management.”
It appears financial literacy classes really do help. The FINRA Investor Education Foundation’s State Financial Education Mandates study found that Georgia, Idaho and Texas all saw increased credit scores and lower delinquency rates on credit cards three years after implementing a financial education mandate in public schools. Additionally, all three states saw significant improvements in participants’ scores on the National Financial Literacy Test with an overall 8 percent rise in score among 15- to 18-year-olds.
How to improve your financial literacy
April is Financial Literacy Month. Both a celebration and a challenge. Here are some helpful tips:
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