Friday, April 7, 2006

Shocking News: Teens Aren’t Financial Geniuses

Author: Nick
Category: Money
Topics: ,

I wish I could get paid to perform surveys with obvious results. One group responsible for such a survey came out with its annual report on Wednesday. Please suspend your disbelief as I reveal a surprising fact about America’s youth: they can’t tell the difference between a credit card and a minting press.

Seriously, if children are having a hard enough time learning the stuff that’s being taught to them in class, how are they supposed to learn financial concepts that neither their parents nor their schools are teaching them? I bet those students who scored comparatively high on their financial surveys just got lucky and caught a glimpse of a few passing economic news headlines on the internet.

Some startling statistics on the wrong answers given by teens:

  • 55.8% didn’t know they could be held liable for up to $50 of a timely-reported fraudulent credit card charge.
  • 81.4% said state-issued bonds were insured by the federal government.
  • Almost 59% confused social security and 401(k)s with pensions. (…though maybe we shouldn’t be teaching kids to expect social security when they retire.)
  • Over 50% didn’t know that savings account interest is taxable.
  • 44.8% thought a savings bond offered better long-term growth over stocks! Wow!

Of course, I’m a pot calling these kettles black because I certainly received little in the way of financial education growing up. Most of what I know about money I’ve taught myself in the last five years (and keep in mind I’m 23). Other than making sure my own kids get the personal finance instruction I never had, I guess all I can do is feel sorry for another generation that will soon be struggling with credit card debt, uncontrollable spending, and likely prospects of bankruptcy.

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