Financial Illiteracy
April 21st, 2006
A recent article in the Las Vegas Review-Journal shows that most teenagers are financially illiterate. On average, most high school seniors “could correctly answer barely half of the questions on a test about personal finance and economics.” They were also oblivious to the dangers of government spending and the concept of having to pay for the retirement of others through Social Security.
It wasn’t a matter of demographics. “From the richest families to the poorest, most parents aren’t talking to their children about money.”
The RJ suggests taking time at family dinner to discuss personal finance principles. Children aren’t likely to learn these principles if not from their parents.
Source: Las Vegas Review-Journal
Entry Filed under: Firevalt
5 Comments Add your own
1. Debt Hater | April 25th, 2006 at 6:08 pm
Hey guys, how is your financial software coming? I’m still interested in it.
2. MoneyMoney101 Simple Money Management | August 14th, 2006 at 12:34 pm
If I only knew now what I knew then……. Know one ever told me that starting at age 25 if I saved $65 a month by age 65 I’d have a million dollars. And know one ever really taught me the importance or the principle of savings. Really, if I had to choose what my parents taught me about money—how to save it, how to make it or how to spend it—I’d probably have to say, what they taught me the most is how to spend money.
For many preteens and teens today, although bright, educated and smart, they fail when it comes to basic, simple money management skills. 4 out of 5 teenagers can not tell you what goes on inside a bank. And 73% didn’t know that a stock would yield more over time than a savings account, according to Jump $tart. Why? Because finance and money management are not being taught in schools or is just now starting to be taught in certain areas of the country in high schools. Plus, high schools are experiencing the largest dropout rate in their history—1 dropout every 7 seconds or 1 million drop outs in 2005. Plus, a minimum wage increase has just been turned down and wage stagnation is at its worst in 30 years.
If you don’t take the time to teach your children the principles of money NO ONE ELSE WILL! MoneyMoney101 for preteens and teens is coming! Stay tuned.
3. Amy Rhoads | November 15th, 2006 at 1:10 am
Hey RKM! I just found this blog while searching tonight. I love it.
I just wanted to comment that many adults don’t have the money management skills and kowledge to even begin to teach their kids in the first place. I come from a family that was “just getting by” and even had to go to our Church for financial assistance at times. I definitely didn’t learn anything about money management from them. I just heard “get a good education and then you will get a great job that pays well and you won’t have to live like me.” That doesn’t really cut it…..
If children aren’t learning money skills in the home or at school—it’s a good indicator that many adults don’t have the understanding to teach them. While it’s good to teach our children, we must also make sure that adults have the same education.
I am currently reading The Richest Man in Babylon. I love it! I am also reading Rich Dad Poor Dad. These books have changed my perspective. I am no longer a “victim” to my circumstances I understand that I have the power to change them and to achieve financial freedom. I really do belive that this is possible. Before I could actually believe this, I had to do a mind make-over and realize by educating myself and putting that education in practice, I can control my financial destiny to a greater degree than I thought possible.
Now that I have that desire and belief that I can do it I am just beginning my journey to gain financial education. That gets me a little discouraged to think that I am 25 and just now “getting it” but then I step back and look at my father who is 57 and still doesn’t “get it”.
Any suggestions on helping me begin my financial education journey?
4. Richard | November 25th, 2006 at 12:49 pm
Hey Amy! Glad you found the site! Those books you’re reading are good ones. I also like the Millionaire Mind, and The 5 Lessons a Millionaire Taught Me. None of these books have much hype — they’re mostly about living within your means and paying yourself (savings) every month without fail. The Dilbert post on this blog is actually a good summary of good finance principles. We’ll be posting more books and ideas here as we find them. If you find any let me know!
5. Wisdom from the Rich Dad &hellip | January 13th, 2007 at 8:01 am
[...] Firevalt reported that a recent article in the Las Vegas Review-Journal shows that most teenagers are financially illiterate. [...]
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