Lack of financial education can cost Americans $30,000 over our lifetimes, yet most high schools still don’t require students to learn how to manage money.
Americans are putting a price tag on their financial ignorance.
They estimate they could’ve held on to nearly $1,200 had they learned how to manage money, says an online survey from the National Financial Educators Council.
There are only five states in the U.S. where personal finance education is required for students to learn before high school graduation. That means a vast majority of the country is going out into the world without basic financial knowledge. And it shows.
More than 1,500 U.S. adults were asked one question by the NFEC: “During the past year (2017), about how much money do you think you lost because you lacked knowledge about personal finances?” The average response: $1,171.
Forty-one percent of Americans estimate they lost $500. Another 18 percent lost up to $2,500 last year, says the survey. And that number adds up fast over our lifetimes.
The NFEC ran a similar survey last year on financial ignorance. Rather than just the previous year, Americans were asked to approximate how much money they’ve lost during their entire life.
Over a quarter of U.S. adults 35 and older approximated they lost more than $30,000. But the number is likely higher — after all, these same people admit they aren’t good at tracking their money.
Why should our children repeat our mistakes?
We should want better for the next generation.
Last year Debt.com reported that only one third of Americans felt their financial literacy was average. And who did they blame for their lack of knowledge? Well, 40 percent put the blame on their parents.
But if parents never learned how to handle money, they can’t pass their wisdom on to their kids. Then financial education in schools is the best option.
We learn reading, writing and mathematics in grade school — why not personal finance?
Slate Magazine ran a story two years ago with the headline: “stop trying to make financial literacy happen.” It claims financial literacy to be a “distraction” from consumer protection. Fox Business also questioned whether financial education can be taught in schools.
Americans want finances taught in school
Despite the pushback, most Americans seem to disagree.
Over 90 percent of students and parents said they thought personal finances should be taught in schools, in a report from Next Gen Personal Finance, a nonprofit organization. Then in 2016, another poll, this one from RBC Wealth Management and National Bank found that 87 percent of Americans felt the same way.
“My ultimate frustration is that this solution is relatively easy, and it’s nonpartisan,” Dvorkin said. “We’re not talking about complex issues like deciphering the tax code or figuring out healthcare costs. We’re talking about a simple high-school class with potentially huge results.”
Twenty-two percent of 15-year-old high school students in the U.S. scored below average in a worldwide financial literacy test.
Students from China, Belgium, Russia, the Netherlands and Australia all scored higher than those in the U.S., according to the study.
The test has been administered by the National Center for Education Statistics twice. We scored below average both times.
Dvorkin thinks it’s time to change that by pushing for financial education in schools.
“I can’t think of many initiatives more noncontroversial than teaching Americans to save more and spend wisely,” Dvorkin said. “Isn’t it worth the effort?”
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Article last modified on February 15, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Who Will Teach Our Children to Be Financially Literate? - AMP.