Financial Literacy and Education
The state of understanding of finance and economics at their most basic level is distressing in the United States. The 2009 Financial Capability Study, prepared by Dartmouth College, Applied Research & Consulting, the FINRA Investor Education Foundation, and the US Treasury’s Office of Financial Education found serious deficiencies in the average American’s knowledge of simple finance and economics concepts and calculations. The study found that 85% of respondents could not answer five simple questions about finance.
It is generally agreed that the state of financial illiteracy in our country is too high. Financial illiteracy is a widespread problem that effects men, women, and youth in every state. Women are disproportionately impacted. Members of the US military tend to score lower on financial literacy tests than do their civilian counterparts.
Studies have linked financial illiteracy with the subprime mortgage problem, the U.S. debt crisis, and the recession of 2008 – 2010.
Take the financial literacy quiz and see how you fare.
There are several good web sites that cover the problem of financial literacy in the United States:
- Financial Literacy and Ignorance
- RAND Financial Literacy Center
- U.S. Treasury Financial Literacy and Education Commission (FLEC)
- Institute for Financial Literacy Women’s Financial Literacy Project
- EconKids at Rutgers University (includes good financial literacy links)
- K-12 Financial Literacy Resources (California Department of Education)
- The Bank of Dad (CBS MoneyWatch)
- Financial Status of the American Middle Class (Consumer Federation of America)