Survey Shows Most Young People Are Financially Illiterate

The survey showed they have no concept of minimum payments, interest, identity theft or the fact they will be paying off student loans for years to come.

The part of the survey I found particularly alarming was that one-third of high school seniors have credit cards and half have debit cards.  I remember when I tried establishing credit and the first credit card I received was from Sears.  In order for me to finally get approved for a Visa, I had to make payments on a car loan for over six months without any late payments.   My question is, when did the rules get so relaxed that they hand out credit cards to just anyone?   I was amazed to find that 16 year-olds were getting credit card offers, now something is serious wrong when that is happening.  The survey showed that college students didn’t fair well either.

One-third of college students have four credits cards apiece when they graduate, and more than half of graduates have piled up $5,000 each in high-interest debt. The number of 18- to 24-year-olds who’ve declared bankruptcy has increased 96 percent in 10 years.

This is what prompted Sen. Patty Murray, D-Wash., to introduce a bill this week to target financial-literacy starting at the grade school level and reaching through adulthood.

According to the survey one in five people think the way to become rich is winning the lottery, which most of us know you have a better chance at being struck by lightening than winning a mega-millions lottery.

Sen. Patty Murray wants to make sure that students are progressing and that older people have chances to take these classes.

Murray’s bill, co-sponsored by Sen. Thad Cochran, R-Miss., would provide grants to state education agencies that agreed to establish financial literacy standards and assess how well students were doing in elementary, middle and high school. Nonprofit organizations also would be eligible for grants. In addition, grants would be available to community and four-year colleges to offer financial literacy classes for their students and for older adults.

When I was in high school we had several different courses that covered this, one was called Single Survival and the other was Money, Banking & Credit.  Both courses went over basic check writing, balancing a bank statement, budgets, credit card statements, savings accounts and how to deal with car loans.  The benefit of taking Single Survival was it also taught basic cooking skills and how to mend clothes, if you didn’t own a sewing machine.  ( For example:  how to sew on a button or quick fix in tacking up a hem of a skirt.)

Did your high school offer similar courses?

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18 thoughts on “Survey Shows Most Young People Are Financially Illiterate

  1. That truth is shocking. I know that most young people can’t deal with money but I never expected to find out that they didn’t know even the basics. I hope there are certain flaws in the survey.

    My middle school offered a course similar to Single Survival. It was called Labor Studies.

  2. I wonder if the Republican “personal responsibility” advocates will climb on board with Senators Murray and Cochran, and send money to public schools, (that tremor you just felt is them shuddering in horror in unison at the thought), to implement this much-needed plan? Or would the pro-business libertarians prefer to keep the consumers as stupid as possible for as long as possible, in order to maximize profits for their wealthy contributors?

    If the financial world had not become such a game of “Gotcha”, it would be much easier to teach such a class, and potential changes to lending laws and banking regulations, as well as bankruptcy re-reform, may improve things in the future.

    Student loans used to be the lowest interest loans you could get, which was why you couldn’t discharge them in a bankruptcy. The Bush Misadministration ended the low interest through privatization, but kept the anti-bankruptcy provision. Credit card companies have turned into thieves since the 2005 bankruptcy changes gave them almost zero incentives to work with delinquent cardholders. Once they’ve got you, now, they’ve got you, and they want to keep you. Deep in debt.

    “The perfect working model for capitalism is slavery”

  3. We had a one semester course in my senior year called “Economics”, but I can’t recall any life-skills as part of it. Back then, all you had to know was how to write the checks, and you wrote the amounts down in the register as you went. Then you went home, broke out the abacus, and calculated the balance.

  4. Good to see you House & Dimitar =)

    Where I use to work, we had a number of college students working part-time. I was amazed at how much debt some of them had managed to rack up. A couple owed more on credit cards than I paid to remodel my kitchen but, the majority were very responsible and careful about spending.

  5. Just in case anyone doesn’t know this…if someone has $5000.00 on a credit card and makes the minimum payments (as most people do), it takes more than 39 years to pay back that $5000.00.

    Talk about slavery!! Giving that to children?? It’s fucking obscene.

  6. At infants school (5-7 years old) we were taught to make change with government issue plastic replicas of actual coins. There was no official instruction after that.
    There was however the National Post Office Savings Account scheme where anyone, especially kids could ‘bank’ and earn interest on their savings (the interest was earned from being linked to government bonds).
    A kid couldn’t actually sign a check (for obvious handwriting reasons) but instead one could ask for a cashier’s check to pay for something (like a really big model aeroplane or new soccer boots!) instead of drawing out the actual cash.
    In my secondary school (i.e.high school, 11-18) Economics was an elective—I wish I had taken it.

    Compound interest was just a tiny percentage (ha-hah!) of Math.

    It wasn’t until my all-boys school was forced to turn co-ed that any attention was paid to ‘life skills’ but again it was very basic (learning how to cook and domestic budgeting in preparation for university life). That was it.

    .

  7. Blimey! ‘Freb’!!(freedomrebel).
    As I live and breathe! Nice to see you here!

  8. It is great to see you 5th Estate =)

    I hope life has been treating you well…

  9. freb…

    well life hasn’t been treating me harshly thus far–any problems are largely my own doing.
    I hope you are well too.

    If you do nothing else, drop by here at the Zoo for Friday night and Saturday threads–they are open and/or themed and reflect the eclectic nature of the Zoo’s ‘critter-sphere’. Cathartic, confessional, crazy and confounding ( and educational too!). Big fun and no asshole trolls.

  10. btw, haven’t seen you on TP for ages, freedomrebel, I hope your absence from there was just a case of ennui,burnout and not due to anything seriously serious. :(

    You were always a major contributor at TP.

    • This is one of her posts, 5th. :)

      She’s been a Critter for a while, but she recently took a break and hasn’t been around the Zoo or TP.

  11. Ooooh!

    Zooey!

    Suggestion for Friday night thread theme (not my original idea but anyway…)

    You have a two minute time-warp phone call to an ordinary citizen of the 16th Century (1500s). Knowing what yo know now, what advice would you give that person in those two minutes?

  12. Zooey, freedomrebel…

    it’s against my principles to be dictated-to by the tag format!
    Seriously, can’t you all bend to my laziness and just proved a byline at the top of every post? :D

    • Sorry 5th, I’d feel terrible enabling your laziness that way. Besides, this was very entertaining, and it was completely at your expense. I love that. ;)

      About your time-warp theme — fantastic!!! Now all I have to do is remember it. Now my laziness kicks in….

  13. Thanks 5th Estate :)

    My daughter was in town from Canada for 2 1/2 months but, alot of other things happened during that time also that needed my attention.

    I miss TP, I will try to post there sometime this week. I will also try to stop by on Friday nights at the Zoo.

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