American high school students learn the basics of government and history, mathematics and science (or at least they are supposed to), but many students graduate from secondary school, and even college without a rudimentary understanding of personal finance.
Considering the number of financially struggling and unemployed Americans, there has never been a time when financial literacy has been more important.
Earlier this week, Federal Reserve Chairman Ben Bernanke spoke to a group of the nation’s teachers at a town hall meeting in Washington, and emphasized how critical financial literacy is for the long-term needs of the nation.
“Financial education supports not only individual well- being, but also the economic health of our nation,” Bernanke said. “Consumers who can make informed decisions about financial products and services not only serve their own best interests, but, collectively, they also help promote broader economic stability.”
The Visa International Financial Literacy Barometer 2012 recently surveyed 25,500 participants in 28 countries about the strength and weaknesses of financial education in across the world.
Survey participants were asked questions about household budgets, savings for emergencies, teenagers’ and young adults’ ability to manage their own money, and whether financial literacy courses should be required in schools.
Survey results pertaining to the United States include:
- 54% of American respondents said that they follow a budget closely or most of the time.
- 44.4% said that they didn’t have a budget.
- High-income and low-income respondents had similar rates in terms of failure to budget, with 24.8% of those earning under $20,000 per year and 24.7% of those earning over $75,000 per year saying they did not maintain a budget.
- A total of 59.3% of people earning less than $20K said that they don’t budget. 37.7% people earning under $20K say that they do have a budget that they follow at least most of the time.
- The percentage of those that budget rises with income. In the top income bracket ($75k+), 60.6% of respondents said they have a budget that they stick to at least most of the time.
- In the U.S., the average person had 2.9 months of expenses saved.
- 75.7% of people said that they had at least one month of expenses saved and 25.5% said that they had over 6 months’ saved.
- 49.8% of those making under $20k said that they had no savings, while 35.8% of those making over $50k said they had over 6 months of expenses saved and 41% of those making over $75k reported that they had over 6 months of expenses saved.
- American families talked to their kids about finances 25.8 weeks out of the year.
- 66.1% of American respondents said that they talked to their kids about money at least once a month.
- The United States has the worst opinion of its teenagers’ money management skills, with 70.5% of respondents saying that U.S. teens don’t understand money management basics.
- In the U.S., the average age when people felt the government should require kids to start learning about money was 11.9.
View the full study results to learn about how other countries responded to the survey.