September 23, 2008
We teach trig but not money 101?
There’s a great opinion piece in Tuesday’s Christian Science Monitor that mirrors many of my posts over the past few years lamenting the lack of financial knowledge in people under 40. We simply don’t learn finances in school – and we;’re the lucky few if we learn it from our parents!
Here’s an excerpt:
“Why does the school system require classes such as math, English, and science, but not basic personal finance?
We force students to learn trigonometry, yet how many of us ever use it again after graduation? In contrast, how many transactions involving money will we each conduct on a daily basis for the rest of our lives?
Think about each time you purchase something with a credit card, make a car payment, reconcile your bank account, or pay taxes. Even though these transactions are a daily occurrence for most consumers, we receive very little financial education on them from our school system, or even our parents.
Results from my recent online consumer survey, FinancialLiteracyQuiz.com, show that:
•Only 50 percent of those who took the survey know that property taxes and mortgage interest are tax deductible
•Only 40 percent know that their liability for credit-card fraud is limited to $50.
•Only 33 percent know what “annual percentage rate” (APR) means.
•Only 32 percent know what required deductions are taken from their paycheck.
So, why should Americans care? These are basic pieces of information that are critical to financial decisions. And the better job we do of financially educating the, the more financially independent they will be. This will not only mean breaking free from ongoing support from parents or destructive financial habits, but it could potentially save a lot of money.”