Need for Money Management Knowledge Growing, According to Financial Illiteracy Statistics

According to the American Dream Education Campaign, most students aged 15-21 report feeling unprepared to navigate today’s complex financial landscape. This finding is just one of the compelling financial literacy statistics that have driven the National Financial Educators Council into action. The NFEC, an independent financial education group with a social enterprise model, takes a holistic approach to promoting financial literacy – an approach which rests on the foundation of empirical research using rigorous methodologies.

A good deal of the research upon which NFEC programs are based was conducted by the organization itself. The NFEC relies heavily on empirical data to guide curriculum development and measure campaign success. One example was a study that took place across 2012-13 wherein more than 1,300 students aged 15-18 responded to an online financial literacy test. These data were analyzed and compiled into a set of youth financial literacy statistics that are available on the NFEC website (www.FinancialEducatorsCouncil.org). According to these findings, young people’s need to build money management skill sets is growing – a total 72.7% of respondents scored lower than 70% on the test, with an average score of 58%.

The recent Great Recession in the U.S. served to underscore how poorly prepared our citizens have become to handle their personal finances. Although some recent indicators point to economic recovery, staggering problems such as bankruptcy, foreclosure, and crushing debt loads remain rampant. When the NFEC conducted a second research study with U.S. adults in 2012-13, the findings indicated that 96% of those who completed a web-based survey believed college students should be mandated to complete a financial education course before taking out a student loan. A further 93% of respondents expressed the opinion that the fact that students do not completely understand the terms and consequences of such loans was a “very big” or “big” problem. These are exactly the kinds of financial education statistics that form the impetus behind the NFEC’s state-of-the-art programming to teach money skills and accurately measure the impact of such programs.

The NFEC is working to address financial illiteracy in the U.S. and abroad by developing a comprehensive set of personal finance coursework for all ages. In addition, the organization offers tools to quantify the results of financial education and raise awareness about the financial literacy movement.