An NFEC study example was a personal finance survey administered between July 15 and 17, 2017, asking young Americans (18-24), “What high school-level course would benefit your life the most?” Respondents represented 49 of 50 states. Almost 50% of the 5,123 participants selected money management over science, math, or social studies.
A second study asked respondents, “During the past year, about how much money do you think you lost because you lacked knowledge about personal finances?” When the responses were averaged, the amount was $1,171 money lost in the past year. Close to 7% reported that lack of financial knowledge had cost them more than $10,000.
Experts and professionals within the financial education and services space may seek empirical research studies to support sound decision-making and guide program development. The National Financial Educators Council is the industry source for evidence-based surveys and materials. For example, the NFEC has conducted a personal finance survey to measure knowledge, attitudes, and behavior regarding money management topics.
With a sample of 1,309 American teens and young adults (aged 15 to 18), the NFEC used a web-based questionnaire to ask about respondents’ knowledge around key concepts of personal finance. This personal finance quiz was based on the areas defined by national financial literacy standards as most important to gaining a solid background in basic money management skills. The survey was conducted between January 2012 and August 2013.
The NFEC’s purpose in collecting personal finance statistics via online surveys and face-to-face interviews is to identify best practices for teaching financial literacy and to illuminate those important areas in which the population could use more education. In the 2012-13 youth survey, the organization discovered that more than two-thirds of the young people (N=952; 72.7%) taking the exam did not achieve a score above 70% correct, and the average score across all respondents was 58%. This finding clarifies that American youth may be lacking knowledge, skill, and motivation in several key areas.
Becoming literate in the subject of personal finance is a two-part process: 1) gaining content knowledge around money management topics; and 2) having both the intent and the ability to take action toward improving one’s financial situation. The NFEC’s youth and young adult survey indicates that the financial literacy movement can—and should—make an effort to motivate young people to learn about money, as well as providing them with key financial knowledge that will empower them toward their futures.