Report shows U.S. teens stagnant in financial literacy
Teenagers in the United States are in the middle on a global scale when comparing countries on financial literacy.Students were tested on their knowledge of banking, calculating costs and making good spending decisions. Results from an evaluation by the Program for International Student Assessment showed 22 percent of U.S. students lack basic financial skills.
According to Paul Golden, a spokesman for the National Endowment for Financial Education, U.S. teenagers’ average score has not been affected in the few years since the last test.
“The first time we had done this assessment, we found that the U.S. ranked right in the middle of the pack,” said Golden. “And the new findings show that we really haven’t really moved the needle at all.”
Out of the 15 countries that participated in the assessment, the United States ranked seventh overall. China ranked the best over every other country, followed by Belgium and Canada. The worst performing countries were Chile, Brazil and Peru.
Golden said that other countries may have better systems in place to prepare their younger generations for financial situations.
“There’s a better defined national strategy to teach financial education to students broadly. And second, there’s more students involved in the banking system, which is a great teaching tool. So those are the things that we need to look at here as deficiencies,” Golden said.
Eight countries, including the United States, competed in both the 2012 test and the most recent test. Italy and the Russian Federation had vast improvements to their average scores, while Poland, the Slovak Republic, Australia and Spain showed measurable declines.
American students’ average scores were on par with the average scores from the Organisation for Economic Co-operation and Development, the organization that coordinated PISA.
The PISA study found that students with a bank account scored on average 42 points higher than students without one. Students from higher-income schools scored marginally better than students from lower-income schools.
According to Golden, U.S. students could do better than the only one in ten teens achieving the highest proficiency level as a top performer, defined as a student that looks ahead to solve financial problems or makes the kind of financial decisions that will be relevant to them in the future, and that starts at home.
“This does need to be happening much earlier in the development of a child,” said Golden. “And so as parents we can’t assume that our children are going to be afforded this education in schools. You know, I’m a parent of two young kids and it’s very easy to sit down and talk to them about the dangers of sex, drugs and alcohol, but money still is one of those elusive conversations. And we need to be better at talking to our kids, exercising our influence and doing it regularly.”
PISA is a triennial international survey which aims to evaluate educational systems worldwide by testing the skills and knowledge of 15-year-old students in science, reading and mathematics.