218 National Financial Literacy Month - Day 11 - The Current State of Youth Financial Literacy

First of all, the financial wherewithal of youth is very
important because it is a forecast of future financial decisions
and the results from them. Thousands of high school students were
surveyed about their preparedness for the kind of financial
decisions and tasks that adulthood requires. 


As students draw closer to their transition to adulthood, the
survey reports consistently low levels of readiness to take on
financial tasks from evaluating financial products to
establishing and maintaining credit to understanding how to pay
for college. These results are not surprising considering
financial literacy is not mandatory in K-12 or college.


So exactly what are financial skills? Financial skills are
knowing how to find, process, and take action based on the
information and having confidence in one’s ability to reach
financial goals. Skill and confidence play an important role in
building financial well-being, the low levels of preparedness
among young people could be a sign of trouble as students finish
high school and move toward financial independence.


Understand that prior to taking part in financial education, less
than a third of high school juniors and seniors reported that
they felt prepared to compare financial institutions and select
one that best meets their needs. Slightly more students but still
less than half felt they could select, open, and manage a savings
or checking account. 


Young people also reported low levels of confidence in their
ability to establish financial habits that contribute to
long-term financial well-being: budgeting and managing credit.
Half of juniors and seniors said they were “prepared” or “very
prepared” to set up and follow a budget, while just a third (32%)
felt they could check their credit and maintain good credit over
time.


 The skills of budgeting and managing credit are essential
as young people move toward financial independence. The decisions
they make in the next one to two years begin to carry
consequences that can last much longer, directly impacting their
lifetime financial well-being.


Other important aspects for youth include the ever-changing
banking system which is more virtual than ever before, and
 navigating the process of applying for college and
financial aid for two-year and or four-year colleges. The bottom
line is this, youth of today need to be financially literate, and
the sooner they discover how to the better. I have confidence in
our youth, they will find a way to become financial literate and
when they do, we will have a stronger economy, and  country.