As a guest lecturer for the graduating engineers at a local university, I had the opportunity to help seniors consider the benefits of smart personal financial decisions. I began the lecture with a question: How many of you have had a class in personal finance at any point in your high school or college education?
You may be surprised with their answer. Generally, nobody in a lecture hall of 200 students has ever taken a class on personal finance any time during their high school or college education.
You may ask, “How do people rack up thousands in debt? How do 1/3 of Americans put nothing—not even $10 a week—into their savings?”
Let me give you some sobering statistics:
- 2/3 of 16 to 18 year olds don’t know how credit-card fees and interest work.
- Only 17% of college students pay off their credit-card balance each month.
- 54% of college students have overdrawn their bank account.
Financial illiteracy is not contained within the younger generation.
- 56% of adults say they don’t have a budget for managing money.
- Less than 20% know what a 401(k) plan is.
Only four states require a special stand-alone course on personal finance during high school. Ohio is not one of them. Seven out of ten parents say they feel more prepared giving the sex talk to their children than giving them financial advice and guidance.
You can’t guarantee people won’t get into financial trouble. You can’t guarantee they won’t spend too much or save too little. But, we should make sure everyone receives a financial education so they know better.
For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.