COLLEGE STATION — Although students will be returning to school, there is one critical life skill they likely will not be taught in any classroom. That’s because personal financial management is a life skill not typically found in school curriculum.
As school let out in May, the Jump $tart Coalition for Personal Finance Literacy announced results of a nationwide study they sponsored. Dr. Lewis Mandell, dean of business at Marquette University, surveyed 12th-graders’ knowledge about income, money management, saving and investing, and spending. Only 57 percent of the questions were answered correctly by the students. More than half of their success in answering questions correctly was credited to questions that tested terminology rather than reasoning ability.
While almost 89 percent of the students in the study knew that salaries, wages and tips were the main sources of income for most people ages 20 to 35, less than half thought that if a person’s income doubled from $12,000 to $24,000 a year, their income taxes would at least double.
Almost two out of three teens in the study said they would have no liability if their credit card were stolen and a thief ran up $1,000 in charges.
Less than 15 percent said stocks are likely to have the highest growth over 18 years for an amount of money put away for a child’s education, while over half selected U.S. Government savings bonds and one-fourth said a savings account.
Over half said a bank certificate of deposit is not protected by the Federal Government against loss. Nearly one in five thought U.S. Savings or Treasury Bonds are not protected.
Nearly a third said retirement income received from a company is called Social Security.
Over half think they will be covered by their parents’ health insurance until they marry or leave home — regardless of their age.
Nearly half think they can check their credit record anytime for free. Close to one in five said they cannot see their credit record or think only the FBI and lenders have access to their credit record.
Half of the teens think interest earnings from their savings account may not be taxed. More than one-fourth of the teens use a credit card, either their parents’ or their own.
The good news is that three out of four of the teens have a savings and/or checking account. High school officials can contact county Extension agents for family and consumer sciences to get information on teaching High School Financial Planning, a curriculum for high school juniors and seniors to learn basic financial management skills they will use the rest of their lives.