Making major personal finance decisions can be daunting for anyone. Whether the decision is related to paying back student debt or how to invest for the first time, the outcomes of these decisions have a long-term impact on the quality of our lives. Smart decisions can lead to achieving financial independence, while bad decisions can lead to years of being stuck in the “hole”. Even though it’s clear that financial literacy is important, there’s a big problem: it’s actually been dropping for years in the United States.
DIAGNOSING THE PROBLEM
Today’s infographic was done in conjunction with Next Gen Personal Finance, a non-profit that provides a free online curriculum of personal finance courses geared to students. The graphic paints a troubling picture of the current financial literacy situation in the country, while demonstrating why personal finance is a crucial area of study for our youth.
Here are some of the indicators that show literacy is dropping:
- The U.S. ranks 14th globally in terms of financial literacy
- With a 57% literacy, the U.S. beats Botswana (52%) but gets edged out by countries like Germany (66%) or Canada (68%)
- Only 16.4% of U.S. students are required to take a personal finance class in schools
- 76% of millennials lack basic financial knowledge
- Between 2009-2015, Americans got worse at answering five key personal finance questions posed by FINRA – a major U.S. financial regulator
And worse, this lack of knowledge is translating into anxiety and even fear.
- Four of five adults say they were never given the opportunity to learn about personal finance
- 70% of millennials are stressed and anxious about saving for retirement
- 22% of millennials feel overwhelmed about their finances
- 13% of millennials feel scared
Meanwhile, student debt is soaring to new highs – how do we put our students in a better spot to succeed?