April is Financial Literacy Month, so I’m going to share a few facts with you about where we stand as a society when it comes to understanding our personal finances. Below are some statistics that were pulled together by the National Financial Educators Council:
- Eighty-five percent of college graduates plan to move back home after graduating. (Twentysomething Inc. 2010 survey) The rate has risen from sixty-seven percent in 06’. (Jessica Dickler, CNN staff writer)
- Only fifty-nine percent of the young adults in Generation Y (ages eighteen to twenty-nine) pay their bills on time every month. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
- Ten percent of American with mortgages reported being late or missing a mortgage payment in the last year and seven percent of adults are either getting calls from collectors or thinking about filing for bankruptcy. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
- Almost fifty percent of those who closely monitor their finances say that they learned about personal finance from their parents or at home more frequently. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)
- About thirty-four percent of parents have taught their teen how to balance a checkbook, and less than that has explained how credit card interest and fees work and ninety-three percent American parents with teenagers report worrying that their children might make financial missteps such as: overspending or living beyond their means. (Charles Schwab’s 2008 “Parents & Money)
- Around sixty-nine percent of parents admit to feeling less prepared to give their teenager guidance about saving/investing than they do having the ‘sex talk’ with them. (Charles Schwab’s 2008 “Parents & Money)
- Three out of every four Americans say they aren't saving enough. (2008 Pew Research Center)
- Fifty-four percent of college student respondents had overdrawn their checking account and eighty-one percent underestimated the amount of time it would take to pay off a credit card balance by a large margin. (Center for Economic and Entrepreneurial Literacy Survey)
- Forty percent will never gain a net worth in excess of ten thousand dollars. (American Dream Education Campaign)
Pretty ugly, huh? What’s worse is that things appear to be heading in the wrong direction. This doesn’t bode well for the next generation. Unless adults learn to manage their personal finances, the future is rather dreary. Bad credit will cost people more in the long run – higher interest rates, potential lost job opportunities, and higher insurance rates, just to name a few. Saving and staying out of deep debt are skills that can’t be put off either. The earlier people are taught about basic financial literacy concepts, the better off they will be later in life.
April is Financial Literacy Month. If you don’t understand basic concepts in managing your money, get help now. Find someone you trust to help you get a handle on your finances. There are lots of online resources, but make sure they are reputable. Destinations, the Credit Union where I work, has sections of our website devoted entirely to educating kids and young adults about personal finance. It’s free and can be a lot of fun!