U.S. Kids Lagging In Understanding Money Management And Finance

July 19, 2014 | 7:13 PM
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Khaled Elfiqi / Landov
In 2012, The Program for International Student Assessment (PISA) financial literacy exam was given to about 29,000 15-year-olds in 18 countries and economies.  An analysis of results by the Organization for Economic Cooperation and Development (OECD) shows that U.S. students ranked 8th (tied with Latvia, although the U.S. students scored a few points below their Latvian counterparts and just below the mean score for all countries.)
Students from Shanghai, Estonia and the Flemish Community of Belgium led the pack, while Italy and Colombia’s scores trailed at the bottom.
A closer look at the U.S. results revealed a number of useful insights into students’ understanding of financial knowledge and skills.

Among them:
  • More than one in six students in the United States – 17.8% compared with 15.3% across OECD countries – does not reach the baseline level of proficiency in financial literacy.
  • About one in ten students in the United States is a top performer (9.4%, similar to the average of 9.7% across OECD countries).
  • Financial literacy is strongly correlated with mathematics and reading performance. Around 80% of the financial literacy score reflects skills that can be measured in mathematics and/or reading assessments, while 20% of the score reflects factors that are uniquely captured by the financial literacy assessment.
  • Students in the United States perform as expected in financial literacy, based on their performance in mathematics and reading.
In Ohio, financial literacy is a required component of high school curriculum, but there is no formally prescribed course of study.  According to the Ohio Department of Education’s website, schools are expected to teach as part of the Social Studies Academic Content Standards:
  • the relationship of income level to supply and demand in the market;
  • roles of people in the economy;
  • consequences of choices affecting budgets, savings, credit, philanthropy and investments; and
  • the effect of interest rates on savers and borrowers.
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  • US Kids Lagging In Understanding Money Management And Finance

    In my own case I took typing in 7th grade which meant I could type about 30 words accurately a minute or 50 or 70 words a minute with some mistakes by 7th grade. I found this really useful for typing up my term papers and I remember staying up all night when I was 15 completely a 50 page term paper for History for the "History of the Automobile" which I found really fun to research then in 1963 because I really wanted my driver's license and got my permit the day I turned 15 1/2 and my driver's license the day I turned 16 in Southern California.

    In High School I took Bookkeeping  which I found very helpful in learning about accounts receivable and accounts payable. I also started using checks to pay more things at about age 15 too and I needed a checking account in order to more easily cash my checks from wherever I worked from about 15 years old on. Most places I worked from age 10 to age 15 I got paid cash because of child labor laws except for my paper routes with the Glendale New Press and the Los Angeles Herald which I got paid by how many newspapers I delivered over the course of a month and how many customers actually paid me. Many or most of the time it just wasn't financially worth it to have a paper route as a boy because of the people that wouldn't pay you on time.

    Then in my 20s I set up bookkeeping systems first for myself to budget my money and later for my first wife and I and after that for my 2nd wife and I. By the time I married a third time though my present wife has a Master's Degree in Business Administration so I was sort of outmatched in regard to money and business (at least on a company and corporate level and a non-profit level) because of my wife's advanced degree and how much knowledge she had in regard to investments which most people just don't have this kind of knowledge at all.

    The one thing I can say is don't just use your ATM without thinking because without an account register you are going to get into trouble not keeping track of what you spend. Don't do anything you don't have to (in an emergency) on borrowed money. Don't pay interest to any bank for anything unless you have no other choice. Don't get a mortgage on your home unless you don't know how to build one yourself and buy the material as you go. (However, unless you are going to live in that house the rest of your life that sort of becomes sort of problematic too because of all the personal effort you put into building your own home.

    Buy both land and cars with cash whenever possible. Don't pay interest on anything because owing interest sort of imprisons you and keeps you from world travel or enjoying your life at all.

    These are some tips I have discovered from my own life and every life I have observed my whole life (now 66 years).