The impact of financial literacy is huge. But unfortunately, it's not being noticed in school systems around the world.
- The National Financial Educators Council asked 1,101 young adults aged 18-24 “What high school-level course would benefit your life the most?”
- The majority (51.4%) responded “money management” as the high school-level course they thought would be most beneficial to their personal lives. 99% confidence interval and a less than 4% margin of error.
- Three years after implementing a financial education mandate in Georgia, Idaho and Texas, all three states examined saw increased credit scores and lower delinquency rates on credit accounts. FINRA Investor Education Foundation State Financial Education Mandates.
- The Federal Deposit Insurance Corporation longitudinal evaluation results indicated that participants who completed the published the results of a program on checking, savings, budgeting, and credit showed statistically significant improvements in their financial behaviors and confidence, improvements which persisted 12 months later.Federal Deposit Insurance Corporation. Longitudinal Evaluation of the Intermediate-term Impact of the Money Smart Financial Education Curriculum Upon Consumers’ Behavior and Confidence as reported in the National Financial Capability Strategy.
- Three years after implementing a financial education mandate credit scores of participants improved by 11 points in Georgia, 16 points in Idaho and 32 points in Texas.FINRA Investor Education Foundation State Financial Education Mandates
- A financial literacy test conducted in 2010 regarding a specific retirement contribution plan found that respondents were largely unable to differentiate between investment options, but that making personal contributions was associated with greater knowledge. Dvorak T, Hanley H. Financial Literacy and the Design of Retirement Plans as reported in the National Financial Capability Strategy.
- Three years after the states implemented their financial education mandate in Georgia, Idaho and Texas, 90-day delinquency rates on credit accounts decreased in all three states. FINRA Investor Education Foundation State Financial Education Mandates
- Financial decision-making can be influenced positively by presenting high-quality, non-complex information; providing incentives for good decisions; and facilitating the best use of available information in real-life situations. Altman M. Implications of Behavioural Economics for Financial Literacy and Public Policy as reported in the National Financial Capability Strategy.
- According to the State Financial Education Mandates study, it takes time for state financial education mandates to have an effect. While very few positive effects were measured one year after implementation, by the second year after implementation, there were consistently positive results for the students. The authors contend that this lag could be due to both students and teachers adjusting to changes in the course curriculum. FINRA Investor Education Foundation State Financial Education Mandates
Impact of Financial Illiteracy
- More than half of millennials (about 54 percent) say debt is their “biggest financial concern.” Wells Fargo Study
- 39% of millennials worry about their financial future “at least once a week.” Fidelity study
- There’s a $6.6 trillion gap between the pensions and retirement savings of U.S. households and what they should have to maintain their living standards in retirement – and the gap is growing. Retirement Income Deficit report by Retirement USA
- 41% of baby boomers expect their standard of living to decrease in retirement. Transamerica Center for Retirement Studies.
- Only 14% of baby boomers have a written retirement strategy. Transamerica Center for Retirement Studies.
- HR professionals indicated financial worries continue to contribute to employee stress on the job. MetLife
- 83% said that personal financial challenges had a large impact or some impact on overall employee performance. Society for Human Resource Management
- 46% of Americans have less than $10,000 saved for retirement. Employment Benefit Research Institute
- As reported in September 2013, the three-year cohort default rate rose from 13.4% for FY 2009 to 14.7% for FY 2010. US Department of Education
Note: All above statistics were taken directly from the NFEC website.