The first-of-its-kind international financial literacy assessment issued today finds American teenagers struggle to demonstrate competitive financial knowledge on the world stage. Among 18 participating countries and economies in the Program for International Student Assessment, the United States ranks between 8th and 12th place in 15-year-olds' aptitude in planning and managing finances, dealing with bank accounts and monetary transactions, understanding taxes and savings, managing risks and rewards, and comprehension of consumer rights and responsibilities in financial contracts.
"I cannot say I am surprised to see that the U.S. ranks in the middle of the pack internationally in terms of youth financial capability. This is a clear indication that the subject needs to be taken seriously," says Ted Beck, president and CEO of the National Endowment for Financial Education (NEFE). "But let's keep in mind this PISA assessment offers an initial measurement, and one of the positive things here is that as a country we are taking a higher interest in the financial well-being of our children."
PISA finds more than one in six students in the U.S. does not reach the baseline level of proficiency in financial literacy. According to the report, these students, at best, can recognize the difference between needs and wants, can make simple decisions on everyday spending, and can recognize the purpose of everyday financial documents such as an invoice. Only about one in 10 students in the U.S. ranked as a top performer, who the report says, are students who can look ahead to solve financial problems or make the kinds of financial decisions that will be relevant to them in the future.
PISA, part of the Organization for Economic Co-operation and Development (OECD) was conducted in 2012 among more than 29,000 students in the participating countries. In the U.S. more than 1,100 students in 158 schools completed the paper-based test, which also measured proficiency in mathematics and reading.
Helpful Resources: The Cornerstone Credit Union Foundation’s free FOCUS “Train-the-Trainer” workshop, designed to arm credit unions, educators, non-profit organizations and community leaders with the skills they need to motivate young people into adopting positive savings and spending habits.
The FOCUS “Train-the-Trainer” workshop covers BizKid$ and the National Endowment for Financial Education High School Financial Planning Program (NEFE HSFPP). BizKid$ is a financial literacy initiative that includes an award winning TV series, free classroom curriculum, outreach activities, a website and a monthly online newsletter targeting children 9-16 years old.