Thursday, July 10, 2014

Financial Literacy a Huge Issue ... And a Genuinely Un-American and Really Raw Deal for Our Kids and Grandkids

We the People need to wake up and face facts. The really important ones.

In that regard, please take the test below and see how well you score compared to teenagers in America and the rest of the world. Let's hope you do better -- much better.

Then ask yourself how we will ever solve our huge and growing American problem with personal and government related debt, student loans, employment, health care costs, global competitiveness, retirement savings and 401(k) investments.

Meanwhile, the indebtedness piles up and the economy stays weak, as the role of America in world affairs assumes bystander status, thus making us less prosperous, safe and secure as a society.

Could it be that an ongoing lesson (or ten or even one hundred?) in financial literacy is in order, if only to demonstrate to ourselves that we are bequeathing to our kids and grandkids a really raw deal by the way we're mishandling this entire rotten to the core situation, including Social Security promises, guaranteed pension promises to teachers and other public sector employees, Medicare promises, ObamaCare promises, student loans for all, public education costs and results, the bloated post office and other related financial issues?

In other words, where do we expect the money to come from to pay for all this stuff that we won't pay for or stop promising to give ourselves, if not from our kids and grandkids? Talk about a raw deal! And one on which they don't even get to vote!!

American teens can't read a pay slip is subtitled 'PISA test finds only 9.4% perform at top level in financial literacy:'

"Fewer than 30% of U.S. teens understand their paycheck, according to the financial literacy portion of a test administered by the Organization for Economic Co-operation and Development.

More than one in six 15-year-olds is unable to make even simple decisions about everyday spending, and only one in 10 can solve complex financial tasks, according to the test.

Among the seemingly simple questions that American teens struggled with was determining how much money was going into a bank account from a theoretical month’s pay.

The pay slip for the month of July listed four numbers: Gross pay, deductions, net salary and gross salary year to date.

Only 28.8% could correctly say how much money was automatically deposited into the worker’s bank account. By comparison, 74.8% of students in Shanghai got the right answer. Americans also performed below the OECD average.

Overall, only 9.4% of American 15-year-olds were among the best performers in the financial-literacy test, as opposed to 43% of the Shanghai students.

The lackluster U.S. showing has been consistent with previous reading and math studies conducted by the Program for International Student Assessment, or PISA. Math and reading skills are closely related to financial literacy.

On the bright side, American teens did do better than those in Colombia, Italy and France, among others.

How well would you score? Take the 5-question test here

Summing Up

Our societal lack of paying attention to financial literacy negatively impacts all Americans.

That's a big reason we're in the sorry shape we're in today.

And it's getting "sorrier" each day.

Let's wake up.

That's my take.

Thanks. Bob.

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