As of 2020, the average score of 15 - 18-year olds who took the test stood at 68%, just shy of a passing score. In fact, of the 60,813 people who have taken the test since it began in 2015, only 59% received a passing score of 70% or higher. Additionally, the National Financial Educators Council also released results which found that poor financial literacy contributed to Americans losing an average of $1,634 each in 2020. That is a cost of about $415 billion to the country at large.
Those numbers may seem a tad apocalyptic, but there is a silver lining. Younger generations of Americans appear willing and able to learn more about financial literacy. The National Financial Educators Council asked 1.101 young adults age 18 to 24 what high school level course would have benefited their lives the most. The majority responded with "money management."
It appears financial literacy classes really do help. The FINRA Investor Education Foundation's State Financial Education Mandates study found that Georgia, Idaho and Texas all saw increased credit scores and lower delinquency rates on credit cards three years after implementing a financial education mandate in public schools. Additionally, all three states saw significant improvements in participants' scores on the National Financial Literacy Test with an overall 8% rise in score among 15 - 18-year olds.
How to improve your financial literacy
April is Financial Literacy Month. Both a celebration and a challenge, this month is a chance for members to reflect on the state of their personal finances and an opportunity to improve financial well-being, one step at a time. Here are some suggestions from Athene on how to improve financial literacy:
- Subscribe to financial newsletters: Financial newsletters from trusted sources can put free financial news in your inbox. To start, try Athene's Smart Strategies, designed to help you take your financial journey to the next level with expert advice on finances and lifestyle.
- Listen to financial podcasts: Podcasts can help you brush up on financial information while you are on the go. For ideas, check out U.S. News and World Report's Best Personal Financial Podcasts to Listen To.
- Read personal finance books
- Start keep a budget: All the general financial know-how in the world will not mean much if you do not know where your money is going each month. Start tracking your spending and set up a budget using a simple spreadsheet or applications.
- Talk to a financial professional: Sometimes you just need to ask an expert. Financial professionals, like those at your local credit union, can help you assess your current situation and help you stay on a track that works best for you.
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