Budgeting for school lunches

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Financial illiteracy in this country is a travesty and it has to be correlated with poor economic outcomes at both the individual and macro levels.  In the absence of a real understanding of debt, savings, budgeting and how the economy works, it is inevitable that we constantly end up in debt-driven crises.

In my opinion, financial literacy should be a mandated part of high school curriculum.  So many individuals get in credit problems during college, where uninformed teenagers are preyed upon by credit card companies that know that, when they fail to pay, mommy and daddy will bail them out.

Studies back it up.  Stephen J. Dubner at the Freakonomics blog passed along this study that shows that financial literacy among young adults is woefully low:

Fewer than one-third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy.

Another study in 2008 had high school seniors scoring just above 48% on a quiz about personal finance and economics, their lowest scoring ever.  As such, even Fed Chairman Ben Bernanke has tried to push for mandated financial literacy education for students, noting that only eight U.S. states have initiated any such curriculum.

But there is hope.  A Freakonomics blog reader submitted the quiz below, which was given to a 3rd grade public school class in Fairfax County, Virginia (my school district growing up!).  I am amazed at the depth of concepts being taught at such an early age, though I wish there was more on credit – maybe next quiz.  Nonetheless, this is exactly the kind of expectations we should be setting for our children.

Click on the link to zoom in on the test.  If you rock Grace’s quiz, try the Federal Reserve’s quiz.  It’s a bit harder (I missed three).

Posted on February 7th 2010 in news

One Response to “Budgeting for school lunches”

  1. Susan Kishner Says:

    Nice site. There

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