While there’s been a slight uptick in financial literacy among young people, Americans’ overall financial knowledge and understanding is still shy of what they need to get through life, according to the National Financial Educators Council.
The financial education provider has published the annual results of its National Financial Literacy Test, which reveal persistent inadequacy in financial understanding among Americans.
Across just over 93,000 participants, the average score was 67.34 percent, falling just short of the 70 percent mark required to pass. Despite the overall shortfall, 57.35 percent of participants managed to achieve a passing score.
Aimed primarily at youths between 15 and 18 years old, the 30-question test, which touches on 10 critical areas of money management, aims to shed light on financial literacy levels across various age groups.
The 15-to-18-year old cohort, which accounted for more than half of the test takers, posted an average score of 64.04 percent. While the latest financial literacy test results are slightly up compared to last year, that still means less than half of that younger age group passed.
“These results show a small improvement in average scores for American youth. But the increases are very small,” said Vince Shorb, CEO of NFEC. “We can't relax our efforts to offer high-quality financial education that prepares upcoming generations to tackle the money challenges they'll face as adults.”
The test, which is offered at no cost to individuals of all ages, evaluates people’s financial knowledge, motivation to learn, and their recognition of the necessary first step to take positive financial action, in line with the council's comprehensive educational framework.
Perhaps not so surprisingly, the age-specific findings showed financial literacy increasing with age. Participants aged 10 to 14 years scored an average of 56.63 percent, reflecting the challenges younger individuals face in grasping basic financial concepts.
Those in the 25-to-35, 36-to-50, and 51-and-older age brackets scored progressively higher – with averages of 75.99 percent, 77.07 percent, and 77.81 percent, respectively – indicating a greater understanding and possibly experience with financial matters among older Americans.
The NFEC also shared results from other assessments including the Financial Foundation Test, an eight-question quiz to gauge people’s financial decision-making ability, which saw an overall average score of 70.96 percent from some 34,000 participants.
For its Advanced Financial Education test, which focuses on money management capacity at an advanced level, the institute reported an average score of 58.13 percent, with a disappointing pass rate of 41.7 percent.
The council’s Student Loan test, focused on college students and high school students with plans for college, had a dismal 39 percent passing rate, raising questions about the students' readiness to make decisions on student loan debt.
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