Earlier this week, the Center for Economic and Entrepreneurial Literacy (CEEL) released the results of a national survey about how much people know about personal finance and economic issues.
Someone’s not doing their homework…..
The survey showed that an overwhelming number of Americans can’t answer even the most basic questions about borrowing and interest rates. Here are the highlights:
69% of respondents do NOT know that you have to pay both the interest on your entire balance as well as a late fee when making a late credit card payment
97% of respondents CANNOT identify the percentage that service fees typically take out of a $20 ATM withdrawal.
Over 90% of respondents either didn’t know how much the fee would be or thought it was less than it really is.
Nearly 70% of respondents did NOT identify “FICO score” as the most important factor in obtaining a home loan, when asked to choose from a list of four factors.
Only 16% of respondents knew that you can withdraw money from a Roth IRA for education expenses, your first home purchase, and retirement spending.
I’ll never understand why we spend so much time teaching some relatively arcane points about American History, that people will think about maybe once a year, but we provide basically no personal finance education, other than teaching grade school kids how to make change.
Isn’t it time we started teaching basic personal finance in school?
Published: May 23, 2008