U.S. Teens Don’t Know Jack About Finances

Photo (cc) by 401(K) 2013

When it comes to money, American teens have a lot to learn.

That was a finding of a recent financial literacy test administered by the Paris-based Organisation for Economic Cooperation and Development. It was the first test of its kind, assessing teens’ knowledge of personal finances – including banking, taxes and how interest rates work – and their ability to apply those skills to financial problems.

Of the 18 countries tested, the U.S. ranked ninth, sandwiched between Latvia and the Russian Federation. Chinese students in Shanghai (the only Chinese city tested) earned top scores. Belgium, Estonia, Australia and New Zealand also ranked near the top. Colombia, Italy and the Slovak Republic rounded out the bottom three performers.

In a press release, the OECD said the overall results of the 29,000 15-year-old students it tested were less than impressive.

“Around 1 in 7 students … are unable to make even simple decisions about everyday spending, and only 1 in 10 can solve complex financial tasks,” OECD said.

One seemingly simple question from the test required that teens know how to read a pay slip and understand the difference between gross and net pay.

According to CNN Money:

Nearly 20 percent of U.S. students didn’t even reach the baseline level of proficiency, “or the basic skills that are needed for success later in life,” according to Michael Davidson, head of early childhood education at the OECD.

The Associated Press said just 19 states in the U.S. require a personal finance course in high school.

The OECD defined financial literacy as an essential life skill for teens. The test results indicate that the U.S. has a lot of work to do when it comes to educating its kids on financial matters. CNN Money said:

“If we want to have young people who are globally competitive in 20 years, having a good solid basis of understanding their financial lives early is important,” said Ted Beck, president of the nonprofit National Endowment for Financial Education. “This should be a national priority.”

How well would you score on the test? Find out here.

When I was a senior in high school, I had a free period open, so my mom encouraged me to take our school’s “Prep for Life” class. Financial literacy was one of the focuses of the class. We learned how to write a check, balance a checking account and make a monthly budget (for rent, food, entertainment, gas, utilities, etc.). That was it, but I guess it’s more than some students get.

Were you surprised to see where American teens rank when it comes to financial matters? Share your thoughts below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

11 ‘Disposable’ Items You Should Be Reusing
How to Avoid Being Surprised by 7 Nasty Expenses
How to Avoid Being Surprised by 7 Nasty Expenses

Major expenses are difficult to predict, but there are ways to make sure you’re protected.

Eat This Food If You Want to Avoid Alzheimer’s Disease
Eat This Food If You Want to Avoid Alzheimer’s Disease

One type of food associated with the Mediterranean diet offers especially large benefits.

16 Products That Solve Everyday Annoyances
16 Products That Solve Everyday Annoyances

These items put an end to the daily irritations that bug you the most.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.