US financial literacy is no “wicked Pissa”

Ever hear of PISA? No, I’m not referring to the term commonly used in New England. PISA is the Programme For International Student Assessment, and earlier this year they released a study on student financial literacy, focusing on 15 year-olds. The findings should be rather alarming to all of us, that have any influence the retail banking industry.

Let me get to the bottom line. The study found that 15 year olds in Shanghai, China are more financially literate than American counterparts. In fact, Australia, Belgium. Czech Republic, Estonia, New Zealand and Poland, scored better than the US.  Seriously? Yes, America ranks below the world average in financial literacy. American kids are failing to recognize the difference between needs and wants, make simple financial decisions on daily spending and they struggle to recognize the purpose of everyday financial documents such as invoices.

The findings of the study are rather interesting, and I took note of one that specifically stood out. Students with a bank account scored 37 points higher, on average. I’d really like you to read the full study, so here is the link: http://www.oecd.org/pisa/

We’re letting our kids down by not providing them with basic financial skills. This lack of skills translates to poor financial decisions that can follow them throughout their lives. Take the current situation with college student loans. Do kids know that a student loan is actually a loan on their future income? Borrowing for a college education is a necessity for many, because they are “too poor for college, yet too rich for financial aid.” However, are we making it clear what it takes to repay these loans? This debt can haunt today’s students and have profound impact on our economy, not to mention your livelihood.

Yes, lack of financial literacy is a problem that has dire consequences on our nation. It’s a problem that we have long ignored, talked too much about, yet we have done too little to address. The home may be the place to start, but the average American household may not be a stellar example of financial fortitude. I’m a big fan of financial education in the educational system, starting in elementary school and progressing through college. It’s a topic that should be a requirement, not an elective.

But what about you, Mr/Mrs/Ms Financial Advocate? Are you doing enough? There is a need and a void, that retail financial institutions can and should fill. This is an opportunity for us all, to do the right thing.

Bryan Clagett

Bryan Clagett

Bryan is on the executive team and singularly focused on driving revenue growth through a variety of new initiatives that help financial services and fintech become ever more relevant to ... Web: https://www.strategycorps.com Details