Survey Reveals Definite Lack of Financial Skills
As Father’s Day approaches, many dads begin reflecting on the life skills they’re teaching their children. Nice manners, discipline and a good work ethic top many lists. Not to be overlooked, however, are financial skills, because regardless of whether they are taught formally or by example, parents pass along their financial habits to their children.
This concept is confirmed by the National Foundation for Credit Counseling’s (NFCC) 2011 Financial Literacy Survey in which the majority of respondents, 42 percent, indicated that they learned the most about personal finance from their parents. At first glance, this appears to be a good thing, as the home should be the ideal place for children to learn skills and habits.
However, the same survey also revealed that 41 percent of adults gave themselves a grade of C, D or F regarding their knowledge of personal finance. This is a disturbing decline in financial literacy, as one short year ago “only” 34 percent of Americans gave themselves a low grade. Further, five percent of U.S. adults, or about 11.5 million people, indicated that the failing grade of F best represented them, marking a sharp increase from previous years when less than three percent of adults self-identified at this level.
Taken together, these results suggest that many parents are ill-prepared to teach their children sound financial principles.
“The good news is that Americans recognize and are willing to admit their financial deficiencies,” said Duane Emmel, certified financial counselor at The Village Family Service Center, an NFCC member agency serving people throughout Minnesota and North Dakota. “Now it is up to them to do something about it, particularly if they have children who will invariably model their parent’s financial behavior.”
There are many resources available to consumers desiring to improve their level of proficiency in personal finance, including self-help books, the media, the Internet or financial professionals. Interestingly, the survey showed that while Caucasian and Hispanic adults are more likely to identify the home as the primary learning ground for personal finance, African-Americans are more than twice as likely as Caucasians to garner such information from self-help books, the media or friends.
Looking at gender, men were more than four times as likely as women to give themselves failing grades for their knowledge of personal finance, eight percent versus two percent, respectively.
“During these painful economic times, it can be argued that keen personal finance skills are more important than ever,” continued Emmel. “We encourage parents to stop the cycle of financial illiteracy by improving their own level of financial expertise, thus enhancing the likelihood that their children will some day be able to give themselves a grade of A in this important life skills category.”
If you want to improve your level of personal financial skills, contact The Village at 1-800-450-4019 or at www.HelpWithMoney.org for one-on-one, phone or online financial counseling.
