Toronto, ON, July 6, 2009 – According to a new study from the Investor Education Fund, a significant portion of Ontario high school students aged 14 — 18 don’t have the financial know-how to make informed choices.
“The survey results are a concern,” says Tom Hamza, president of the Investor Education Fund. “Without the skills to manage their money, students run the risk of developing poor spending and financial habits that will affect their ability to meet future financial needs.”
Of those surveyed, less than half know how to create a budget (43%) and less than a third (28%) believe they make good spending decisions. While most students believe they have moderate financial literacy, they feel their level of knowledge of specific financial topics like saving and managing debt, the time value of money and building a financial plan is low. While 64% say it’s important to understand money management only 38% feel prepared to manage their money after graduation.
The survey, was commissioned to better understand the level of financial skill of high school students and to seek out their opinions of financial education. Results of the survey will be used to develop tools to meet teen’s financial education needs.
The survey showed that the majority (90%) of Ontario students report turning to their parents for financial information. In addition, many students believe it is important that schools provide them with information on managing money and personal finance yet, just 18% think their school is doing well in this area.
According to Hamza, “Society has changed and people have new and more complicated financial burdens,” he says. “Schools need to keep up with this change, so that students graduate with sufficient skills and knowledge to help them navigate a lifetime of financial choices.”
Part of the Investor Education Fund’s long-term efforts to educate teens and ‘tweens is reaching them on their home turf – whether that’s creating online interactive tools (including a cartoon feature showcasing the perils of credit card interest), or working with schools and teachers to deliver training and instruction on what they need to know to avoid facing a financial crisis in their 20s.
The study also showed that almost a third (30%) of students expressed their biggest financial concern as paying for tuition and related expenses, yet more than half state the primary reasons to save are clothing (66%) and entertainment (55%).
Hamza says financial education is about sticking to the basics. “The issue isn’t complicated nor does it demand that we create a nation of Warren Buffets. It is about establishing the framework that people need for a lifetime of decision making,” he says. “You don’t need to turn the education system upside down, but you do need to do more to ensure positive financial outcomes as high school students move toward post-secondary education or their careers. We are confident that this research will help the education system adapt to the changing financial realities of young people.”
Download the full report: Youth Financial Literacy Landscape
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