Financial Literacy Test – Chinese Rout U.S. Kids

U.S. kids didn’t fare too well in a competition that is more important than the NBA Finals or the World Cup. This competition is an indicator of the future financial well being of our kids – and it shows that parents have a lot of work to do. The latest results of a worldwide financial literacy test given to 15-year-olds by the Organization for Economic Cooperation and Development show a lot of countries kicking our butts. The bright spot? We beat Colombia, that powerhouse of capitalism!

Here are some tid-bits from the WSJ article that I thought interesting:

• 20% of the kids don’t understand the difference between needs and wants.
• A financial expert suggested that we need to place more emphasis on teaching kids these values and skills at home.
• Those with bank accounts fared better.

This reinforces our philosophy here at GiveAshare.com. Parents need to be the ones that teach their kids financial literacy and that experience is the best way to teach. Help your child set up a bank account.

Why not take it a step farther and help them buy one share of stock in their favorite company. It lets them experience being a shareholder. Each mailing from THEIR company becomes a learning opportunity – dividend checks, annual reports, invites to shareholder meetings etc. They can learn skills that will last a lifetime.

You may think this is a blatant sales pitch but I truly believe it. Why? Because I experienced it! My parents helped me buy Topps Chewing Gum Inc. when I was a teenager. I fell in love with stocks and couldn’t wait to check the stock quotes after school. It changed by life. I received a B.S. in Finance from Arizona State University, spent 25 years in high tech corporate finance, and then launched GiveAshare.com in 2002 to make it easy for parents to do the same thing.

Parents and grandparents, I don’t care how you do it, but do something! Not only can it help your child’s financial future but it might help us avoid another embarrassing test like this.

See some of the financial literacy test questions.