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HSFPP Weekly Update # 93—2004 Jump$tart Results
Message from Flashman: This week’s story In the New$ ... is a commentary from Janet Bodnar, writer for Kiplinger’s Personal Finance, on the financial literacy (or, more often, financial illiteracy) of today’s teenagers, along with suggestions for parents to help educate their teens on financial matters.
We still want to know how your students compare on selected questions from the survey, as it’s important for us to see if the HSFPP is making a difference in their financial knowledge. It is also important for us to know which questions students do not understand so, when revisions are made in the program materials, we can do a better job.
We really need your help with this; so far, only a few of you have responded. It might be easier for you to fax total class responses, rather than e-mailing your final tally. Our fax number is (859) 257-3212. Please direct your fax to the attention of Robert H. Flashman.
Suggested Activity for Teachers:
I’ve written a letter that you can adapt to send to parents to show how your class compares on a national study on financial literacy. If the results are positive, and I believe they will be, it will show how well your class is preparing young adults for the real world. I also suggest that you attach the questions and answers from the abbreviated Jump$tart Survey (included in Weekly Update # 92) to your letter.
Indirectly, this is a good way to educate parents, as well as teens. Surveys of adults on their levels of financial literacy show that many of them also could learn from materials presented in your class.
(Those of you who only use the updates and website, please substitute the appropriate information about the materials you do use for what I’ve said here about the workbook.)
Answers and percentage with correct answer:
1-B 67.5%; 2-A 90.2%;
3-C 62.1%; 4-A 65.8%; 5-C 70.2%;
6-D 48.4%; 7-C 51.2%; 8-A 47.1%; 9-A 55%; 10-D 48%
Letter to Parents
As you may know, financial illiteracy is a problem for those of high school age. To address this problem, we use the High School Financial Planning Program, which is sponsored by the National Endowment for Financial Education (NEFE). Each student receives a 120-page workbook, which remains an excellent resource for students even after they have graduated high school. The book covers subjects such as setting financial goals and budgeting, credit, investing, and insurance. One of the activities completed in your teenager’s class is the abbreviated Jump$tart Questionnaire, a financial literacy test that is used nationally. By showing you the materials that are used in class, we want to let you know the value of our class, Title of Class, in preparing your teenager for the real world.
Included with this letter is a commentary from Janet Bodnar, writer for Kiplinger’s Personal Finance, on the financial literacy levels of today’s teenagers based on the Jump$tart Coalition’s national study.
MONEY SMART KIDS: Kids Show Financial Literacy
April 22, 2004 by Janet Bodnar
“For the first time since 1997, high school seniors have reversed declining scores on a test of financial literacy. The survey, conducted for the Jump$tart Coalition for Personal Financial Literacy, tested how much students knew about such topics as credit cards, insurance and retirement funds. Students in the 2004 survey answered 52.3% of the questions correctly, up from 50.2% in 2002 and 51.9% in 2000.
“That's good news. But I'd like to focus on an interesting finding of the study. It seems that students who said they receive a regular allowance did slightly worse, scoring 50% on the test. If an allowance doesn't improve a child's financial literacy—at least as measured by this exam—should parents bother to give one?
“Yes, yes, a thousand times yes. The Jump$tart study also showed that young people who are thrifty didn't score better on the exam, yet we consider thrift a virtue. So, too, is knowing how to manage an allowance—which I define as a fixed amount of money that kids receive at regular intervals, along with specific financial responsibilities.
“There are limits to what an allowance can do. It will not teach kids that they could lose health insurance if their parents become unemployed (a question that fewer than one-third of the students answered correctly). It will not teach kids that stocks are likely to have a higher average return than savings accounts over an 18-year period (a fact that less than 20% of students knew).
“Children will only learn that kind of information if adults go the extra mile to discuss it. Yet it's precisely those ‘advanced’ financial topics that parents are reluctant to tackle. A survey by Northwestern Mutual showed that only 39% of parents discuss responsible use of credit cards with their kids, and just 23% have broached the subject of investing.
“That's where schools come in. Parents can certainly do better, and in this column I offer painless and practical advice. But classrooms are the perfect venue for teaching big-picture lessons about the stock market or social security, while parents focus on day-to-day money management skills.
“To be successful, however, an allowance has to be easy to administer, and both you and your children have to be clear on how it will work. Next week, I'll tell you how to set up a foolproof system.”
Kentucky High School Financial Planning Program
The purpose of this Web site is to assist county extension agents, credit union educators, and high school teachers in improving the economic well-being of our constituency, beginning with todays students; and also, to assist teachers in Kentucky in meeting KERAs goal that all students become technologically literate. Weekly Updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators.