7 Facts College Students Don’t Know About Money Management
According to a 2013 report from the Financial Industry Regulatory Authority’s Investor Education Foundation, 19 percent of Americans are spending more money than they make. Of the 25,000 people surveyed over a four-month period, just 41 percent said they spend less than their income and the remaining 40 percent spend every thing they make, or close to it. This means that more than half of Americans are either financially stagnant or are trapped in a worsening situation.
The results of the survey clearly reveal that most Americans are in a tight financial spot, if not in dire financial straits. To some degree this is the product of the late-2000s financial crisis, which destroyed millions of jobs and pulled the country’s gross domestic product down to 10 percent below its potential, according to the Congressional Budget Office. Long-term unemployment remains an outsized problem and economic confidence is still in shambles — in January, a survey conducted by Gallup found that more Americans believe they are worse off financially now than a year ago.
But the economy is not the only thing to blame, according to FINRA Foundation Chairman Richard Ketchum. Referring to the first survey, Ketchum said: “This survey reveals that many Americans continue to struggle to make ends meet, plan ahead, and make sound financial decisions — and that financial literacy levels remain low, especially among our youngest workers. No matter how you slice and dice it, this rich, new dataset underscores the need for us to continue to explore innovative ways to build financial capability among consumers.”
A test administered every other year by Jump$tart supports this claim. Many Americans, particularly young Americans, are clueless about the basics of finance, business, and economics. We’ll go over seven questions from Jump$tart’s 2008 college-level survey of financial literacy that many or most college students got wrong.