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Why is Financial Education Vital in America? In the a 2006 Senate Resolution (109th CONGRESS 2nd Session S. RES. 410) in has been stated that:
in 2005, only 42 percent of workers or their spouses calculated the amount that they needed to save for retirement, down from 53 percent in 2000
- the 2005 Retirement Confidence Survey found that a majority of workers believe that they are behind schedule on their retirement savings and that their debt is a problem
- during the third quarter of 2005, the household debt of United States citizens reached $11,000,000,000,000
- during the third quarter of 2005, individuals serviced their debt with a record 13.75 percent of after-tax income
- nearly 1,600,000 individuals filed for bankruptcy in 2004
- approximately 75,000,000 individuals remain credit-challenged and unbanked, or are not using insured, mainstream financial institutions
- expanding access to the mainstream financial system will provide individuals with less expensive and more secure options for managing their finances and building wealth
- a greater understanding of and familiarity with financial markets and institutions will lead to increased economic activity and growth
- financial literacy empowers individuals to make wise financial decisions and reduces the confusion caused by the increasingly complex economy of the United States
- only 26 percent of individuals who were between the ages of 13 and 21 reported that their parents actively taught them how to manage money
- the majority of college seniors have 4 or more credit cards, and the average college senior carries a balance of $3,000
- 1 in every 10 college students has more than $7,000 of debt
- many college students pay more in interest on their credit cards than on their student loans
- a 2004 Survey of States by the National Council on Economic Education found that 49 States include the subject of economics in their elementary and secondary education standards, and 38 States include personal finance, up from 48 and 31 States, respectively, in 2002
- a 2004 study by the JumpStart Coalition for Personal Financial Literacy found that high school seniors scored higher than their previous class on an exam about credit cards, retirement funds, insurance, and other personal finance basics for the first time since 1997
- in spite of the improvement in test scores, 65 percent of all participating students still failed the exam
- individuals develop personal financial management skills and lifelong habits during their childhood
- personal financial education is essential to ensure that individuals are prepared to manage money, credit, and debt, and become responsible workers, heads of households, investors, entrepreneurs, business leaders, and citizens
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