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Only 13% of workers under 50, could answer 4 of 5 financial literacy questions correctly
Posted on 5/24/22 at 12:41 pm
Posted on 5/24/22 at 12:41 pm
quote:
A particularly worrisome finding? Only 13% of workers were able to answer at least four out of the five following financial literacy questions correctly:
True or False
1)You should pay off credit cards each month to avoid additional charges.
2)Funds are taken from a debit card transaction immediately.
3)Credit card interest is the price you pay for borrowing money.
4) A 15-year mortgages require higher monthly payments that reduces total interest paid.
5)401(k) contributions are not taxed until withdrawal.
All answers were true, 61% got question #1 correct the highest, while 41% got question 5 correct, the lowest. A year ago, in 2021, 20% of workers were able to answer four of those five questions correctly, for a one-year decline of 7%.
FYI- Financial literacy is only taught in public school in 25 states.
Posted on 5/24/22 at 12:46 pm to TigerintheNO
quote:
FYI- Financial literacy is only taught in public school in 25 states.
But at least they are learning men can have abortions too.
Tweeter
Posted on 5/24/22 at 12:50 pm to TigerintheNO
quote:
FYI- Financial literacy is only taught in public school in 25 states.
Parents job, do you really want the government teaching about financial literacy??? Have you seen what they have done since 1913?
Posted on 5/24/22 at 12:52 pm to TigerintheNO
Pay the statement balance, not the total is necessary.
Posted on 5/24/22 at 12:56 pm to TigerintheNO
quote:
2)Funds are taken from a debit card transaction immediately.
What bank do you have where this is true? My debit transactions take 2-3 days.
Posted on 5/24/22 at 1:04 pm to TigerintheNO
Based on my experiences at McDonald's I'm pleasantly surprised it's 13%.
Posted on 5/24/22 at 1:10 pm to TigerintheNO
quote:
Only 13% of workers were able to answer
quote:
Financial literacy is only taught in public school in 25 states
50% of states offer financial literacy, yet 13% were able...
Let's get the other 25 states and fix the first 25 while we are at it.
Finance math and psychology of money should be a requirement in high school.
Posted on 5/24/22 at 1:12 pm to armsdealer
quote:Folks who frequent Payday Loans almost universally come from households (i.e., parents) that do the same.
Parents job, do you really want the government teaching about financial literacy???
Posted on 5/24/22 at 1:22 pm to TigerintheNO
quote:
5)401(k) contributions are not taxed until withdrawal.
False, not all 401(k) contributions are taxed at withdrawal only traditional. Roth 401(k) is taxed at contribution.
Link to the source for this test?
This post was edited on 5/24/22 at 1:29 pm
Posted on 5/24/22 at 1:27 pm to armsdealer
Yes, I want schools to teach basic finances. It is a fundamental skill set and much more applicable for avg citizens than geometry or Algebra 2.
ETA: My 11 year old son just answered all of these correctly. I gave him 1 clue "most mortgages are 30 years." He guessed #5 was TRUE because the previous 4 were. When I asked if he knew what a 401(k) was he said "some kind of investment fund." teachable moment now he knows it's a retirement investment account where $ grows tax advantaged.
ETA: My 11 year old son just answered all of these correctly. I gave him 1 clue "most mortgages are 30 years." He guessed #5 was TRUE because the previous 4 were. When I asked if he knew what a 401(k) was he said "some kind of investment fund." teachable moment now he knows it's a retirement investment account where $ grows tax advantaged.
This post was edited on 5/24/22 at 1:45 pm
Posted on 5/24/22 at 1:43 pm to armsdealer
quote:
Have you seen what they have done since 1913?
Gotten wealthy?
Posted on 5/24/22 at 2:18 pm to TigerintheNO
quote:95% of high school graduates cant remember the right words among loose/lose, their, they're, there, etc and you think they can remember financial education? credit card companies will always find ways to rip off citizens no matter how much financial literacy you give them.
Financial literacy is only taught in public school in 25 states.
Posted on 5/24/22 at 3:04 pm to j1897
Yeah mine come out at the end of the month. That one was false. I’m fine with the 401k question as not every 401k offers a Roth option. Most do now though
Posted on 5/24/22 at 3:11 pm to TorchtheFlyingTiger
quote:
He guessed #5 was TRUE because the previous 4 were.
Funny, when I thought true for #5 I started panicking that I failed since I had all trues.
I wonder how many people changed answers due to this on its own and had the correct answer in mind.
Posted on 5/24/22 at 3:17 pm to TigerintheNO
What kind of questions are these?
quote:Not necessarily true if it’s If you’ve got some 0% APR deal, and you’ve got a year to pay it off.
You should pay off credit cards each month to avoid additional charges.
quote:Doesn’t this vary depending on the processor, whether it’s run a credit or debit, and how the bank handles transaction are transaction, such as how long it is considered pending? It can even vary on the type of transaction as gas stations often do a “test transaction,” which will eventually be removed, and the actual amount often takes time to when show up as pending.
Funds are taken from a debit card transaction immediately.
quote:Reduces the total interest paid compared to what? A 30-year mortgage? But although uncommon there are 10 year mortgages.
A 15-year mortgages require higher monthly payments that reduces total interest paid.
quote:That’s true for a pre-tax 401(k), like an IRA, but not true for a post-tax Roth 401(k), like a Roth IRA. A Roth 401(k) and a Roth IRA are still a type of 401(k) and IRA.
401(k) contributions are not taxed until withdrawal.
Posted on 5/24/22 at 4:58 pm to j1897
quote:
What bank do you have where this is true? My debit transactions take 2-3 days.
Mine bank is usuallyimmediate, but a better description for the test would be that with a debit card your account has to have sufficient funds to cover the charge because it is possible it could be debited immediately.
Posted on 5/24/22 at 6:27 pm to TigerintheNO
To play devil’s advocate, 3&4 are pretty terrible questions.
I’d have said false for #3, I’ve never paid “credit card interest” for any loan, which I would consider borrowing money.
#4 has nothing to compare to, higher payments than what?
All that said, it’s shocking how little basic financial knowledge people possess.
I’d have said false for #3, I’ve never paid “credit card interest” for any loan, which I would consider borrowing money.
#4 has nothing to compare to, higher payments than what?
All that said, it’s shocking how little basic financial knowledge people possess.
Posted on 5/24/22 at 7:41 pm to TigerintheNO
quote:
2)Funds are taken from a debit card transaction immediately.
Wouldn't know don't use debit card
Wish bank still did atm only
Posted on 5/24/22 at 7:46 pm to TigerintheNO
I understand your point that people today are less knowledgeable about basic financial matters….. but most of these questions are terribly worded and written. For example, CC interest and Loan interest are quite different. And question number two is not true at all. Very few debits are immediately debited.
This post was edited on 5/24/22 at 7:47 pm
Posted on 5/24/22 at 8:48 pm to TigerintheNO
I teach a personal finance course at the community college level in an adjunct capacity. The majority of my students every semester are non-traditional students. It’s scary how many always share at the end of the course that they wish they were taught these skills and insights while in high school.
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