MAKING THE CASE FOR FINANCIAL LITERACY
A collection of current statistics regarding youth and money
American Teenagers:
 As a cohort spent over $172 billion in 2001, equal to Mexico’s yearly exports. (1)
 Average expenditures: $104/ week; $5,408/year (1)
 Teens surveyed by Teenage Research Unlimited reported spending 98% of their money, rather than saving it. (1)
 Children’s spending has roughly doubled every ten years for the past three decades, and tripled in the 1990s. (23)
 More than 1 in 5 youths ages 12 to 19 have their own credit cards or have access to parents’ credit cards, and 14%
have debit cards. (1)
 40% of students are likely to buy a pair of jeans (or something similar) they really want even if they do not have the
money to pay for it. 22% percent would pay for it with a credit card. (2)
 One in three carry credit cards, even more have an ATM card(4)
 High School graduates stand to earn over $1 million in adulthood-without adjusting for inflation (5)
 Nearly half of all high school students nationwide have a part time job (16)
 Of the 4,000 students who took the Jump$tart personal finance survey in 2002, 68.1% received failing scores. (21)
 50% of high school graduates do not go to college and enter the workplace directly. (20)
 By 2004, people from 16 to 22 will comprise the majority of online shoppers despite the fact that they are illprepared to manage their money.
American Families:
 Outstanding non-secured consumer debt rose from $805 billion in 1990 to $1.65 trillion in 2001. (13)
 40% of Americans say they live beyond their means. (20)
 The personal savings rate as a percentage of GDP decreased from 7.5% in the early 80’s to 2.4% in 2002 During
World War II, Americans were saving more than 24%. (12)
 The U.S. has the lowest personal savings rate of any major industrialized nation. (35)
 The percentage of income used for household debt (payments, including mortgages, credit cards, and student loans)
rose to the highest level in more than a decade in 2001 and remained at 14% in 2002. (13)
 Approximately 10,000,000 Americans, the ‘unbanked,’ are not using mainstream, insured financial institutions. (36)
 Nearly 5% of consumers are late with their credit card payments. (14)
 48% of credit card owners only pay their minimum monthly payment each month. (30)
 Credit card spending jumped 8.1% in the 1st half of 2002.
 Average U.S. credit card debt per household is on the rise: from $2,985 in 1990 to $8,562 in 2002, with an
average interest rate of 14.71%. (15), (27)
 More than half of American families are not saving enough to preserve their standard of living in retirement.
 Between 1983 and 1998, 2/3rds of the defined benefit or traditional pension plans in the US were terminated. (17)
 Half of all Americans are living paycheck to paycheck. (19)
 Christmas 2001 was the highest level of consumer debt in US history. (19)
 Median pre-tax household income fell by more than $900 from $43,162 in 2000 to $42,228 in 2001. Income
dropped everywhere but the top. (19)
 More than half of American workers between the ages of 45 and 54 did not have any kind of retirement account in
1998. Data compiled in 2000 showed half of those in the 55 to 64 age range had balances of less than $33,000. (22)
 66% of Americans don’t pay off their entire credit card bill each month. (25)
 69% of Americans plan to work in their retirement years. (28)
 Life expectancy in the US recently reached a record high, with an average lifespan of 74.1 years for men and 79.5
years for women. (32)
 One in four women currently retires on an income below the poverty level. (33)
 Over the next 40 years, the number of women over 85 is expected to at least triple, with 3/4ths of this population
single, divorced, or widowed. (33)
 There are nearly 7,000 mutual funds to choose from. (29)
 The net worth of the average middle-class American household after accounting for debt is less than $10,000. (31)
 50.8% of college-age adults agree with this statement: “I have experienced repeated, unsuccessful attempts to
control, cut back or stop excessive money use.” (34)
 64.8% of college-age adults agree with this statement: I experience a mood change (high or low) just before or after
a shopping event. (34)
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College Students:
 Persons entering college are offered an average of 8 credit cards the first week of school.
 55% of college students acquire their first credit card during their first year of college, and 83% of college students
have at least one credit card. (11)
 45% of college students are in credit card debt, the average credit card debt being $3,066. (11)
 Undergraduates students carry an average of three credit cards (6).
 Graduating students have an average of $20,402 in combined education loan and credit card balances. (6)
 20% of graduating college students have $10,000 or more in non-school related credit card debt. (26)
 An increased number of college student borrowers feel more burdened by their education debt, with about 25% of
the borrowers perceiving themselves as having significant problems (6)
 Students who came from low-income families (defined as Pell Grant recipients) report feeling more burdened by
their debt than non-Pell recipients, when controlling for all other factors. This is a change from previous studies
when there was no significant difference in attitudes between low-income and non-Pell recipients. (6)
 28% of students with a credit card roll over debt each month (7)
 University administrators state that they lose more students to credit card debt than to academic failure (8)
 In 2001, the credit industry issued more than 5 billion solicitations to consumers, including college students. (18)
 Only 59% of college graduates agree that the benefits of incurring student loans are worth it overall. (6)
 Students double their average credit card debt-and triple the number of credit cards in their wallets-from the time
they arrive on campus until graduation. (6)
 College students borrowed in the 90s what they borrowed in the 60s, 70s and 80s combined.
 Credit card companies usually offer credit limits to college students between $500 and $3000, with higher interest
rates than nonstudents, between 18% and 20%. (25)
Bankruptcies, Defaults and Forclosures:
 The US has recently seen an over 50% increase in bankruptcies among people under age 25 (fastest growing age
range for bankruptcies). Bankruptcy filings for this age group were at an all time high in 2000, numbering almost
150,000, which is a tenfold increase in just five years. (4)
 Non-business bankruptcy filings increased again in 2002 totaling 1,539,111. (9)
 Non-business bankruptcy filings accounted for the overwhelming majority (97.6%) of all bankruptcy cases filed in
calendar year 2002. (9)
 Home forclosures in 2002 reached the highest rate in 30 years. (11)
 Mortgage delinquencies have surged to their highest level since 1992.
 More young adults filed for bankruptcy than graduated from college in 2001. (35)
Financial Literacy Education
 Only 21% of students between the ages of 16 and 22 say they have taken a personal finance course through school.
(2)
 Only 26% of 13 to 21 year olds reported their parents actively taught them how to manage money. (2)
 Only 7% of parents say their child understands financial matters well (2)
 94% of students ages 16-22 say they are likely to turn to their parents as a financial information source (2)
 30% of youth report that their parents rarely or never discuss saving and investing with them. 47% say their parents
rarely or never discuss household budgeting with them (2).
 61% of parents say that parents and schools should share the responsibility for teaching children about financial
education (2).
 Research has shown that as little as 10 hours of personal financial education positively affects students spending and
savings habits. (10)
 A Consumer Reports survey of 12-year-olds found that 28% didn’t know that credit cards are a form of borrowing,
40% didn’t know that banks charge interest on loans, 34% didn’t know that you can’t tell how good a product is by
how much it’s advertised. (24)
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SOURCES:
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)
26)
27)
28)
29)
30)
31)
32)
33)
34)
35)
36)
Teenage Research Unlimited, 2001.
Youth and Money Survey, ASEC,1999 and/or 2001.
National Longitudinal Survey of Youth
Louisiana State University Agricultural Center
NEFE, 2001
Nellie Mae, 2002
Nellie Mae, 2000
Utah Mentor, 2003: The Voice Digital News, 2003
American Bankruptcy Institute, 2003
NEFE, 1998
Senate Resolution 48, 2003.
Bureau of Economic Analysis (NIPA), 2003.
Federal Reserve, 2003.
The Nilson Report
CardWeb.com
Financial Literacy 2010
EBRI, 2002.
Consumer Federation of America
John Bryant, Silver Rights Movement.
Fort Worth Business Press 2002.
Jump$tart Coalition, 2002.
Lakeland Ledger, 2002.
Northern Virginia Parent, 2003.
Consumer Reports
Centre Daily Times, 2002.
Milwaukee Journal Sentinel, 2003.
NFCC 2002.
AARP 2002.
Moneycentral.com, 2002.
VISA 2000.
Consumercredit.com, 2002.
US Dep’t. of Health and Human Services, 2002.
Investing for Women, 2002.
MyVesta 2002,
ABA Education Foundation
Bureau of National Affairs
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MAKING THE CASE FOR FINANCIAL LITERACY— 2004
A collection of current personal finance statistics
Financial Literacy Education
Adults & Parents:
1. Nearly two-thirds of American adults and students didn't know that in times of inflation money loses its value. (2)
2. Half of the adults and almost two-thirds of the students didn't know that the stock market provides a value for
ordinary people to buy stock. (2)
3. One quarter of American adults confused "budget deficit" with "national debt". (2)
4. Only a quarter of Americans feel very well informed about managing household finances. (4)
5. Among parents with children five or older, only 26% feel well prepared to teach their kids about basic personal
finances. (4)
6. 80% of parents believed that schools provided classes on money management and budgeting. (8)
7. The Financial Educational Survey done by Capital One found that: (9)
 More than 70 percent of parents say they have spoken with their teens about credit and using credit cards
wisely, while less than 44 percent of the teenaged children of those respondents say their parents have talked to
them about credit cards.
 54 percent of parents rate their teenager's knowledge about managing money as "good" or "excellent," while an
overwhelming 78 percent of the teenaged children of those respondents rated their knowledge as merely
average or even poor.
8. A research commissioned by Northwestern Mutual reveals the following: (11)
 43% of parents believe that schools should be doing more to teach kids about money.
 Almost half of all parents say they don’t set a good example when it comes to handling their own money and
are not capable of properly teaching their children.
 70% of parents say that most kids in the US today feel a sense of entitlement- that they just expect to have
whatever it is they want whenever they want it.
 57% of parents say most kids do not understand the value of money.
 41% of parents say adults never learned how to manage money properly.
 22% of parents think most parents are incompetent or inadequate when it comes to teaching their kids about
money.
Students:
1. The third annual back-to-school survey from Capital One found that: (10)
 87 percent of college students and 90 percent of high school students rely on their parents for financial
guidance.
 98 percent of college students and 90 percent of high school students say they have learned about money
management through their own experiences with money. Additionally, 53 percent of collegians and 43 percent
of high school students claim to have learned something about money management through talking with friends.
 70 percent of college students surveyed say their parents have not given them tips or advice about spending
wisely while shopping for school supplies.
 Capital One's survey found more than 70 percent of middle school and high school students say they perform
odd jobs to earn extra money. Additionally 72 percent of college students have a regular full or part-time job.
2. 64% of consumers ages 18 to 24 don't even know the interest rates they pay on their credit cards. (13)
3. In the Jump$tart Coalition survey, 25.7% of the students without any bank account scored lower (46.1%) than those
who have a savings account (51.7%), a checking account (50.5%), and both savings and checking accounts (50.2%).
(28)
4. In the Jump$tart Coalition survey, only 26% of 13- to 21- year-olds reported that their parents actively taught them
how to manage money. (28)
Other:
1. 98% of banks responding to this year’s Consumer Bankers Association’s survey said they sponsor financial literacy
programs and/or support such efforts through partnerships. (14)
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2.
3.
4.
The number of states with personal finance standards or guidelines drops from 40 states to 31 states from 2000 to
2002. (3)
Only 4 states require students to complete a course that includes personal finance before graduating from high
school in 2002. (3)
In 2002, just 17 states that have personal finance standards require schools to implement these standards. (3)
American Kids & Teenagers
1.
2.
3.
4.
5.
6.
7.
8.
9.
American children, teens and young adults earned about $211 billion in 2003, down from $231 billion in 2002. (22)
In 2003, Teens spent $175 billion, averaging $103 per week. (6)
In 2003, 8-to-14-years-olds, so-called “tweens”, spent $39 billion a year. (23)
The average adolescent spends about $264 a month. (24)
11 % of teens 12-19 have their own credit card, an additional 10% have access to a parent's credit card. (5)
16% of teens 12-19 have their own ATM cards, and 21 % have their own checking accounts. (5)
Over one-third of the 2002 students surveyed have an ATM card. (28)
Nearly 75% of students surveyed have a saving and/or checking account with a bank. (28)
Children’s spending has roughly doubled every 10 years for the past three decades and tripled in the 1990s. Kids
ages 4-12 spent 2.2 billion in 1968 and 4.2 billion in 1984. By 1994 the figure increased to 17.1 billion, and by 2002
their spending exceeded $40 billion. Kids’ direct buying power is expected to exceed 51.8 billion by 2006. (25)
Undergraduate & Graduate Students
1.
2.
A 2001 Credit Card Usage Analysis by Nellie Mae includes the following: (15)
 83% of undergraduate students have at least one credit card; a 24% increase since 1998.
 Average credit card balance is $2,327; a 15% decrease from the 2000 average.
 Median credit card balance is $1,770; a 43% increase above the median in 2000.
 21% of undergraduates who have cards, have high-level balances between $3,000 and $7,000; a 61% increase
over the 2000 population.
 Graduating students have an average of $20,402 in combined education loan and credit card balances.
 Students residing in the Northeast use credit cards the least, while Midwesterners carry the highest average
credit card balances.
 Students double their average credit card debt - and triple the number of credit cards in their wallets - from the
time they arrive on campus until graduation.
 Although freshmen have the lowest rate of card possession among undergraduates, 54% carry a credit card. The
percentage of students with at least one card increases to 92% in sophomore year.
 Only 23% of freshmen, on the other hand, have a student loan.
 Average number of credit cards per college student is 4.25. Forty-seven percent of students with credit cards
have at least four cards, up from 32% in 2000 and 27% in 1998.
 6% of college students have more than $7,000 in credit card debt.
Results of the 2002 National Student Loan survey by Nellie Mae include the following: (16)
 Over 70% of students who borrow to pay for their higher education agree that student loans were very or
extremely important in allowing them access to education after high school.
 58% of students said student loans were very or extremely important in allowing them to attend the college of
their choice; and, of the students who attended graduate school, 72% said student loans were very or extremely
important in allowing them to pursue graduate studies.
 The average undergraduate debt is $18,900 in 2002, up 66% from $11,400 since 1997.
 Those who attended private four-year colleges borrowed most (average $21,200/median $18,400), followed by
those who attended public four-year colleges (average $17,100/median $16,200), next were those who attended
vocational/technical school (average $15,000/median $11,900), and those borrowing the least attended public
two-year institutions (average $8,700/median $7,700).
 Students attending graduate school borrow, on average, an additional $31,700 beyond their undergraduate
borrowing, an increase of 51% since 1997. The median debt level for graduate school borrowing is $23,700, an
increase of 72% since 1997.
 In 2002, the average monthly payment on undergraduate debt is $182, vs. $161 in 1997. This 13% increase in
monthly payments is much lower than the 66% increase in undergraduate education debt.
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
3.
4.
5.
In 2001, 4.7 million students borrowed an average of $3,500 under the subsidized Stafford Loan program, and
3.4 million (including some of the same students) borrowed an average of $4,100 in unsubsidized Stafford
Loans.
 27% of the respondents report having used credit cards to help finance their education. This group had an
average credit card balance of $3,400 when they finished school.
 The typical (median) borrower devotes about 8% of monthly income to debt repayment, and only 6% of income
to repaying undergraduate loans. The mean payment-to-income ratios of 11.6% for total debt and 9% for
undergraduate debt are high enough to cause many borrowers to feel burdened by their obligations.
About 45% of college students carry a credit debt of $3,066 on average. (21)
72 percent of college students have a regular full or part-time job. (10)
Almost half of college students with credit cards have paid a fee for late payment, and 7% have had a credit card
canceled because of late payments. (26)
American Families
General:
1. Over 40% of families live off of 110% of their incomes. (27)
2. Nearly six out of 10 Americans are racing to make changes in their financial situation so they'll have enough income
when they retire. (4)
3. 85% of adults agree that young adults today lack the basic skills to successfully manage their finances, 49 percent
say youth think they are more likely to become millionaires by staring in a reality TV series than by learning how to
budget and save wisely and 75% of teens rely on their parents for personal finance information. (18)
4. 60% of American adults are more likely to turn to family members for advice rather than a financial professional.
(12)
5. A greater understanding and familiarity with financial markets and institutions will lead to increased economic
activity and growth. (21)
Debt:
1.
2.
3.
4.
5.
The average credit card balance for the age between 45 and 64 is $6,094. (30)
If you are between ages 45 and 64, chances are that you have twice as much debt as other Americans, not in this age
bracket. (30)
The average citizen is drowning in debt; and 75% of credit card holders have maxed out at least one credit card
during the past year. (31)
The percentage of income used for household debt payments, including mortgages, credit cards, and student loans,
rose to the highest level in more than a decade in 2001 and remained above 13% in 2003. (21)
It can takes decades to pay off a $3,000 credit card balance if you pay only the minimum each month. (13)
Saving & Investment:
1. Only 20% of Americans were very confident about making good investment decisions. (1)
2. 23% of Americans do not save anything at all on a monthly basis for long-term goals such as retirement or a child’s
education. (12)
3. Personal savings as a percentage of personal income decreased from 7.5% in the early 1980s to 2.3% in the first 3
quarters of 2003. (21)
4. Between 25,000,000 and 56,000,000 adults are unbanked, i.e., not using mainstream, insured financial institutions.
(21)
5. Americans on average had socked away only $40,000 in retirement savings and 25% of those surveyed had no
retirement account at all. (20)
6. More than half of American workers between the ages of 45 and 54 did not have any kind of retirement account in
1998. (32)
Bankruptcies, Defaults and Foreclosures
1.
2.
3.
Nearly 500,000 people over age 50 were forced to file for personal bankruptcy in 2002. (29)
Personal Bankruptcies were up 19% in 2002 over 2001. (2)
The fastest growing group declaring bankruptcy is young adults age 20 to 24. (26)
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4.
5.
6.
7.
8.
Consumer bankruptcy filings in 2003 hit a record of nearly 1.7 million, or an average of nearly one in every seven
households over the past decade. The bad debt costs the average U.S. family more than $500 annually through
higher consumer prices. (7)
In just 20 years, from 1981-2001, the number of women filing petitions for bankruptcy increased 662%. (19)
If the trend of increased bankruptcies continues, more than 5 million families with children will file for bankruptcy
by the end of this decade. (17)
More people this year will file for bankruptcy than will graduate from college. And more Americans will file for
bankruptcy than divorce. (17)
Personal Bankruptcies nearly doubled in the past decade. (21)
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Sources:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Boston Research Group
NCEE
NCEE, April 2003, Survey of The States, P14
FleetBoston
Teenage Research Unlimited (TRU)
Teenage Research Unlimited (TRU), Jan 9, 2004, www.teenresearch.com/PRview.cfm?edit_id=168
National Retailers Federation, Jan 28, 2004, Retailers: Attach Bankruptcy Reform to Ag Bill,
http://www.nrf.com/content/default.asp?folder=press/release2004&file=bankruptcyag0104.htm&bhcp=1
(8)
George Chamberlin, Oct 15, 2003, “Kids need to learn about money, too”, North Country Times
(9) Capital One and Consumer Action, Oct 23, 2003, Financial Educational Survey, http://phx.corporateir.net/phoenix.zhtml?c=70667&p=irol-newsArticle2&ID=462192&highlight=parents
(10) Capital One, July 29, 2003, Third Annual Back-to School Survey, http://phx.corporateir.net/phoenix.zhtml?c=70667&p=irol-newsArticle2&ID=436171&highlight=parents
(11) Northwestern Mutual, October 2003, “Teaching Kids About Money” Parent Survey Summary
(12) Northwestern Mutual, 2000, “Money Maladies”,
http://www.northwesternmutual.com/corporate/contentassets/pdfs/money_maladies.pdf
(13) My Vesta Organization
(14) Consumer Bankers Association (CBA), April 14, 2003, CBA's 2003 Financial Literacy Survey,
http://www.cbanet.org/news/Press%20Releases/Financial_literacy/2003_financial_literacy_release.htm
(15) Nellie Mae, April 2002, Undergraduate Students and Credit Cards, P1, 2,
http://www.nelliemae.com/library/ccstudy_2001.pdf
(16) Nellie Mae, February 6, 2003, College on Credit: How Borrowers Perceive their Education Debt, Page v, vi, 1, 29,
http://www.nelliemae.com/library/nasls_2002.pdf
(17) Natalie Ghidotti, Feb 2004, “In too deep”, Little Rock Family, P9
(18) Visa USA
(19) Harvard University, 2001, 2001 Consumer Bankruptcy Project
(20) Merrill Lynch, August 2003, Retirement Preparedness Survey
(21) Senator Akaka
(22) Harris Interactive
(23) MarketResearch.com
(24) Coinstar Inc
(25) Packaged Facts, 2002, The U.S. Kids Market”
(26) Alejandro Cabezut, Jan 25, 2004, Laredo Morning Times
(27) Observer, Jan 12, 2004
(28) Dr. Lewis Mandell
(29) Steven N. Taieb, Esq., Bottom Line-Personal, Nov 1, 2003
(30) Steven N. Taieb, Esq., Bottom Line-Personal, Nov 1, 2003
(31) Summit Daily News, Oct 23 2003
(32) Stanley H. Breitbard, Journal of accountancy, Dec 2003
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