Building Wealth
Literature Review of Financial Literacy
Building Wealth as a Nation
Denise Fesel
WRIT 391, Spring 2
UMUC
10 May 2012
Literature Review of Financial Literacy
Building Wealth as a Nation American adults have not mastered basic economic skills and are considered financially illiterate. When it comes to the financial literacy of America’s young people, the news is equally disturbing. In 2006 former Federal Reserve Chairman Alan Greenspan stated that “our children are financially illiterate and are unable to inherit the global economy unless we start to educate them in elementary school.” Seventy percent of the parent’s surveyed state that most children feel a sense of entitlement and expect to have whatever it is they want, whenever they want it. From more than 46,000 high school students surveyed nationwide in May of 2008, the average financial literacy score was 56%. Gavigan (2010) noted that even with 10 hours of financial literacy training significant change in behavior happens. The challenge is getting a core course incorporated into the school system. Additionally, he lists many curricula that are already tested and available for use, but fiscal constraints strap educators who are reluctant to add more to the curriculum. The need to develop more adult financial literacy education has become more urgent due to the number of people who are now encountering financial distress. Chinen and Endo (2012) investigate how personal finance is affected by age, gender, and education of parents using samples of college students measuring attitudes of financial education while attending high school. Students were from different academic majors and were measured on basic financial education and advanced knowledge. They found a positive correlation of financial literacy and recommended that a basic structure of finance and economy be included as a requirement for high school students. The authors used questions designed to
Building Wealth as a Nation
Denise Fesel
WRIT 391, Spring 2
UMUC
10 May 2012
Literature Review of Financial Literacy
Building Wealth as a Nation American adults have not mastered basic economic skills and are considered financially illiterate. When it comes to the financial literacy of America’s young people, the news is equally disturbing. In 2006 former Federal Reserve Chairman Alan Greenspan stated that “our children are financially illiterate and are unable to inherit the global economy unless we start to educate them in elementary school.” Seventy percent of the parent’s surveyed state that most children feel a sense of entitlement and expect to have whatever it is they want, whenever they want it. From more than 46,000 high school students surveyed nationwide in May of 2008, the average financial literacy score was 56%. Gavigan (2010) noted that even with 10 hours of financial literacy training significant change in behavior happens. The challenge is getting a core course incorporated into the school system. Additionally, he lists many curricula that are already tested and available for use, but fiscal constraints strap educators who are reluctant to add more to the curriculum. The need to develop more adult financial literacy education has become more urgent due to the number of people who are now encountering financial distress. Chinen and Endo (2012) investigate how personal finance is affected by age, gender, and education of parents using samples of college students measuring attitudes of financial education while attending high school. Students were from different academic majors and were measured on basic financial education and advanced knowledge. They found a positive correlation of financial literacy and recommended that a basic structure of finance and economy be included as a requirement for high school students. The authors used questions designed to