What's Your Financial Fitness Score?
by Jan Garkey
Most Americans need a wake-up call when it comes to personal finances. Are you one of the happy exceptions?
How bad is bad?
 Study after study shows that many consumers lack an understanding of basic financial skills:
Only 26% of 13- to 21-year-olds reported that their parents actively taught them how to manage money.
JumpStart Coalition survey
Only four states required students to complete a course that includes personal finance before graduating from high school in 2002.
Survey of The States by the National Council on Economic Education, April 2003
Personal savings as a percentage of disposable personal income decreased from 7.5% in the early 1980s to 2.1% in early 2004.
Bureau of Economic Analysis
In 2003, 1.624 million households filed for bankruptcy, more than twice the level of 1994.
U.S. Bankruptcy Courts
Americans on average have socked away only $40,000 in retirement savings, and 25% of those surveyed have no retirement account at all.
Merrill Lynch Retirement Preparedness Survey, August 2003
Why should we care?
Without a good handle on personal finances, we make poor spending decisions, max out several credit cards, don't save for emergencies, can't balance our share draft/checking accounts, don't check our credit reports for errors, pay higher interest rates, become more likely to have our identities stolen, get defrauded by unscrupulous auto dealers and Web crooks, make poor investment choices, and underestimate our financial needs in retirement.
It doesn't have to be that way. The answer: Financial literacy. Knowledge. Master a few skills and get with the program.
What's your score?
Our online financial literacy quiz is based on the quiz used for National Consumer Protection Week in February 2004. We will tally quiz responses in the aggregate (that means we can't pin any answers to any individual) and use them only for the purpose of writing more articles about financial literacy in general.
Join thousands of others taking the quiz. It will help you figure out what you know and what you don't know. It might be the reassurance that you're on track, or it just may be that wake-up call you've needed to take the first step toward improving your financial future.
October 4, 2004
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