Youth Want More Opportunities for Financial Education: Survey

By Jennifer Rubin, foundry10 researcher

Despite increased calls for mandatory financial education, just 21 states require high school students in the US to complete a course in personal finance. In Washington state, for example, the integration of financial education standards into curriculum has often been left up to individual school districts.

As a result, some students may leave school with an understanding of how to buy a car, establish good credit, and balance a budget, while others don’t know how to open a bank account.

Financial education is particularly important for young people from different socioeconomic backgrounds. Research shows that in districts that have financial education requirements, students from low-income households have a better understanding of how to finance college.

Financial Knowledge and Attitudes Survey

The newly-formed Financial Education team at foundry10 is interested in youth’s experiences with personal finance so that they can best support their needs as they transition to young adulthood.

To help accomplish this goal, the team administered a mixed-methods study to examine the financial attitudes and knowledge of young people who participated in foundry10’s high school and college internship program. This exploratory research will inform future financial education programming at foundry10.

Survey Participants

Nineteen participants completed the Financial Attitudes and Knowledge Survey. The response rate was 86% (a total of 22 high school and college interns participated in the summer program at foundry10).

Overview of Findings

Education

Though all of the survey participants said they would have liked more opportunities to learn about managing finances in high school, only 10% had the opportunity to take a financial education class.

Graphic: foundry10

• Most participants did not take a financial education class in high school. Of the participants who did take a financial education class, only two participants took part in a dedicated course; the remaining participants received some financial education as part of a larger course (e.g., economics).
• Participants reported that the most common topics covered in a financial education class were saving, bank accounts, and student loans.
• Participants reported that the least common topics covered in a financial education class were taxes, insurance, and building credit.
• Most participants did not take a financial education class in middle school.

What financial education topics did participants learn in high school?

Youth reported learning about saving, but not much about investing, building credit or taxes.

Graphic: foundry10

A total of nine participants indicated that they received financial education in high school.

Financial Literacy

• Participant’s average score on the financial literacy test was a D.
• Participants scored the lowest on a question that assessed their knowledge of federal income taxes.
• Participants scored the highest on a question that assessed their knowledge of compound interest.

Parental Socialization

• Participants indicated that they talked with their parents about personal finance. The most popular topics that youth and parents discussed included distinguishing between wants and needs, saving, and bank accounts.
• The least popular topics that youth and parents discussed included insurance, investing, and taxes.

How frequently do parents talk to participants about personal finance?

Parents of the survey participants frequently talked to their kids about assessing their wants vs. needs when deciding how to spend money. Youth heard less from their parents about paying taxes and buying health insurance.

Graphic: foundry10

Response options range from 1(Never) to 4(Always). Higher scores indicate more frequent parental communication. The mean and standard deviation are included for each item.

Financial Attitudes and Behaviors

What are participant attitudes towards personal finance?

Many youth participants felt that more money could bring more happiness and were eager to save for the future. Spending money caused moderate anxiety.

Graphic: foundry10

• Participants indicated that financial planning and saving for the future were important to them.
• Participants reported moderate financial anxiety.
• Participants reported moderate attitudes equating money with happiness (e.g., “Having more money than others can bring happiness”).

COVID-19 and Personal Finance

Graphic: foundry10

Methodology

This survey is part of a larger study exploring the financial attitudes of adolescents and young adults. High school and college summer interns at foundry10 were asked to participate in the Financial Attitudes and Knowledge online survey. Participants were given time to complete the survey during their regularly scheduled internship hours at foundry10. For participants under 18 years of age, the research team obtained parental consent and child assent. For participants over 18 years of age, the research team obtained participant consent. Participation in the survey was voluntary, and participants could skip questions at any time. The survey took approximately 10 minutes to complete. Each participant received a $15 gift card for taking part in the survey.

Survey

The survey assessed the following domains: young people’s attitudes about finances, knowledge of financial literacy topics, quality of financial education in schools, family communication around finances, and financial attitudes during the COVID-19 era. We devised questions for this survey based on the available literature investigating young people’s financial literacy and attitudes. A description of the survey measures are found below:

• Financial Literacy (Breitbach & Wagner, 2018): We used a 10-item financial literacy measure validated by Breitbach & Wagner (2018). While there are some questions that are quantitative in nature, others are topic based. The decision to use numerical and topic based questions allowed for a more holistic understanding of participant’s financial knowledge.
• Money Attitudes and Behavior Scale (Grohs-Müller and Greimel-Fuhrmann, 2018): We used select subscales from Money Attitudes and Behavior Scale. This validated measure assessed young people’s attitudes towards money and their financial behavior in terms of consumption and saving. We selected subscales that were of most interest to foundry10. Subscales that were used in the current research included the following: attitudes about money (happiness and power), rational consumption, financial planning, financial anxiety, and saving for the future.
• Financial Communication Scale (Schweichler at al., 2013): To examine parental socialization around finances, we used a measure assessing parental communication. The scale consisted of fifteen financial topic items (e.g., budgeting, building credit, medical insurance). Participants answered according to their perception of parental (or guardian) direct communication about those financial topics.
• Financial Education Questions: We created questions that assessed the types of financial education (if any) that participants received in school.
• COVID-19: We created two open-ended questions about student’s attitudes about personal finance during the COVID-19 era. These questions assessed participants anxiety about finances and participant’s attitudes about money.
• Demographics: We included demographic questions that assessed participant’s age, gender, grade level in school, race/ethnicity, and parental/guardian education.

Future Directions

This exploratory study showed that young people lacked formal financial education opportunities in high school and college. In our future research, we aim to examine relationships between educational opportunities, knowledge, and attitudes. For example, does receiving financial education in high school predict greater financial literacy?; Does parental communication around finances predict decreased financial anxiety?; Do young people’s attitudes toward money predict saving habits? We hope to gain additional clarity around youth’s experiences with personal finance so that we can best support their needs as they transition to young adulthood.

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