More on Financial Literacy Problems

It’s a subject that is becoming more and more relevant over the years, in truth it may be even more important than just normal literacy.  There are a huge number of  reports and surveys pointing to the low level of financial literacy among young people all over the developed world.  In fact when you see the huge debt problems that have dragged down economies and banks, then perhaps it’s time to start taking this a little more seriously.

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The latest survey of financial literacy of any note was conducted by CNN who looked at 15 year olds in over 18 countries.  The results were quite surprising,  with the US students ranked about midway.  The top results went to the Chinese students, but there were good performances from Belgium, Estonia, Australia and New Zealand.  Within the tables though were worrying statistics like 20% of US students didn’t even make a level of ‘baseline efficiency’.

The reality is that if a subject is  not learnt at school it is often not learnt in adult life either.  Just as not being proficient in reading and writing can cause huge issues for adults, arguably financial illiteracy can wreak even more chaos.  It’s something that worries a lot of people, that adults often simply have no idea about debt, it’s costs , how to borrow money and paying it back.  You can travel around very poor areas with high levels of debt and see individuals driving around in cars which cost multiples of their annual salary.

The survey doesn’t really suggest that Chinese have all the answers to financial education though.  The students who were studied were hardly representative of the population as a whole.  Many of the were considered ‘gifted academically’ and they were all from China’s financial centre – Shanghai where education is generally far superior to rural areas.  But perhaps the lesson is that people with wealth and education, are more likely to have more success with money in the future.

There are definitely some lessons to be learnt though from all the countries who have done well.  All of  the top performers had financial literacy elements in their curriculum from a country wide basis.  Indeed there is an extensive financial literacy effort in Australian schools who are often recognised as being pro-active in many areas of education.  For example many pupils there take an interest in European economics and news, often logging in to BBC Iplayer Australia like this -

One of the issues that the US has is that decisions on what is taught in the classroom about finance is actually devolved to the states themselves rather than being mandated from a Federal level with many opting out of these recommendations. It does seem rather crazy to ignore financial education considering the amount of chaos large levels of private debt have helped cause in the last few years.

The world is growing ever smaller, and the financial skills of citizens of every country are likely to have a growing effect on the success of a country. The Japanese economy was built on a mountain of private debt and rampant materialism, it’s spent decades in the doldrums ever since that bubble of consumerism simply blew up the economy at the end of the last century. There are some excellent documentaries around the world about the effect of high levels of private debt in many European countries – they’re accessible by using a UK VPN for the British ones in any case.

Is the End in Sight for Printed Media

A recent study by  the National Literacy Trust has just completed a rather interesting study.  It surveyed over 35,000 children aged from 8 to 16 with regards a variety of subjects.  One of the most startling results although perhaps not altogether surprising is the fact that young people would much prefer to read something on a screen than written down.

Of course people and especially the young have been brought up in a screen based culture.  Mobile phones, laptops and tablets are all over our home and it is inevitably one of these that our children will reach for when looking for information.  How many of us I wonder have rows of encyclopedias or reference books which hardly get a look in any more – want to know something you’ll probably look on the internet.

The figures came in at 52% of those surveyed would rather read something on a screen than written down.  32% still preferred normal print and the rest didn’t express a preference. Of these young people, almost 39% will read something on a screen every day compared to 28% with normal print.

In  the UK now 97% have access to computer and the internet at home, in fact 77% of children sad that they had their own computer.  When questioned about other related areas like newspapers and current news affairs the pattern was repeated with most seeking  their information from a screen.

In fact  the internet is becoming part of most aspects of our childrens lives.  From research, news and socialising – much of it is done virtually using the internet.   Even traditional screen based entertainment is being affected with people often watch videos and even TV online using a computer rather than a traditional TV.  Using various technologies to watch favorite programs via laptops and iPads like this site demonstrates - http://www.uktv-online.com/online-british-tv-abroad/, which  they can even use abroad on holiday.

National Literacy Trust director Jonathan Douglas said: “Our research confirms that technology is playing a central role in young people’s literacy development and reading choice.

“While we welcome the positive impact which technology has on bringing further reading opportunities to young people, it’s crucial that reading in print is not cast aside.”