By Alvin Wolcott, CPA

Financial health is not unlike physical health, most of us know that we need to watch our diet and get sufficient exercise – but how many of us do?  When it comes to being financially literate how do you stack up?  A recent survey of Americans shows we are heading in the wrong direction when it comes to understanding basic financial matters and the previous year’s results were already too low!

America scored a lowly 57% on a basic financial understanding quiz, down from 60% in 2009.  With very little formal training or education when it comes to money matters, the results are unfortunately not surprising.  To see how you stack up, here is a link to the test: the first 5 questions are the ones from the official FINRA survey with 7 additional questions to test your prowess.  The results might be an eye opener!

The study notes that “One solution to improving financial literacy would be more education…  Although 29% of respondents said they had been offered financial education at school, college or workplace, only 19% report having participated.  Yet when asked if financial education should be taught in schools, a whopping 89% of respondents said “YES.”  We couldn’t agree more!”

“While some of these categories did improve from 2009 to 2012, the overall report still showed a dismal picture of financial capability in the US. Only 41% of respondents reported spending less than their income each month, and 56% have no money set aside for emergencies. Over one-third of Americans reported paying only the minimum credit card payment each month, and 26% reported having outstanding medical bills.”

Here is a chance for you to share this quiz with your children or folks that beehive like children when it comes to their finances. Once they take the quiz have them share the results with you and have a conversation about how to improve the financial application in their own life.  (Be sure to take the quiz yourself so you can help them to a better understanding!)

To read a longer discussion on the topic see the following story: