By Jamie Burns
April is National Financial Literacy Month, and it couldn't arrive at a better time for Americans who can't answer the most basic questions concerning personal finance.
A recent national survey completed by the
Center for Economic and Entrepreneurial Literacy in Washington showed that although economic issues have been in focus for months, people still have trouble understanding fundamental financial concepts and terms.
According to the survey, 53% of the respondents said that they didn't know what the Dow Jones Industrial Average was, 52% couldn't describe the advantages of a Roth individual retirement account, and 43% couldn't identify a Fico score as the most important factor in receiving a loan.
Respondents were also unfamiliar with topics that can greatly affect their wallets. The survey showed that 76% didn't know that bouncing a check was more expensive than short-term payday loans, and 71% severely underestimated the amount of time necessary to pay off a credit card balance while making only minimum payments.
"You'd think that with all of the media coverage about the economy right now, you would see improvement," said James Bowers, the center's managing director. "There are financial experts discussing advanced details of the economy, but they should really start at square one because the American public is at square one when it comes to basic financial knowledge."
The survey results also highlight the need for mandated education programs for students in order to broaden economic literacy at an earlier age, Mr. Bowers said.
The center's website, Econ4U.org, provides quizzes and data for adults who are looking for help with homeownership or investments, as well as teenagers who are seeking information about credit cards or student loans.
The survey — of 1,000 participants — was conducted March 23-28.
