U.S. teens were ranked next to last for their financial knowledge, according to an international survey from Visa, Inc., which asked citizens of diverse nations to rate the ability of teens in their country to understand basic financial concepts and to manage their own money.
The results are based on the responses of 25,500 survey participants from 28 countries conducted by Visa between February and April of 2012. More than 70 percent of Americans surveyed said that U.S. teens and young adults don’t understand basic money management skills, and ranked their financial knowledge as an 18.5 on a 100-point scale, the second-lowest score among nations.
Teens in Bosnia ranked last with a score of 17.8 on a 100-point scale, while survey participants from Vietnam gave teens in their country the top ranking of 61.5 on a 100-point scale. Also scoring in the top five for financial knowledge were teens from Indonesia, India, Colombia, and Mexico.
The results bode well for the high-scoring teens, according to Millionaire Corner research, which establishes a strong link between financial knowledge and the ability to build and preserve wealth. Our studies show that investors from the highest wealth levels place the highest premium on financial knowledge and credit smart investing – along with hard work and education – as one of the top three wealth-building factors.
Overall, Americans scored fourth for financial knowledge, earning an overall score of 44.6 points on a 100-point scale. Brazilians earned the top overall score, 50.4 on a 100-point scale, followed by Mexicans with 47.8 and Australians with 46.3.
Scores are based on responses to a series of five questions assessing various elements of financial knowledge. Participants were asked whether they follow a household budget and how many months’ worth of savings they had set aside for an emergency. Citizens in China, Taiwan, Hong Kong, Japan and Canada scored in the top five for establishing rainy day funds. Participants were also asked how often they talked to their children and teens about money management issues and at what age children should be taught financial literacy in schools.
On average, Americans feel the government should require that children should be taught financial knowledge by the age of 11.9 years, according to the survey. About two-thirds of American parents told Visa they talked to their children about money at least once a month. Parents in Mexico and Brazil said they spoke to their children about money most often. Mexican parents said they brought up finances with their children about 42 days a year, while parents in Brazil said they tried to impart financial knowledge about 38 days a year.