National Survey Finds Low Economic Literacy
This entry was posted on 5/23/2008 2:05 PM and is filed under Psychology.
WASHINGTON, May 22, 2008 /PRNewswire-USNewswire: The Center for
Economic and Entrepreneurial Literacy (CEEL) today released a public
service announcement (PSA) along with a new survey that both underscore
the need for increased education on personal finance and economic
issues. The national survey conducted this month shows that an
overwhelming number of Americans are unable to answer even the most
basic questions about borrowing and interest rates.
Startling highlights from the survey include:
- 69% of respondents do NOT know that you have to pay both the
interest on your entire balance as well as a late fee when making a
late credit card payment;
- 97% of respondents can NOT identify the percentage that service
fees typically take out of a $20 ATM withdrawal. Over 90% either didn't
know how much the fee would be or thought it was less than it really is.
- Nearly 70% of respondents did NOT identify "FICO score" as the
most important factor in obtaining a home loan, when asked to choose
from a list of four factors;
- Only 16% of respondents knew that you can withdraw money from a
Roth IRA for education expenses, your first home purchase, and
retirement spending.
In order to highlight this problem, CEEL's public service
announcement will be distributed to over 1000 local television channels
across the country. The PSA features three children discussing what
their loan options would be when purchasing a doll house. The ad
illustrates how confusing getting a mortgage can be especially for
those who haven't been educated on the subject matter. You can view the
ad at http://econ4u.org/
"When so many Americans are unable to answer the most basic
questions about personal finance and debt, it is clear that economic
illiteracy is a problem that needs to be corrected in this country,"
said Kristen Lopez Eastlick, senior economic analyst for the Center for
Economic and Entrepreneurial Literacy. "You don't have to watch the
Suze Orman Show to realize just how important it is that we increase
personal finance education at a young age so we have better informed
employees, borrowers, and voters."
This press release presents the findings of a telephone survey
conducted by Opinion Research Corporation among 1,004 adults living in
private households in the continental United States.
The Center for Economic and Entrepreneurial Literacy (CEEL) teaches
important economic concepts that are easy to understand and retain.
CEEL is a project of the Employment Policies Institute.
Source: The Center for Economic and Entrepreneurial Literacy
