Bajtelsmit Column: are You Smarter Than a High School Student?

Note to Editors: Vickie Bajtelsmit is a finance professor in the Colorado State University College of Business and the author of three personal finance books.

In case you missed it, April was Financial Literacy Month. Concerned officials hope that by designating a month to this topic, they can direct attention to a potentially large educational deficiency. Recent scores on a test sponsored by the Jump$tart Coalition for Personal Financial Literacy paint a fairly dismal picture.  Our nation’s high schoolers averaged less than 50 percent correct and college students didn’t do much better.

What exactly is financial literacy?  The national standards cover a wide range of personal finance topics including household budgeting and spending, interest rates and borrowing, insurance and risk management, saving, investing, and taxes. Other surveys have shown that many adults don’t do much better than high school students on these topics.

So are you smarter than a high school student?  You can test yourself, as well as download the summary results and correct answers, at www. Although the actual survey is given in the form of a multiple choice test, try the following True/False questions modeled after a few that more than half the high school students missed:

1)     You can only check your credit report for free if you are turned down for credit based on a credit report.

2)     To save for your baby’s college education, investing in stocks for 18 years will tend to give you the highest growth, as compared with U.S. government savings bonds or bank savings accounts.

3)     If your credit card is stolen and the thief runs up charges of $1,000, but you notify the issuer of your credit card as soon as you discover it is missing, you will not be responsible for any of the thief’s charges on your card.

4)     If you have caused an auto accident, the damage to your own car will be covered by your auto liability insurance.

5)     Interest on your bank savings account is not subject to income tax.

The correct answers are 1) False. You are entitled to a free credit report each year. 2)True. 3) False. You are responsible for the first $50. 4) False. Collision insurance, not liability, covers your own vehicle. 5) False. It’s taxable unless you have relatively low income. You may be happy to know that if you got at least two correct, you beat the high school students.  

Many experts believe we can solve our nation’s financial literacy problem by teaching basic financial concepts at a very early age.  Junior Achievement is a national program in which volunteers from the business community teach short lessons on business and economics to students in K-12. I have been a JA elementary school volunteer in Fort Collins for the last 15 years and have found that kids love to learn more about money and investing. If you are interested in becoming a JA volunteer, the local office can be reached at 490-1035.

In many states, schools are adding financial literacy learning goals to K-12 curricula. Just this month, a bill sponsored by State Rep. Rosemary Marshall, requiring the creation of financial literacy standards for high school students in Colorado, passed the State House. It will be brought to the Senate by Sen. Chris Romer.

Mandating personal finance education in our high schools is absolutely a great idea, as long as we appropriately fund that mandate.  New teachers may need to be hired in Colorado high schools, or current teachers may need continuing education in personal finance. Schools will need to buy books and other materials. A basic principle of personal finance is that you can’t achieve your financial goals without budgeting for them.