Financial Literacy, Part 2

“What good is it if high-school students learn about Flaubert, biology, and trigonometry if they don’t learn how to take care of their money?” – Stephen J. Dubner.

In my last post, I discussed the importance of access to financial education and advice for everyone.

A post by Stephen J. Dubner, co-author of Freakonomics, asks a very provocative question: Are We a Nation of Financial Illiterates? 

He asks:
1. Do you consider yourself financially literate?
2. If so, how did you get that way?
3. How important is widespread financial literacy to the health of a modern society?

Dubner believes that financial literacy is a very important issue (obviously, or he wouldn’t have written the article).

To assess your own competence, answer Dubner’s three sample questions, which have, by the way, been used in national surveys. Note that only 1/3 of respondents 50 and older got all three questions right!

His prescription for increasing financial literacy is derived from an interview with Annamaria Lusardi, a professor of economics at Dartmouth. Given yesterday’s inauguration of Barack Obama, of particular interest is her answer to the question, “If you were president of the U.S. for a day (or longer), what are 5 pieces of financial literacy that you’d try to have taught to everyone?”

Dubner provides his own answer to that question.