As a parent, you're probably familiar with comparisons of how educated American students measure up to those in other countries, and the results don't typically come back in favor of the best and brightest in the U.S.
A recent study by the Organization for Economic Development and Cooperation, an international forum of governments, found that the trend is not limited to academia. The data showed that while teens in the U.S. are in the top ten for financial literacy when compared to other countries, they barely made it, coming in at ninth. The study looked at 29,000 students worldwide - 1,133 were from the States and had an average ranking between eighth and 12th.
Shanghai, China, topped the list and was followed by Flemish Community (Belgium), Estonia and Australia. Of the 18 countries in the OECD, Columbia was at the bottom of the list. Although U.S. students didn't fare as well as some of their overseas counterparts, the OECD said that students worldwide could use more education about topics such as opening a checking account, saving money and budgeting.
"Developing financial literacy skills and knowledge is critical now that individuals are becoming increasingly responsible at an ever earlier age for financial risks affecting their future," said Angel Gurría, OECD secretary general.
Where are U.S. students falling short?
The study also found that much of the reason behind the financial literacy setbacks for teens in the U.S. is education, according to CNBC. Some countries such as New Zealand and Australia make financial education a mandated part of school curricula. Meanwhile, only four states in the U.S. require high school students to take a personal finance course as part of their graduation eligibility criteria. Sixteen states mandate that financial literacy be part of coursework.
Despite these setbacks, all hope is not lost. Parents can step in and have regular conversations with their children about applying for loans, how to open a savings account and what certain financial terms mean. If you need your own financial education refresher before talking to your teen, you can chat with one our bankers to update your knowledge and discover if your current financial strategy is best for you.
"Talk to your kids about money," Ted Beck, president and chief executive for the National Endowment for Financial Education, told CNBC. "It's a continuous process."
For more information about smart ways to manage your finances, contact Landmark Bank.
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