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Teens Vote Financial Institutions 'Most Unpopular'

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Teens Vote Financial Institutions 'Most Unpopular'
How parents can turn cynicism into teachable moments.

Pamela Yellen, Huffington Post  07/27/2012 7:04 pm

It's no surprise. Many adults are wary of banks and credit card companies in the wake of the economic crash and many fear another cataclysm is around the bend. Now a new study shows banks and other financial institutions are losing the popularity contest with teens.

Many youth now view the financial sector as a bully laying in wait to snatch their lunch money through predatory lending tactics and high interest charges. That's the view one gets from reading a national opinion poll of high school students recently commissioned by the University of Arizona's Take Charge America Institute for Consumer Financial Education and Research and conducted by The Financial Literacy Group.

"A healthy skepticism about financial institutions has soured into cynicism, where teenagers almost expect to be victimized by financial firms," economists Michael E. Staten and Dan Iannicola Jr. say in an article titled Warm and Fuzzy Financial Ed Doesn't Cut It Anymore.

The poll of 878 students at 18 high schools in 11 states "shows that the majority strongly distrusted financial institutions even while expressing great confidence in other things like their likelihood to find employment and to achieve financial security."

"For example, 60 percent of students polled firmly believe that credit card companies often entice people into taking on more debt that they can handle, while 70 percent believe that businesses try to 'trick' young people into spending more than they should," the article states. "Only 25 percent of students disagreed with the statement, 'the stock market is rigged mostly to benefit greedy Wall Street bankers,' and only 17 percent disagreed with the statement, 'banks are mostly interested in getting my money through hidden fees.'"

The study also found teens lacking in some basic knowledge when it comes to personal finance. For instance, 68 percent did not know that owning stocks is a riskier form of investment than owning government bonds, and more than half didn't know that a high credit score is better than a low score. MORE

PwC and Knowledge@Wharton High School to Co-host Business and Financial Responsibility Training

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PwC and Knowledge@Wharton High School to Co-host Business and Financial Responsibility Training Seminar for 150 High School Educators, All Expenses Paid

Registration Opens Today

PHILADELPHIA, July 30, 2012 /PRNewswire via COMTEX/ -- Knowledge@Wharton High School (KWHS) and PwC today announced the convening of the PwC-KWHS Seminar for High School Educators on Business and Financial Responsibility. The all-expenses-paid financial literacy conference for 150 educators will be held Sept. 28-30 on the Philadelphia campus of the University of Pennsylvania's Wharton School.

"Our goal in creating this conference is to promote financial literacy, entrepreneurship and leadership among high school students, and to provide educators with lessons and skills for their classrooms," said Mukul Pandya, executive director and editor-in-chief of Knowledge@Wharton. "We are thrilled to work with PwC to bring this training seminar to life."

While 13 states mandate personal-finance coursework as a graduation requirement, 35 percent of teens don't know how to write a check and fewer than one-in-five teachers feels prepared to teach financial literacy, according to studies from Charles Schwab and the University of Wisconsin-Madison. More

Swimming in the Real-World Financial Pool

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Shahar Ziv; Huffington Post 7/12/2012

Summer always brings a certain excitement as a new crop of freshly minted college graduates descends upon Manhattan and other cities, ready to take on the world. But while these young adults come armed with diplomas, a new wardrobe, and endless ambition, most lack a solid grasp of what it means to be financially literate. Today's graduates are diving into the real-world financial pool without even the basic strokes of personal finance. As the recent financial crisis has illuminated, not only is the water quite deep, but there are also plenty of sharks and, unfortunately, not as many lifeguards as we would have hoped.

A fundamental shift in risk, most notably in the transition from guaranteed pensions to individual retirement accounts such as 401(k)s, means that the economy that today's graduates enter is structurally different from the one of previous generations. Simultaneously, most Americans, young and old, display a strikingly low level of financial literacy. A 2010 Financial Literacy Survey of adults, conducted on behalf of the National Foundation for Credit Counseling, Inc., revealed that 34 percent of U.S. adults (over 76 million people) gave themselves a grade of C, D, or F on their knowledge of personal finance. On questions dealing with compound interest, inflation, and risk diversification, studies by Professors Annamaria Lusardi and Olivia Mitchell show significantly low rates of understanding among the general population and specifically among certain demographics including women, African Americans, and Hispanics.

The lack of financial sophistication in the United States has severe consequences. Academic research has found that individuals who are not financially literate are less likely to plan for and accumulate retirement wealth, participate in the stock market, and refinance mortgages during periods of falling rates. More

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