The financial knowledge of college freshmen

The financial knowledge of college freshmen

Stephen Avard

The problem of the study was to determine college freshmen’s financial knowledge. The entire freshman English 101, College Reading and Writing class at Texas A&M University–Commerce was surveyed. There were a total of 407 students enrolled in these classes. There were 20 multiple choice questions dealing with basic knowledge of financial issues, which should be understood in order to function in everyday life. Each question was valued at 5 points resulting in a total of 100 possible points for all 20 questions. The highest test score was 80 percent achieved only by one student and lowest was 0 achieved by six students. The average score was 34.8 percent for all students and the median score was 32.5 percent. The results on the test indeed validate the fact that recent high school graduates are not knowledgeable about everyday financial matters. It would seem that the appropriate place to resolve this issue would be at the high school level. Or perhaps since this subject matter is so important to a college graduate, perhaps universities should regard financial knowledge as being a component to their general education program and require a course in personal finance of all its students.

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The literature indicates that the high school seniors are unprepared to deal with finances when they graduate. The emphasis in the high school curriculum is on preparation for college or on acquiring skills necessary to obtain a job and to earn an income. Very little of the student’s studies focus on how to effectively use the income in dealing with financial matters such as bank accounts, investments, mutual funds, mortgages, credit cards, loans, Social Security, insurance and taxes. Only if a student has taken a high school course in consumerism, finance or in economics would he or she be exposed somewhat to every day financial issues while in school.

In 1988 the Texas State Legislature passes a bill mandating that all public high schools implement the Texas Essential Knowledge and Skills for economics with emphasis on the free enterprise system and its benefits. Section 118.2 calls for student understanding in the economics section of market economic systems, supply, demand consumer economics including risks and rewards, and the impact of investing in the stock and bond markets (Texas Administrative Code, 1998, A2 & 3).

How effective have these mandates been? The Jumpstart Coalition for Personal Financial Literacy, an organization first convened in 1995 for improving financial literacy among the young, “…determined that the average student who graduates from high school lacks basic skills in the management of personal financial affairs. Many are unable to balance a checkbook and most have no insight into the basic survival principles involved with earning, spending, saving and investing.” (Jump-start Coalition Homepage).

Having had a required course in free enterprise, are recent Texas high school graduates knowledgeable in financial matters? The purpose of this study is to determine how well recent Texas high school graduates understand basic consumer financial concepts.

HYPOTHESIS

It is hypothesized that recent Texas high school graduates who are enrolled in their first year of college will not have an effective understanding of basic financial concepts dealing with savings, investment and risk.

RELATED LITERATURE

The financial world that college students face is becoming more and more complex. A current newsletter from the National Business Education Association stresses the “…need for sound investing know-how for today’s adults.” They further state that the “…savings rates in the U.S. are dismal. Students face three long-term financial challenges: buying a home, funding their children’s education and planning for retirement” (Stock Market Survey) 2003, pp. 1-2).

David Wilcox in “Remarks to the Federal Reserve Bank of Dallas in 2000” reported that there would be “roughly 1.2 million personal bankruptcies declared in the United States that year. Further, only two thirds of eligible workers choose to participate in the retirement savings plan sponsored by their employers, even when their employers turbo-charge the plan with a match on employee contributions”(Agency Group 01, 2000). Mr. Wilcox stresses that every graduating senior should understand the concept of limited resources and choices that have to be made concerning opportunity costs, compound interest, and risk.

Jerry Mason (2000) in Educating Consumers, states that consumers are “flunking personal finance” (p. 125). “Personal bankruptcies are at an all-time high. Financial problems are among the primary factors associated in divorce. More elderly people are living in poverty than any other group. And most college graduates are emerging from their ivory towers with debt loads (student loans, auto loans, and credit card debt) substantially greater than their starting salaries.” (p. 125).

Neal Godfrey, (2002) ABA Banking Journal states, “Our kids simply don’t learn the financial facts of life … We live in the largest capitalist nation in the world, and our children graduate from high school without a clue about finance. As bankers, educators, and parents, we need to do something about financially illiterate children. Why are we in this situation in the first place? Because we never taught them” (p. 47).

Some authors question the financial sophisticating of Generation Y. Although Generation Y has “a relatively high level of disposable income”, much of the research seems to “indicate that Generation Y consumers have a low degree of financial literacy” (Palmer, Pinto, and Parente, 2001, p. 105).

In Chen’s study, “An Analysis of Personal Financial Literacy among College Students,” it is concluded that college students are not knowledgeable about personal finance (Chen, 1998). The low level of knowledge will limit their ability to make informed decisions. Although the respondents were questioned about their knowledge of savings, borrowing, insurance and investments, by far, the weakest area is investments with about 40 percent of the questions answered correctly. Chen concludes, “When individuals cannot manage their finances, it becomes a problem for society. This challenging issue needs to be addressed” (p. 107).

In a 2002 article entitled “Gender Differences in Personal Financial Literacy Among College Students,” Chen and Volpe (2002) used a large sample (924 usable responses) from multiple colleges and universities in the United States. The study sought to answer questions concerning financial literacy between men and women and their education and experience levels. “Further we find that participants’ financial literacy is geared to education and experience factors. Business majors are likely to know more about personal finance than non-business majors. Participants with more years of college experience are more likely to know more about personal finance” (p. 305).

The study further found that most individuals learn about financial knowledge through informal channels with 70 percent learning finances from their parents. Only 60 percent learn from college; 30 percent from high school. “Children seek personal finance knowledge from their parents. Yet there is evidence that American adults are themselves not knowledgeable in this area” (p. 306).

Since 2001, Harris Interactive has produced the 360 Youth College Explorer, a biannual survey of America’s college students conducted in conjunction with 360 Youth, the marketing and media arm of Alloy Inc. The 360 Youth College Explorer is the only study of college students conducted among all types of 18 to 30 year old college students, including full-and part-time students, as well as those working toward 2 or 4 year degrees. Following are findings from this study:

* Overall, college students’ discretionary purchases total more than $53 billion per year.

* Two-thirds of all college students (65%) have their own credit card, and by their senior year, ownership is 79 percent.

Worries about money are a major theme for today’s college students. Half of students worry they may not be able to find a job (52%). There are too many people living in poverty (51%) and the economy is weak (49%). Half depend upon a student loan and these students expect to owe over $25,000 upon graduation. (Exploring the College Experience, 2003)

The “2003 CFS Planning and Paying for Higher Education” survey was conducted online for CFS by Harris Interactive, a worldwide market research and consulting firm best known for the Harris Poll. The survey was conducted between April 22, 2003 and May 12, 2003 among 1,062 U. S. College seniors and college graduates. Results of the survey included the following findings. More than half of college graduates (52% report owing between $10,000 and $40,000 in student loans. More than one in three (34%) college graduates said they were unprepared to make their first monthly student loan payment. Among college graduates surveyed, more than four out of five (83%) report making monthly credit card payments. More than half of recent graduates (53%) were unaware of the Federal Consolidation Loan program. (2003. http:/www.harrisinteractive.com/news).

METHOD AND PROCEDURES

The entire freshman English 101, College Reading and Writing class at Texas A&M University-Commerce in the Fall of 2003 was surveyed. There were 25 sections of the course with 407 students enrolled. Twenty multiple choice questions dealing with basic knowledge of financial issues, which should be understood in order to function in everyday life, were prepared by tour college of business instructors who have extensive knowledge in their respective fields. Each question had three responses and a fourth response which provided the student the opportunity to respond “don’t know”. The researchers felt that it was important not to force the respondents to select an answer if they felt that they did not know it. This permits the students the opportunity to admit not knowing an answer. Each question was valued at 5 points resulting in a total of 100 possible points for all 20 questions. Appendix A presents the questions that were asked of the students.

Of major interest was whether having a course in economics or personal finance in high school would have an effect on the student knowledge of financial issues. Also the effects of age and gender were to be considered.

The questionnaires were delivered to the instructor for each section through the university on-campus mail system and they were requested to administer the test during the first class period. The students were informed that the questionnaire dealt with their knowledge of financial issues. They were told that it is anonymous and will not in any way affect their grades. Upon completion of the questionnaires in each class, they were returned to the Literature and Language Department Office and subsequently returned to the researchers. The questionnaires were delivered and returned over a three day period. The data from the questionnaires were entered into Microsoft Access Database for performing queries and to summarize and analyze the data, and to develop findings.

FINDINGS AND ANALYSIS

There were 407 students enrolled in the 25 sections of English 101. Of these 197 were male and 210 were female. The age distribution of the respondents may be seen in Table 1.

Of the 407 students, 335 or 82.3% reported having a course in tree enterprise while in high school and 70 did not have one. It is speculated that the 70 students without the course were out of state transfers or were international students. Two students did not answer the question.

Student Test Performance

The highest test score was 80% achieved by only one student and the lowest score of 0 was achieved by six students. The average score was 34.8% for all students and the median score was 32.5%. As expected, the students performed poorly on the test as a whole. Table 2, presents a frequency distribution for the student test scores.

Slightly more than 92% of the students scored below 60% thus failing the test based on a passing score of 60 or above. Almost 46% of the students scored 30% or below. Most of the students’ (211 or 52%) scores were between 30% and 50% (inclusive). A total of 290 or about 71% achieved scores between 20% to 50%.

Student Performance on Questions

Table 3 presents each of the 20 questions and the number and percentage of students who answered the questions correctly. There were only four questions which over 50% of the students answered correctly and on seven of the questions fewer than 25% answered them correctly.

On the four questions that the students achieved over 50% (#2,9,10 and 14), the highest percentage of 74.9%–answered question #2 correctly by indicating that education level attained is the most important determinant of income level. The second highest correct response percentage was obtained on question #9-61.7% who responded correctly that a CD is issued by a bank.

Almost 60% (58.5%) correctly identified the 401k plan as being the retiree’s plan where employers match employee contributions for employee retirement in question #14. Then 57.2% correctly identified the purpose of disability income insurance in question #10.

The students did very poorly on questions #4, 11, 13, 17 and 19, all of which were answered correctly by fewer than 20% of the students. A large majority of the students were not aware of how annual interest is compounded, i.e. at the end of the calendar year (#4), they do not know where stocks are initially traded when issued in the primary market (#11), and they were not aware of the primary advantage of owning a mutual fund vs. stocks, i.e. liquidity (#13).

In addition, the majority of the students were not aware that the highest coverage per dollar of life insurance would be term insurance (#17) and did not know the major difference between the Roth IRA and a traditional IRA (#19).

Only 21.9% answered #8 correctly by indicating the two advantages of a home equity loan over most consumer loans. Only about 25% of the students correctly responded to questions #15, 16 and 20. Number 15 asked to identify a financial advisor who deals in financial advice, i.e. the Certified Financial Planner. Number 16 requested the students to identify the sources and uses of Social Security Funds. Question #20 asked the students to define a blue chip stock.

Needless to say the performance of the students on this test dealing with their knowledge of financial matters was poor. Only 30 or about 7.5% would have received a passing score based on a passing score of 60.

It was found that gender and having a high school course in economics or financial planning had very little impact on overall test scores. The mean test score for males was slightly higher than that for the females, i.e. 36.3% vs. 33.4%. Also there was very little difference in score between the students having and not having a high school course in economics and financial planning. Those having either course averaged 35.0 vs. those not having such a course who averaged 34.6%. Table 4 reflects the performance of males and females on each test question.

In comparing performances on the test between males and females it should be emphasized that both groups performed poorly. The males scored higher than the females on all but four of the questions. The differences were slight for the most part; however, there were three questions in which the differences were relatively large–#6, 17 and 20. A higher percentage of males knew the advantage of a money market account compared to a savings account (#6). In question #17, one of the four questions where the females scored higher than the males, 18.6% of the females know the purpose of term insurance compared to 10.7% of the males. A higher percentage of males–32%–knew what a blue chip stock is compared to 18.1% of the females in responding to question #20.

Don’t Know Responses

The students were afforded the opportunity to answer “don’t know” if they wished on all questions. “Don’t know” was the fourth response available on all 20 questions. This would reduce the need to guess if a student did not know the answer to the question. The researchers felt it was important to offer the students the opportunity to indicate that they did not know, rather than forcing them to guess and select an answer. It is interesting to note the numbers and percentages of students who indicated that they did not know the answers to the questions. These results are presented in Table 5.

The number of don’t know responses range from a low of 16 or 3.9% for question #1, i.e. not knowing the main reason for financial planning; to a high of 281 or 69% for question #19, i.e. not knowing the difference between a Roth and a traditional IRA. Over 30% of the students reported not knowing the answers to 12 of the questions and over 40% indicated that they did not know the answer to 6 of these questions.

More than 40% of the students indicated that they did not know the answer to questions 5, 6, 13, 18, 19, and 20. Question #5 dealt with the reason to take the standard deduction in income tax. Question #6 was looking for the advantage of a money market account over a bank savings account. More than 40% of the students indicated that they did not know the major purpose of buying mutual funds as opposed to individual stocks in their response to question # 13. Question #18 dealt with the definition of a bond. Question #19 asked for the difference between a Roth IRA and a traditional IRA. Question #20 looked for the definition of a blue chip stock.

Having a course in economics or financial planning seemed to make the students somewhat more sure of their responses. For sixteen of the questions those having had a course responded with a lower percent of “don’t know” responses compared to those who did not have a course. See Table 6.

Three of the four questions where those without a course responded with a lower percentage of don’t knows were virtual ties. 6, 12 and 17. The one question where a much higher percentage of persons not having the free enterprise course had a lower percentage of don’t know responses than those having the course was question #14. which dealt with the 401k retirement plan.

There were large differences in “don’t know” responses to questions #3, 10, 11 and 13. The percentage responding “don’t know” for those having a course in economics or financial planning were significantly lower than for those who did not have the course on these questions. These questions dealt with how to measure financial condition (#3), the purpose of disability income insurance (#10), the purpose of the primary market (#11), and the advantage of mutual funds investing over investing directly in stocks. Having a course permitted the students to feel surer about their responding to these questions.

The respondents answering “don’t know” were then analyzed by gender. The results are presented in Table 7.

It is interesting to note that of the 20 questions the males answered “don’t know” at a lower percentage than the females on 18. For most of the questions the percentage differences were within 5 percentage points. But for six questions the differences were larger–#’s 4, 6, 11, 13, 19, and 20.

In question #4, a higher percentage of males were able to select an answer to the question dealing with how interest is compounded than females, i.e. 22.3% don’t know responses for the males vs. 35.7% for the females. A much higher percentage of females responded don’t know to question #6 dealing with money market deposits than males (males don’t know = 41.6%; females = 53.8%). In question #11 dealing with an initial public offering, 25.9% of the males answered that they did not know the answer while 44.8% of the females so responded. Well over half (63.8%) of the females indicated “don’t know” to the main advantage of a mutual fund compared to 45.2% of the males in question #13. For question #19, the majority of both males and females indicated that they did not know the difference between a Roth IRA and a traditional IRA, i.e. 61.4% of the males and 76.2% of the females. Sixty-four percent of the females and 36.5% of the males responded “don’t know” to question #20 regarding the definition of a blue chip stock.

SUMMARY AND CONCLUSIONS

The entire fall semester freshman class enrolled in English 101, College Reading and Writing classes at Texas A&M University-Commerce was administered a questionnaire containing 20 questions dealing with financial matters. This included 407 students all of whom responded. Questions dealing with age, gender, and whether the student had a course in economics or in finance while in high school were included in the questionnaire.

From the test scores achieved by the freshman students, it is apparent that they have a low level of understanding concerning financial concepts dealing with investing, saving and risk. The high score on the test was 80% with the average score being 34.8%. Ninety-two percent of the students failed the exam basing passing on a score of 60%. There was very little difference in the performance of the mate students versus the female students. Also, when considering whether the students had a course in economics or financial planning, it was found not to make a significant difference in the student test scores.

The extent that the students afforded themselves the opportunity to respond “don’t know” to the questions was unexpectedly higher. Over 30% of the students responded in this fashion to 12 of the 20 questions. The females responded “don’t know” in a higher percentage than males in 18 out of the 20 questions.

The results on the test indeed validate the fact that recent high school graduates are not knowledgeable about everyday financial matters. It would seem that the appropriate place to resolve this issue would be at the high school level. However, in spite of the state of Texas mandating a course in free enterprise at the high school level, the results of this test demonstrate a deficiency in this area. It is very important that a college graduate be able to interact with the financial industry in dealing with insurance, mortgages, investments and tax issues. Perhaps colleges and universities need to take the approach that they have when enrolling students who lack math skills, i.e. after performing poorly on a math entrance test, students are given the opportunity or indeed are required to take a remedial math course. Perhaps the same approach should be taken for financial knowledge, i.e. to develop a remedial program. Or since this subject matter is so important to a college graduate, perhaps universities should regard financial knowledge as being a component of their general education program and require a course in personal finance of all of its students.

APPENDIX A: SURVEY QUESTIONS PERSONAL FINANCE QUESTIONNAIRE

Gender:

Male —

Female —

What is your age:

18 or under–

19-24–

25-35–

36-45–

over 45–

Have you ever taken an Economics or Personal Finance

course in high school or college?

Yes–

No–

PLEASE CIRCLE YOUR RESPONSE TO EACH OF THE FOLLOWING QUESTIONS.

1. The main reason for personal financial planning is to:

a. know your spending

b. determine your insurance needs

c. achieve financial goals

d. don’t know

2. The primary lector to determine your income level is

a. who you know

b. your age

c. education attained

d. don’t know

3. You start to measure your financial condition by:

a. preparing a listing of all sources of income

b. creating a listing of all assets and liabilities

c. determining how much you owe on credit cards

d. don’t know

4. Annual interest is reinvested and compounded

a. each year on the anniversary of the account

b. at the end of the fiscal year

c. at the end of the calendar year

d. don’t know

5. A person uses itemized deductions rather than take the standard deduction for federal income tax calculation for the following reason:

a. filing jointly makes it more feasible

b. it is easier to calculate

c. lower taxes may result

d. don’t know

6. The advantage of Money Market Deposit Accounts over bank saving accounts is

a. greater accessibility

b. more frequent statements

c. variable rates that are generally higher

d. don’t know

7. The average non-introductory interest rate on credit card debt is

a. 10%

b. 15%

c. 20%

d. don’t know

8. Home equity loans have two advantages over most consumer loans. They are

a. lower interest rates and tax deductible

b. quarterly payments and longer terms

c. longer payment terms and monthly payments

d. don’t know

9. A certificate of deposit (CD) is issued by

a. banks

b. corporations

c. U.S. Government

d. don’t know

10. Insurance that provides payment in the event of income being interrupted by sickness, illness or accident is called

a. liability insurance

b. disability insurance

c. unemployment insurance

d. don’t know

11. English wants to invest in a newly issued stock of a test growing new company. The market he will trade in is the

a. international market

b. New York Stock Exchange

c. primary market

d. don’t know

12. Personal savings plan that allows you to set aside money for retirement, while offering you tax advantages is a

a. IRA

b. coupon

c. savings bond

d. don’t know

13. Mutual fund investing has the advantage over buying individual stocks of

a. liquidity

b. professional management

c. minimal transactions costs

d. don’t know

14. The defined contribution retirement plan that matches the employer’s contribution to the employee’s contribution to his or her retirement account is the

a. profit sharing plan

b. employee stock ownership plan

c. 401(k) plan

d. don’t know

15. A professional designation for advisors focusing on personal financial advice is

a. chartered financial analyst

b. certified public accountant

c. certified financial planner

d. don’t know

16. Social Security retirement is:

a. funded by contributions from the employee and employer which are placed into named accounts identified for each employee to be used when they retire.

b. funded by contributions from the employee only which are placed into an account for the employee to be used when they retire.

c. funded by contributions from the employee and the employer which are then transferred to current retirees for monthly retirement payments.

d. don’t know.

17. For a young person wishing to have the highest coverage of life insurance for a given dollar amount, the most appropriate type of insurance would be

a. whole life insurance

b. liability insurance

c. term insurance

d. don’t know

18. A corporate debt instrument that is a promise to provide interest payments and to repay the principal on a specified date (maturity).

a. stock

b. treasury bill

c. bond

d. don’t know

19. The major difference between Roth IRA and traditional IRA is:

a. earnings are higher with a Roth IRA.

b. you can invest more money in a Roth IRA.

c. at retirement, funds from a Roth IRA can be withdrawn tax free.

d. don’t know.

20. A blue chip stock is the stock of a

a. new technology stock

b. a large well know company

c. a defensive industry stock

d. don’t know

Table 1

The Age Distribution For Students Enrolled in English 1010

for Fall 2003

Age Number Percentage

<=18 302 74.2

19-24 90 22.1

25-35 14 3.4

36-45 1 0.2

Total 407 100.00

Table 2

Student Test Score

cumulative

Test score Number percentage percentages

100 0 0.0 100.0

95 0 0.0 100.0

90 0 0.0 100.0

85 0 0.0 100.0

80 1 0.2 99.8

75 1 0.3 99.5

70 3 0.7 98.8

65 13 3.2 95.6

60 12 3.0 92.6

55 26 6.4 86.2

50 40 9.8 76.4

45 43 10.6 65.8

40 43 10.6 55.2

35 38 9.3 45.9

30 47 11.5 34.4

25 41 10.1 24.3

20 38 9.3 15.0

15 24 5.9 9.1

10 14 3.4 5.7

5 17 4.2 1.5

0 6 1.5 0.0

Table 3

Students Answering the Questions Correctly

Question N %

1. Financial Planning 203 49.9

2. Income Level 305 74.9

3. Financial Statement 167 41.0

4. Compound Interest 46 11.3

5. Tax Deductions 170 41.8

6. Money market Deposits 118 29.0

7. Credit Card Debt Rate 143 35.1

8. Home Equity Loan 89 21.9

9. Bank Savings 251 61.7

10. Disability Insurance 233 57.2

11. Initial Public Offering 65 16.0

12. IRA Retirement Savings 170 41.8

13. Mutual Fund 64 15.7

14. Retirement Savings 238 58.5

15. Cert. Fin. Planner 111 27.3

16. Social Security funds 107 26.3

17. Term Life Insurance 60 14.7

18. Define Bond 138 33.9

19. Roth IRA 61 15.0

20. Blue Chip Stock 101 24.8

Table 4

Correct Answers by Gender

male female

Question N % N %

1. Financial Planning 103 52.3 100 47.6

2. Income Level 151 76.6 154 73.3

3. Financial Statement 82 41.6 85 40.5

4. Compound Interest 26 13.2 20 9.5

5. Tax Deductions 93 47.2 77 36.7

6. Money market Deposits 64 32.5 54 25.7

7. Credit Card Debt Rate 65 33.0 78 37.1

8. Home Equity Loan 45 22.8 44 21.0

9. Bank Savings 123 62.4 128 61.0

10. Disability Insurance 117 59.4 116 55.2

11. Initial Public Offering 31 15.7 34 16.2

12. IRA Retirement Savings 83 42.1 87 41.4

13. Mutual Fund 27 13.7 32 15.2

14. Retirement Savings 119 60.4 119 56.7

15. Cert. Fin. Planner 58 29.4 53 25.2

16. Social Security funds 52 26.4 55 26.2

17. Term Life Insurance 21 10.7 39 18.6

18. Define Bond 71 36.0 67 31.9

19. Roth IRA 38 19.3 23 11.0

20. Blue Chip Stock 63 32.0 38 18.1

Table 5

Students Responding “Do Not Know” To a Question

Question N %

1. Financial Planning 16 3.9

2. Income Level 49 12.0

3. Financial Statement 37 9.1

4. Compound interest 119 29.2

5. Tax Deductions 166 40.8

6. Money Market Deposits 195 47.9

7. Credit Card Debt Rate 124 30.5

8. Home Equity Loan 153 37.6

9. Bank Savings 83 20.4

10. Disability Insurance 55 13.5

11. Initial Public Offering 145 35.6

12. IRA Retirement Savings 100 24.6

13. Mutual Fund 223 54.8

14. Retirement Savings 125 30.7

15. Cert Fin. Planner 158 38.8

16. Social Security funds 116 28.5

17. Term Life Insurance 124 30.5

18. Define Bond 174 42.8

19. Roth IRA 281 69.0

20. Blue Chip Stock 207 50.9

Table 6

Free Enterprise Course Impact on Don’t Know Responses

Have course Do not have Course

Question N % N %

1. Financial Planning 13 3.9 3 4.3

2. Income Level 40 11.9 9 12.9

3. Financial Statement 25 7.5 12 17.1

4. Compound Interest 94 28.1 25 35.7

5. Tax Deductions 136 40.6 30 42.9

6. Money Market Deposits 162 48.4 33 47.1

7. Credit Card Debt Rate 101 30.1 23 32.9

8. Home Equity Loan 123 36.7 30 42.9

9. Bank Savings 65 19.4 18 25.7

10. Disability Insurance 40 11.9 15 21.4

11. Initial Public Offering 113 33.7 32 45.7

12. IRA Retirement Savings 83 24.8 17 24.3

13. Mutual Fund 179 53.4 44 62.9

14. Retirement Savings 108 32.2 17 24.3

15. Cert. Fin. Planner 130 38.8 28 40.0

16. Social Security funds 93 27.8 23 32.9

17. Term Life Insurance 103 30.7 21 30.0

18. Define Bond 141 42.1 33 47.1

19. Roth IRA 232 69.3 49 70.0

20. Blue Chip Stock 169 50.4 38 54.3

Table 7

Don’t Know Responses by Gender

male female

Question N % N %

1. Financial Planning 8 4.1 8 3.8

2. Income Level 18 9.1 31 14.8

3. Financial Statement 20 10.2 17 8.1

4. Compound Interest 44 22.3 75 35.7

5. Tax Deductions 74 37.6 92 43.8

6. Money Market

Deposits 82 41.6 113 53.8

7. Credit Card Debt Rate 54 27.4 70 33.3

8. Home Equity Loan 67 34.0 86 41.0

9. Bank Savings 38 19.3 45 21.4

10. Disability Insurance 24 12.2 31 14.8

11. Initial Public Offering 51 25.9 94 44.8

12. IRA Retirement

Savings 46 23.4 54 25.7

13. Mutual Fund 89 45.2 134 63.8

14. Retirement Savings 56 28.4 69 32.9

15. Cert. Fin. Planner 74 37.6 84 40.0

16. Social Security funds 51 25.9 65 31.0

17. Term Life Insurance 52 26.4 72 34.3

18. Define Bond 73 37.1 101 48.1

19. Roth IRA 121 61.4 160 76.2

20. Blue Chip Stock 72 36.5 135 64.3

Reference

Agency Group 01. 2000. “Importance of improving financial proficiency of young people” treasury assistant secretary for economic policy David W. Wilcox remarks to the Federal Reserve Bank of Dallas, Dallas Texas. FDCH Regulatory Intelligence Database, 11/13/2000.

Chen, H. (1998). An analysis of personal financial literacy among college students. Financial Services Review. Vol. 7 Issue 2, 107-129.

Chen, Haiyand & Volpe, Ronald P. (2002). Gender differences in personal financial literacy among college students. Financial Services Review, 11,289-307.

Exploring the college experience. (2004, March). Trends & Tudes, 2, 1.

Harris interactive poll. (2003, March). Retrieved May 21, 2004, from http://www.harrisinteractive.com/news

Jump Start Coalition Homepage. Retrieved May 7th, 2004, from http://www.jumpstart.org

Mason, J. (2000). Educating Consumers. Advisor Today, Vol. 95 Issue 2, 125-130.

Neale, Godfrey (April, 2002). The ‘dud’ generation. ABA Banking Journal. 94 (4) 47.

Palmer, T. S., Pinto, M. B., & Parents, D. H. (2001). College Students’ Credit Card Debt and the Role of Parental. Journal of Public Policy & Marketing, Vol. 20 Issue 1, 105-114.

Stock Market Savvy. (2003) National Business Education Association, Vol. 14 No. 6.

Texas Administrative Code, Title 19, Part II, Chapter 118, Texas Essential Knowledge and Skills for Economics with Emphasis on the Free Enterprise System and Its Benefits (Austin, 1998), 2-3.

Texas Education Agency, Economics Education: A State Assessment in Texas (Austin, Texas: 1979), 1.

STEPHEN AVARD, EDGAR MANTON, DONALD ENGLISH AND JANET WALKER

Texas A&M University–Commerce

COPYRIGHT 2005 Project Innovation (Alabama)

COPYRIGHT 2005 Gale Group