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NEW YORK - April 1, 2024 – Goalsetter, an award-winning family financial education-focused spending and savings platform, today released the findings of its latest study, “Are You Smarter Than a 12th Grader?”, a revealing look at the state of financial literacy for students in America’s top universities. The results of the quiz found widespread deficiency in the understanding of core personal finance concepts, with students scoring an average of 51% on the quiz. 

Download the report on CUNA Strategic Services Knowledge Center.

The study assessed the financial literacy levels of 1065 undergraduate students at three Ivy League universities through an online quiz mapped to and the Council for Economic Education (CEE) high school financial literacy standards. The results exposed a startling gap in basic financial knowledge, indicating a pressing need for enhanced financial education initiatives for U.S. teens and young adults.

Before taking the quiz, 55% of students believed that they had “a solid understanding of core personal finance concepts.” After responding to the 15 quiz questions, the percentage of students who felt confident about their knowledge dropped to 30%.

Key findings of the assessment include: 

  • Below Average Scores: On average, students scored 51% with underclassmen scoring even lower at 48%, both of which would be considered failing grades. 
  • Budgets and Saving: Not surprisingly, 93% of students surveyed have a debit card, indicating their familiarity with spending. However, only 48% understood the power of compound interest, and only 47% knew the 50/30/20 rule of budgeting.
  • Credit and Debt Management: While 70% reported having a credit card, the majority doesn’t understand recommended strategies for managing credit card debt.
  • Investing and Retirement: Of the 58% of students who plan to retire early, only half understand what an IRA is. 

“The results of this study underscore the critical need for increased emphasis on meeting people where they are when it comes to financial literacy education,” said Tanya Van Court, CEO of Goalsetter. “No single socio-economic group is immune from the danger that a lack of financial literacy poses. Cultivating a financially literate future generation contributes to ensuring the economic security of our nation.”

The results of the Goalsetter quiz are in line with the 2022 TIAA Institute-GFLEC Personal Finance index, which found that when testing adults on their financial literacy, on average, they could only answer about 50% of the 28 basic money questions that were used to gauge their knowledge. More importantly, approximately (23%) got seven or fewer questions correct, the worst showing before any other year of the survey.

“When we fail to prepare our children with financial knowledge that they will need for everyday decisions, we set them up to learn by trial and error, making them susceptible to expensive mistakes,” said Van Court. “Moreover, we prevent them from starting their wage-earning years with the foundational knowledge that is essential for building wealth. With wealth building, time is an essential component of the equation, so every year that they lack financial knowledge is a year that will likely detract from their eventual net worth. Learning concepts when you’re 28 that you should have learned by age 18 is a costly delay.”  

As part of its advocacy, Goalsetter underscores the importance of driving a collective effort that helps to bridge these gaps, including providing comprehensive financial education in schools, colleges, universities, and financial institutions that covers basic concepts such as budgeting, saving, interest rates, and debt management, as well as investing, retirement planning, and long-term wealth building.

Goalsetter savings accounts are provided by our banking partner, Evolve Bank & Trust, Member FDIC. Deposits held at Evolve Bank & Trust are protected by FDIC insurance up to allowable limits per depositor, per account ownership category. Cashola Prepaid Debit Mastercard® is issued by Pathward, N.A., Member FDIC, pursuant to license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Pathward, N.A., a national bank, is a subsidiary of Pathward Financial, Inc. (Nasdaq: CASH), a South Dakota-based financial holding company. At Pathward, our mission is Financial Inclusion for All®. We strive to remove barriers to financial access and promote economic mobility by working with third parties to provide responsible, secure, high quality financial products that contribute to the social and economic benefit of communities at the core of the real economy. Pathward works to increase financial availability, choice, and opportunity for all. Cashola Prepaid Debit Mastercard® is issued by Pathward, N.A., Member FDIC, pursuant to license by Mastercard International Incorporated.

About Goalsetter:

Founded in 2016, the affiliated Goalsetter Companies are family saving, investing, financial education, and smart spending platforms that make it easy for the whole family to go cashless while teaching them how to be money smart. Centered around fun, relevant, and engaging financial education content, Goalsetter’s smart money platform for families provides users with an NCUA-Insured Savings Account; the Mastercard CasholaTM teen and tween debit card with parental controls, game-based financial education quizzes; the "Learn Before You Burn" parental control feature on the debit card and the "Learn to Earn" financial reward program.

Goalsetter was founded by former Nickelodeon and Discovery Education children's digital programming executive Tanya Van Court.