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The Inclusive Economy
National Financial Capability Challenge
By Ethan Geiling on 03/11/2011 @ 02:15 PM
It’s that time of year again! No, I don’t mean Mardi Gras. I’m talking about the 2011 National Financial Capability Challenge, sponsored by the Department of Treasury. Each year, thousands of high school students across the country participate in the Challenge, which consists of a voluntary online exam, often coupled with financial capability lessons in the classroom. This year, the Challenge runs from March 7 to April 8. 76,892 students participated in the challenge last year, and 524 of these students earned a perfect score. Many of the concepts tested in the Challenge aren’t as basic as you may think. The Challenge covers everything from understanding taxes and deductions on your paycheck to analyzing the long-term effects of leasing vs. owning an asset. Take a look at this summary of all of the Core Competencies tested and a few sample questions.
Which states had the highest average scores in 2010? It’s actually not who you might expect. Idaho topped the list with an average score of 78.74%, closely followed by South Dakota, Wyoming, Oregon and Utah. Virginia had the highest student participation rate of all states; while Pennsylvania had the highest number of participating schools. You can see more state statistics from 2010 and take a look at how each state fared here. But the Challenge is about more than competition among the states. It’s about empowering young people with the skills and knowledge they need to succeed in an increasingly complicated global financial economy.
The National Financial Capability Challenge sends an important message to us: financial capability is not just for adults. If we really want to increase the long-term financial stability of families, we need to start teaching basic financial concepts – like budgeting, saving, using credit wisely, making smart investments, and understanding the costs and benefits of purchasing insurance – at an early age. The Challenge is just one of the many important steps the Obama administration has taken to promote financial capability among Americans. Recently, the Administration established the President’s Advisory Council on Financial Capability and also unveiled a new National Strategy for Financial Literacy to help coordinate public and private efforts around financial capability.
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