Charles Rex Arbogast
The junior board of directors at the Ariel Community Academy in Chicago meet Tuesday, Feb. 12, 2008, to discuss their class holdings. This one-of-a-kind public elementary school, established in 1996 by the Chicago-based money management firm Ariel Capital Management, promotes financial literacy and gives kid money to invest.
Sara works full-time at the Big Save store and earns $2500 a month. Who pays the contributions to Social Security on the $2,500 a month that Sara earns?
The answer is both Sara and her employer, but if Sara is 20-something, it’s entirely possible she won’t know that. The Treasury Department and the Department of Education have tested graduating high school students over the past three years with versions of this question on a 40-question exam called the National Financial Capability Challenge, and the statistics they’ve collected are not pretty – the average score has been 70 percent, with last year’s average dropping to 69 percent.
Millennials, or 20-somethings, also hold higher-than-average debt and have higher-than-average unemployment.
Is the trend indicative of long-term damage to just a generation, or an entire economy? How can this be corrected?
Beth Kobliner, a member of the President’s Advisory Council on Financial Capability and author of the bestselling book “Get a Financial Life”