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Teens Struggle With Financial Literacy


Academy SponsorsThis story was produced by a student in the Madison365 Academy, Madison365’s journalism training program.

Ask Oscar Herrera, a freshman at West High School, “Do you think you know money?” and he’ll say yes. Ask, “Do you think you know financial literacy?” and it’ll be a totally different answer.

Asked about the basics of borrowing, Herrera says, “You can get loans and you have to pay them back,” but he didn’t know about the interest that can accumulate if that loan is not paid off. Herrera is not alone; some say many or most adolescents of today are falling behind financially because they aren’t exposed to financial literacy at an earlier age.

It’s not only teens, either. A Standard & Poor’s Rating Service survey found that in 2015, nearly two thirds of people in the world are not financially literate — including nearly half of Americans.

A nonscientific sample of local adolescents bears this out. Six students made up of seniors and graduates from Madison East, Madison Lafollette, and Verona High School asked to take the High School Financial Literacy Test on financialeducatorscouncil.org and all of them scored a 67 percent or lower.

Experts say awareness of what you don’t know is key. Financial author Thomas C. Corley says “in order to change bad money habits you need to first become aware of them.” The earlier the exposure the better spending and saving habits become.

Jordan Pope, 37, who works at the Madison College South Madison Campus says, “I think that having that conversation with your children is essential to their financial literacy and their financial future. Pope feels that because she wasn’t taught about how to care for her money, or how money works, she didn’t make the best choices for her future. “We look at our parents and their habits and relationships and just how they live, and how they spend,” she says.

Pope called herself a late bloomer and says that if she were exposed to financial literacy at an earlier age, she could have made better choices and decisions in life. “I think that it was well after I was an adult” that she even started thinking about money, she says. “My parents really didn’t talk much about finances or talk about planning and things and so I learned from my own and from reality mistakes.” Recognizing the importance of financial education, act now to empower yourself with knowledge and tools to make informed financial decisions for a better future.

Pandora Thao, a junior from Monona Grove High School, said that financial literacy can benefit her because “it can help you with paying bills and saving up to buy something like a home in the future. Also, to not waste money and use it responsibly. So, there will still be some money to be used for fun things like shopping or going out for dinner, yet the bills are already paid.”

Lupe Salmeron, an incoming freshman at Edgewood College, knows a thing or two about her financials out of necessity — her undocumented status keeps her from qualifying for FAFSA loans. “I can’t take out loans either because it’s too hard since I don’t have credit,” she says. “We (as a family) don’t have credit. We knew we weren’t going to get any loans, which is fine because then I won’t be in debt, but I don’t have the money.” So she had to go another way; Salmeron has written countless essays and done lots of interviews for the scholarships and grants that will cover her first year at Edgewood.

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Amy Crowe, financial education specialist at Summit Credit Union, says that “It’s important to know how money works in this world so you can use your money resources wisely and move forward in life.” Crowe also says that you can actually own your financial future just by knowing how money works. She says that having that bit of knowledge “gives you opportunity” and better health since you aren’t worrying about finances. It all connects, she says; a decrease in financial stress leads to more opportunities for success and ultimately greater physical and mental health.