WASHINGTON-Parents continue to be the most important factor in developing good financial habits, and that isn't always a good thing, a new survey has found. The National Foundation for Credit Counseling's (NFCC) 2011 Financial Literacy Survey found that 42% of those surveyed indicated that they learned the most about personal finance from their parents.
"At first glance, this appears to be a good thing, as the home should be the ideal place for children to learn skills and habits," NFCC said. "However, the same survey also revealed that 41% of adults gave themselves a grade of C, D or F regarding their knowledge of personal finance. This is a disturbing decline in financial literacy, as one short year ago 'only' 34% of Americans gave themselves a low grade."
In addition, the study found that 5% of U.S. adults, or about 11.5 million people, indicated that the failing grade of F best represented them, marking a sharp increase from previous years when less than 3% of adults self-identified at that level, according to the NFCC. "Taken together, these results suggest that many parents are ill-prepared to teach their children sound financial principles," NFCC said.
Interestingly, noted the survey's authors, the survey showed that while Caucasian and Hispanic adults are more likely to identify the home as the primary learning ground for personal finance, African-Americans are more than twice as likely as Caucasians to garner such information from self-help books, the media or friends. Men were more than four times as likely as women to give themselves failing grades for their knowledge of personal finance, 8% vs. 2%, respectively.
