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Inspiring Financial Learning
Youth Financial Literacy Study 2012
Written by
The Brondesbury Group
Toronto, ON
August, 2012
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
TABLE OF CONTENTS
EXECUTIVE SUMMARY
1
1.
INTRODUCTION
4
2.
FINANCIAL BEHAVIOUR & ATTITUDES
6
2.1
2.2
6
9
3.
4.
5.
FINANCIAL BEHAVIOUR
FINANCIAL ATTITUDES
KNOWLEDGE OF PERSONAL FINANCE
14
3.1
3.2
3.3
14
16
18
KNOWLEDGE ABOUT PERSONAL FINANCES
INTEREST IN FINANCIAL TOPICS
METHODS OF LEARNING
PREPARATION FOR THE FUTURE
20
4.1
4.2
20
23
TRENDS IN KNOWLEDGE AND PREPARATION
ARE STUDENTS PREPARED FOR THE FUTURE?
SUMMARY AND CONCLUSIONS
24
APPENDIX A – YOUTH LITERACY SURVEY FORM
26
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
EXECUTIVE SUMMARY
FINANCIAL BEHAVIOUR & ATTITUDES
The Investor Education Fund (IEF) promotes financial literacy among
younger Canadians online through GetSmarterAboutMoney.ca and
through extensive school-based programs that include teacher
training, financial literacy tools for classroom use, and the Funny
Money for High Schools assembly program, co-sponsored nationally
by IEF and the Investment Industry Regulatory Organization of
Canada (IIROC). IEF has been a strong advocate for financial literacy
education in schools for more than a decade, and is currently in the
process of rolling out a new program to support recent Ministry of
Education changes that integrate financial literacy in the Ontario
curriculum from Grades 4-12.
Students earn money from different sources, but allowance and
gifts give way to part-time jobs as a source of money for high school
students as they get older.
This survey is part of IEF’s efforts to prepare future generations to
manage their finances. The study monitors high school students’
financial confidence and behaviour, their preferences for financial
education and identifies those financial topics of the most interest
to students.
This report is based on a 15-minute online survey conducted in June
2012. All 400 respondents are English-speaking secondary school
students in Ontario. Interviews are evenly split between the four
secondary school grades and evenly split by gender. Survey results
have a ’worst case’ error of +5% some 19 out of 20 times. The
survey repeats questions in the 2009 IEF Youth Financial Literacy
Landscape study (IEF, 2009) and allows IEF to assess changes over
the past three years.
Some 9 out of 10 students have at least one financial product. For 7
out of 10, a savings account is the primary financial product, but
almost half have a debit card and one-third have a chequing
account. Just 2 out of 10 are aware of having a Registered
Educational Savings Plan (RESP) for which they are the beneficiary.
Budgeting is mainly just for big items. Clothes, entertainment,
technology and gifts for others top the list for savings. Despite a
great deal of interest in saving for education, only 3 out of 10 are
actively saving for their education.
While personal finances are something that most high school
students only think about occasionally, thinking about personal
finances ‘all the time’ increases from 5% at age 14 to 29% by age 18.
Thinking about personal finances increases steadily over the teen
years.
When high school students need to know about personal finances,
they turn to their parents first. Their parents are the source they
trust most. The Internet is a popular source of information, but high
school students turn to the Internet only about one-third as often as
their parents. Banks and friends follow as sources of information.
Trust levels for anything other than parents are quite low.
For the most part, high school students don’t talk about personal
finances with their friends. Those who say they do talk about
finances are more likely to identify themselves as “advice-givers”
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
1
than as those seeking advice. Those who felt their school provides
most or all of the personal finance information they need are twice
as likely to discuss personal finances compared to high school
students that didn’t feel their school provided them with adequate
information.
KNOWLEDGE OF PERSONAL FINANCE
Self-assessed knowledge about personal finance and managing
money improves markedly between Grades 9 and 10, and then
again in Grade 12. Overall though, the majority of high school
students feel their knowledge could be better. Only one-quarter
say they know about money and make the right spending decisions.
When it comes to knowledge levels and interest in learning about
specific topics, we find that many students are particularly focused
on short to medium-term topics such as saving for school, while a
smaller group focuses on long-term financial issues such as investing
or buying a home. The gap between interest in topics and current
knowledge levels points to a range of topics that are likely to engage
the interest of high school students.
Knowledge and interest levels are highest about the cost of postsecondary education and how to pay for it. This is especially true by
Grade 12. Topics with high interest levels but relatively low levels of
existing knowledge include: buying a car, living costs after
college/university, moving out of home and managing debt.
quite happy to learn by reading books. Other sources are less
popular.
PREPARATION FOR THE FUTURE
Compared to the 2009 study, high school students in 2012 attach
more importance to knowledge of how to manage money and take
care of finances. Some 70% of high school students think it is
important to know about managing personal finances now
compared to 64% in 2009.
In addition, some 69% of high school students now think it is
important that schools teach them about personal finance
compared to 57% in 2009. This is a significant shift.
Only one-quarter of students say that their school provided them
with most/all of the information they needed, an increase since
2009. Satisfaction with the amount of information schools provide is
directly related to students rating themselves as knowledgeable
about personal finances.
While students rank schools higher for providing financial
information since 2009, only 4 out of 10 high school students feel
they are somewhat or very prepared for managing their money
after high school. This proportion has remained constant over the
past three years. The satisfaction with school personal finance
programs has a direct and significant impact on how well students
feel they are prepared for the future.
Students cite websites and school courses as the most common
ways they learn about financial topics, and the majority – two thirds
– also prefer to learn from these sources. Just under half are also
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
2
MAJOR CONCLUSIONS
High school students are getting some experience with money
management through their work, savings and daily activities, but
they need guidance and a focused program in school to make the
most of their experience.
High school students are receptive to learning about financial
matters, especially if the right topics are used to help them learn.
Just as with adults, the topics that are most likely to engage high
school students are those that bear on decisions or situations they
will have to deal with in the short to medium term. When students
reach grade 12, the most compelling topics are the cost of postsecondary education and how to save for it. Buying a car, living
costs after college/university, and managing debt (like student
loans) will also engage their attention as they move through high
school. The essential principle is to make the learning applicable to
decisions that students know they will have to make.
Learning the basics in earlier years is likely to make it easier for
high school students to learn what they need to know, at the time
when they are receptive and eager to learn. Even so, the focus of
financial education in schools should be instilling the skills and
attitudes that lead to good money management, everyday.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
3
1.
are 18 years old. More than 8 out of 10 live in urban settings,
defined as areas with a population of greater than 10,000.
INTRODUCTION
The Investor Education Fund (IEF) promotes financial literacy among
younger Canadians online through GetSmarterAboutMoney.ca and
through extensive school-based programs that include teacher
training, financial literacy tools for classroom use, and the Funny
Money for High Schools assembly program, co-sponsored nationally
by IEF and the Investment Industry Regulatory Organization of
Canada (IIROC). IEF has been a strong advocate for financial literacy
education in schools for more than a decade, and is currently
introducing a new program to support recent Ministry of Education
changes that integrate financial literacy in the Ontario curriculum
from Grades 4-12.
This survey is part of IEF’s efforts to prepare future generations to
manage their finances. The study monitors high school students’
financial confidence and behaviour, their preferences for financial
education and the financial topics of the most interest to this group.
The current study is a repeat of the 2009 IEF Youth Financial Literacy
Landscape study (May 2009). With the exception of some very
modest updates to reflect changes in the past three years, the
survey questions are largely identical. This allows the IEF to track
changes in knowledge, behaviour and attitudes over time.
METHOD
The report is based on a 15-minute online survey conducted in June
2012. All 400 respondents are English-speaking secondary school
students in Ontario. As you can see in Exhibit 1.1, the interviews are
evenly split between the four secondary school grades and evenly
split by gender. All respondents are ages 14-18, although very few
The Brondesbury Group
While not shown graphically, we note that the demographics are
very similar to the 2009 survey, making comparison quite
straightforward.
Survey results have a ‘worst case’ error of +5% some 19 out of 20
times. The actual error in estimates is sometimes smaller than this
but must be independently calculated.
Youth Financial Literacy 2012 – Investor Education Fund
4
Despite the relative lack of demographic differences, we will report
on differences in attitude, behaviour and knowledge among these
psychographic segments.
PSYCHOGRAPHIC SEGMENTS
In addition to demographics, the study also considered
psychographic segments based on responses to a set of 20
consumer attitude questions.
Using a technique called maximum likelihood factor analysis, we
identified three psychographic segments among secondary school
students.
Conscientious Consumers: They are traditional and cautious,
researching things before they buy them and looking for value for
money. They worry about finances and social issues. They
consciously aim to buy from companies that are environmentally
and socially responsible. This group is fairly evenly split by gender,
with a slight male skew (54%).
Trendy Techies: Friends and advertisers both have a big effect on
how this group buys. They like to be on the cutting edge and this
means buying the latest gadgets. They buy things on a whim at
times. They believe it is “important to treat myself on a regular
basis”. This group is fairly evenly split, with a slight male skew (57%).
Stylish Spenders: This group loves to shop and style is very
important to them. This is reflected in their clothing in particular,
since Stylish Spenders believe that what they wear says a lot about
them. This group is predominantly female (7 out of 10).
None of these segments is related to age, grade or where people
live.
The Brondesbury Group
STRUCTURE OF THE REPORT
The report consists of an Executive Summary and five chapters.
1. Introduction
2. Financial Behaviour and Attitudes
3. Knowledge of Personal Finance
4. Preparation for the Future
5. Summary and Conclusions.
Youth Financial Literacy 2012 – Investor Education Fund
5
2.
FINANCIAL BEHAVIOUR & ATTITUDES
HIGHLIGHTS
•
Some 9 out of 10 high school students have at least one
financial product. For 7 out of 10, a savings account is their
primary financial product. Just 2 out of 10 are aware of having a
Registered Educational Savings Plan (RESP).
•
Budgeting is mainly just for big items. Clothes, entertainment,
technology and gifts for others top the list for savings. Only 3
out of 10 are saving for their education.
•
Thinking about personal finances increases steadily over the
teen years. Thinking about personal finances ‘all the time’
increases from 5% at age 14 to 29% by age 18.
•
When students need to know about personal finances, they
turn to their parents first. Students turn to the Internet only
about one-third as often as their parents. Banks and friends
follow as sources of information. Trust levels for anything other
than parents are quite low. For the most part, high school
students just don’t talk about personal finances with their
friends.
•
Those who felt their school provides most or all of the personal
finance information they need are twice as likely to discuss
personal finances compared to high school students that didn’t
feel their school provided them with adequate information
(40% versus 20%).
The Brondesbury Group
2.1
FINANCIAL BEHAVIOUR
Allowance and gifts are the two primary sources of money for high
school students (see Exhibit 2.1), but these give way to part-time
jobs over the teen years. While only 2 out of 10 of Grade 9 students
have a part-time job, this rises to 6 out of 10 by Grade 12. Even by
Grade 10, almost half of high school students have the experience
of earning some of the money they use.
Part-time jobs are much more likely in rural areas than urban,
offsetting the lower incidence of allowance and babysitting
opportunities in rural areas. More males have part-time jobs, while
more females report earning money through babysitting.
Youth Financial Literacy 2012 – Investor Education Fund
6
FINANCIAL PRODUCTS
Some 9 out of 10 high school students have at least one financial
product. The average is about 2.2 products per person. The more
products someone has, the more likely they are to identify
themselves as more knowledgeable about personal finances. Based
on research with adults, that is likely to be the case. Using a
financial product prods interest in learning about it and generally
increases knowledge levels.
Ownership of financial products increases with grade level and age.
Rural high school students are more likely to own at least one
financial product compared to urban high school students. The
Trendy Techies own the fewest financial products, followed by the
Conscientious Consumers and then Stylish Spenders.
Some 7 out of 10 credit card holders pay off the entire amount each
month, while another 2 out of 10 try to do this but sometimes run
short. The remaining 1 out of 10 don’t know about payment
because someone else pays the bill.
Just over 2 out of 10 high school students are aware of having
Registered Educational Savings Plans (RESPs) in their name and
fewer than 1 out of 10 are aware of owning other investments and
debts.
Overall, product ownership is not significantly different from 2009,
although there does appear to be a decline in credit card usage.
For 7 out of 10 high school students, a savings account is the
primary financial product. About half as many have a chequing
account – mostly in the upper grades. More than two-thirds of
those with a chequing or savings account had their first bank
account by the year they entered secondary school.
Given the high rate of account ownership, it is not surprising that
almost half of high school students have a debit card. By contrast,
only 7% of high school students report having a credit card. Both
debit card use and credit card use increase steadily over the years of
secondary school. Between Grade 9 and Grade 12, debit card usage
doubles (32% to 60%). Credit card usage increases from 1% to 12%
over the four years of secondary school. Credit cards are higher
incidence in urban areas, while debit cards are higher incidence in
rural areas.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
7
PERSONAL STYLE
Respondents were asked to self-identify as ‘spenders’ or ‘savers’.
Most people identified themselves as a little of each. The
remainder split evenly between spenders and savers. Trendy
Techies were most likely to self-identify as spenders , followed by
Stylish Spenders. Conscientious Consumers were most likely to selfidentify as savers. More knowledgeable (self-assessed) high school
students were more likely to identify as savers. Demographics
played no role in self-identifying as a saver or spender.
High school students budget at least some of the time. Budgeting is
mainly just for big items. The likelihood of budgeting is not related
to demographics in any way, but high school students who selfidentify as more knowledgeable are more likely to budget. As well,
students who have been shown how to budget are far more likely to
do so.
The Brondesbury Group
Personal finance programs at school make a difference. High school
students who felt their school provides most or all of the personal
finance information they need are twice as likely to ‘always budget’
compared to other high school students (29% versus 15%).
Conversely, the likelihood of not budgeting at all is 42% for those
didn’t feel their school provided them with adequate information
and drops to 18% for those who felt their school provides most of
the information they need.
Clothes, entertainment, technology and gifts for others top the list
of things that high school students save to buy. Nonetheless,
almost 3 out of 10 are also saving for their education. Only a tiny
portion (3%) doesn’t save at all.
Youth Financial Literacy 2012 – Investor Education Fund
8
As one would expect, saving for education is more common in the
upper grades. It is also more common in the Conscientious
Consumers segment (38%) than among Stylish Spenders (28%) or
Trendy Techies (20%). Females are twice as likely to be saving for
education as males (37% versus 18%). Males are about twice as
likely to be saving for a technology purchase as females (62% versus
34%). The same is true for buying a car.
2.2
FINANCIAL ATTITUDES
When high school students hear the words ‘personal finances’ and
‘managing money’, the first things they think of are bank accounts
(35%), saving (22%), and budgeting (18%). And since this question
was asked before any other question about personal finances, the
survey wording did not influence their choice of words. Banks,
savings and budgets are integral to their understanding of personal
finance and money management.
Still, personal finances are something that most high school
students only think about occasionally, if at all. One-third, rarely if
ever, think about their personal finances.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
9
The group that thinks about personal finances ‘all the time’
increases from 5% at age 14 to 29% by age 18. Thinking about
personal finances increases steadily over the high school years.
The Brondesbury Group
SOURCES OF INFORMATION ABOUT PERSONAL FINANCES
When high school students need to know about personal finances,
they turn to their parents first. Their parents are the source they
trust most. The Internet is a popular source of information, but high
school students turn to the Internet only about one-third as often as
their parents. Banks and friends follow as sources of information.
Trust levels for anything other than parents are quite low.
Youth Financial Literacy 2012 – Investor Education Fund
10
For the most part, high school students don’t talk about personal
finances with their friends. Those who say they do talk about
finances are more likely to identify themselves as “advice-givers”
than as those seeking advice. Those who felt their school provides
most or all of the personal finance information they need are twice
as likely to discuss personal finances compared to students that
didn’t feel their school provided them with adequate information
(40% versus 20%).
The Brondesbury Group
CONSUMER ATTITUDES
The psychographic segments we have used are based on a set of 20
consumer attitudes that high school students were asked about.
We have grouped the attitudes by segment to show the dominant
views in each segment. So while Exhibit 2.10a shows the dominant
attitudes in the Conscientious Consumers segment, the percentage
who agree with each of these attitudes will be far higher in the
Conscientious Consumers segment than among others.
Youth Financial Literacy 2012 – Investor Education Fund
11
The four attitudes that best typify Conscientious Consumers (28% of
high school students) are: value-for-money, researching before
buying, dealing with socially responsible companies and buying
practical things.
Exhibit 2.10a Consumer A tudes Conscien ous Consumers
Ge ng value for my money is the
most important thing
11
27
Trendy Techies (38%) are best characterized as people who follow
trends and are readily influenced by others. When looking at the
attitudes that define the Trendy Techies, bear in mind that their
agreement with each statement will be substantially higher than in
the other groups, especially compared to the Conscientious
Consumers segment.
62
I like to research things before I
buy them
18
It’s important to me that
companies are socially
responsible
18
36
46
I’m very prac cal in the things I
buy
17
37
46
I buy products from companies
that are fair to its workers
24
58
21
If it comes down to deciding
between two similar products or
services I’ll always choose the one
that comes from my own country
44
31
I buy products from companies
that are environmentally
responsible
I worry a lot about finances
33
41
38
It’s important that I treat myself on a
regular basis
35
36
26
Exhibit 2.10b Consumer A tudes Trendy Techies
33
30
21
34
28
29
Adver sing has a big effect on what I
buy
26
36
20%
35
32
33
I tend to buy a lot of gadgets
35
33
32
38
31
31
I tend to buy a lot of things on a whim
28
38
60%
80%
20%
The Brondesbury Group
% Neutral
32
40%
60%
30
80%
100%
100%
% Disagree
% Disagree
38
32
38
40%
43
My friends have a strong influence on
what I buy
0%
0%
46
I like to follow trends
I am always on the cu ng edge
I’m very tradi onal in what I buy
33
% Neutral
% Agree
% Agree
Youth Financial Literacy 2012 – Investor Education Fund
12
The Shopper segment (34%) is easiest to understand. They simply
love shopping and the latest styles, especially in clothing. Taking a
prime example, some 9 out of 10 in the Shopper segment agree that
‘Style is very important to me’ compared to 1 out of 3 in the
Conscientious Consumers segment.
Exhibit 2.10c Consumer A tudes Stylish Spender
Stylish Spenders
Style is very important to me
17
25
58
What I wear says a lot about the type
of person I am
18
24
58
I love to shop
21
30
49
Neutral
I don’t like to s ck out in the crowd
26
0%
20%
32
40%
% Disagree
42
60%
% Neutral
80%
100%
% Agree
As we will continue to see throughout the report, consumer
attitudes play a role in financial learning, even if not always in
predictable ways.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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3.
KNOWLEDGE OF PERSONAL FINANCE
HIGHLIGHTS
•
The majority of high school students feel their knowledge of
personal finance and managing money could be better. Only
one-quarter say they know about money and make the right
spending decisions.
•
Many students are particularly focused on learning about things
that will affect them in the short to medium term. The gap
between interest in topics and current knowledge levels points
to a range of topics that are likely to engage the interest of high
school students.
•
•
•
Knowledge and interest levels are highest for the cost of postsecondary education and how to pay for it. This is especially
true by Grade 12.
Despite high levels of interest in saving for/cost of postsecondary education and relatively strong knowledge of the
topic, fewer than one-third of high school students are actually
saving for their post-secondary education.
3.1
SELF-ASSESSED KNOWLEDGE ABOUT PERSONAL FINANCES
Self-assessed knowledge about personal finance and managing
money improves markedly between Grade 9 and Grade 10, and
then again in Grade 12. The proportion of high school students that
say they are knowledgeable about financial matters increases from
42% in Grade 9 to 62% in Grade 12. Conscientious Consumers say
they are knowledgeable (65%) far more than Stylish Spenders (56%)
or Trendy Techies (39%). Compared to savers, those who say they
are spenders are only half as likely to self-identify as knowledgeable
(64% versus 33%).
3.1 Knowledge About Managing Money
(Self-Assessed)
Overall
31
Grade 9
17
45
52
13
42
Grade 10
29
18
53
Grade 11
27
21
52
Grade 12
23
15
Not
knowledgeable
62
Average
Students cite websites and school courses as the most common
ways they learn about financial topics, and the majority – two
thirds – also prefer to learn from these sources. Just under half
are also quite happy to learn by reading books. Other sources
are less popular.
Knowledgeable
Conscien ous
25
Stylish Spenders
30
Trendy Techies
65
13
36
0%
The Brondesbury Group
10
Youth Financial Literacy 2012 – Investor Education Fund
20%
56
25
40%
39
60%
80%
100%
14
Overall, the majority of high school students (55%) feel their
knowledge could be better. Only one-quarter say they know about
money and make the right spending decisions. Only a small group
(5%) identifies their lack of knowledge as a source of stress to them,
and students who described themselves as Spenders make up most
of this group. The lack of stress suggests that eliminating stress or
worries is not an effective motivation for high school students to
learn more about money management.
When we go into greater depth and ask high school students about
their knowledge of specific topics, we find that knowledge is often
driven by the need to make decisions in the short-to-medium term,
just as it is with adults. Those who say they’re knowledgeable about
long-term issues are a specific subset.
Self-assessed knowledge levels are highest about saving for postsecondary education and what it will cost. Half are knowledgeable
about these issues. Other issues are less compelling and it is our
sense that knowledge reflects judgments of personal relevance.
Many issues that are considered “basics of personal finance” have
very low knowledge levels. The last eight items in the list of topics
are all deemed “low knowledge” by at least half of high school
students.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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3.2
INTEREST IN FINANCIAL TOPICS
There is a relationship between topics that high school students
know more about and topics that interest them, but there are
differences between the two. Post-secondary education is a focal
point for high school student interests. Buying a car and managing
life after post-secondary education are also big issues. It is our
sense that the interest in topics reflects the immediacy of needing
or wanting to deal with them.
The gap between interest in topics and current knowledge levels
points to a range of topics that are likely to engage the interest of
high school students (see Exhibit 3.5).
Knowledge and interest levels are highest for the cost of postsecondary education and how to save for it. This is especially true
by Grade 12. Topics with high interest levels but relatively low
levels of existing knowledge include: buying a car, living costs after
college/university, moving out of home and managing debt.
Typically, gaps between knowledge and interest indicate learning
opportunities. Looking just at high levels of interest and knowledge,
we find gaps of 25% or more for:
• Living cost after college/university (31%);
• Buying a car (33%);
• Saving to move out from home (29%);
• Investing money safely (25%); and
• Building a financial plan (25%).
Regardless of gap size, it is safe to assume that short-to-medium
term topics are more likely to encourage high school students to
learn about managing money than long-term issues. Immediacy
plays a key role in motivating both adults and high school students.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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Exhibit 3.5 Self-Assessed Knowledge versus Interests
(% Top Box)
Short-Medium Term
Cost of college/university w/living exp
Saving for educa on
Saving and managing debt
Living cost a er college/university
Buying a car
Saving to move out from home
54
67
49
63
36
33
32
29
55
64
65
58
32
Managing credit card spending and debt
Knowledge
52
Interest
Long-Term
How to start inves ng
The me value of money
Inves ng money safely
Type of investments
How the stock market works
Buying a home
Saving for re rement
Investment risk and return
Building a financial plan
How to work with a financial advisor
33
30
28
23
22
22
21
20
19
14
0
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
20
50
44
53
40
37
44
35
39
44
33
40
60
80
17
CONCERNS FOR THE FUTURE
3.3
Supporting the interest in topics, especially post-secondary
education, we look at high school students’ biggest concerns for the
future. As we can see, college/university education tops the list.
Websites and school courses are the most common ways that high
school students learn about managing money and building personal
finance skills. Both are identified as methods that were used in the
past by half of high school students. TV and books are methods
used by about one-third of high school students, while other
methods are used by less than one-quarter.
Finding a job is the next biggest concern, and while that isn’t directly
a financial topic, looking back at Exhibit 3.5 we can see that many of
the topics of highest interest reflect a need to understand and
manage the cost of living after completing education and entering
the job market. As previous IEF research has shown, paying for
education and the transition to the workforce is the dominant
concern of people in their early 20s. High school students appear to
know what is coming next.
The Brondesbury Group
METHODS OF LEARNING
Youth Financial Literacy 2012 – Investor Education Fund
18
In general, the importance of media for learning is relatively
constant throughout the teen years. The one notable exception is
websites, which increase in usage from 46% to 61% from Grade 9 to
Grade 12. Those who consider themselves to be the most
knowledgeable use websites more, perhaps being part of what
helps them to improve their knowledge. We also note that females
make more use of print sources than males. This includes
discussion boards, blogs and online forum.
Students cite websites and school courses as the most common
ways they learn about financial topics, and the majority – two thirds
– also prefer to learn from these sources. Just under half also learn
by reading books. Other sources are less popular.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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4.
4.1
PREPARATION FOR THE FUTURE
HIGHLIGHTS
•
Compared to the 2009 study, high school students in 2012
attach more importance to knowledge of how to manage
money and take care of finances. Some 70% of high school
students think it is important to know about managing personal
finances now compared to 64% in 2009.
•
The importance of schools for providing the information and
skills needed to manage personal finances better has also grown
over the past three years. Some 69% of high school students
now think it is important that schools teach them about
personal finance compared to 57% in 2009. This is a significant
shift.
•
Only one-quarter of students say that their school provided
them with most/all of the information they needed, an increase
since 2009. Satisfaction with the amount of information schools
provide is directly related to students rating themselves as
knowledgeable about personal finances.
•
While students rank schools higher than in 2009 for providing
needed personal finance information, only 4 out of 10 high
school students feel they are somewhat or very prepared for
managing their money after high school. This proportion has
remained constant over the past three years.
•
Students’ satisfaction with school personal finance programs
has a direct and significant impact on how well students feel
they are prepared for the future.
The Brondesbury Group
TRENDS IN KNOWLEDGE AND PREPARATION
Compared to the 2009 study, high school students in 2012 attach
more importance to knowledge of how to manage money and take
care of finances. Some 70% of high school students think it is
important to know about managing personal finances now
compared to 64% in 2009. This does not differ much by either age
or grade.
Youth Financial Literacy 2012 – Investor Education Fund
20
The importance of schools for providing the information and skills
needed to manage personal finances better has also grown over the
past three years. Some 69% of high school students now think it is
important that schools teach them about personal finance
compared to 57% in 2009. This is a significant shift. It is worth
noting that this view covers virtually all groups of high school
students. There are no demographic differences in the importance
of the school’s role in helping to learn about managing money.
The Brondesbury Group
HOW WELL ARE SCHOOLS DOING?
While students rank schools higher than in 2009 for providing
needed personal finance information, only one-quarter say that
their school provided them with most/all of the information they
needed. Satisfaction with the amount of information schools
provide is directly related to high school students rating themselves
as knowledgeable about personal finances.
Youth Financial Literacy 2012 – Investor Education Fund
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As in 2009, only 5% of students currently believe that their school
provided them with all of the information they need. The big shift is
the move from 12% to 21% who say that their school provides them
with most of the information they need. Despite these gains, we
note that almost half of students indicate that their schools provide
a bare minimum of information (26%) or no information at all (21%).
The deficit in learning that is perceived by these students is
independent of age, grade, gender of psychographic segment.
What we do note is that those who don’t feel they’re getting
adequate personal finance information in school are far more likely
to assess themselves as “Not knowledgeable” than those who rank
their schools high for providing the personal finance information
they need. At the extremes, the difference is as big as 42% versus
5%. Conversely, high school students are less than half as likely to
consider themselves knowledgeable about financial matters if they
rank their school poorly for providing personal finance information
school program, especially compared to those who rank their
schools high in this area (38% versus 86%). In short, the perceived
extent or quality of school programs has a visible impact on high
school students’ knowledge of financial matters.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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4.2
ARE STUDENTS PREPARED FOR THE FUTURE?
While students rank schools higher than in 2009 for providing
needed personal finance information, only 4 out of 10 high school
students feel they are somewhat or very prepared for managing
their money after high school. This proportion has remained
constant over the past three years.
Some 4 out of 10 also consider themselves somewhat unprepared
or not very prepared. It is notable that the proportion saying they
are not very prepared has increased.
Students’ satisfaction with school personal finance programs has a
direct and significant impact on how well students feel they are
prepared for the future. Of those students that ranked their schools
low in this area, only 1% consider themselves very prepared while
32% say they are not very prepared. By comparison, school
programs that students felt imparted most/all of what they need to
know left only 5% not very prepared and 14% very prepared.
Looking at the top two categories of preparedness, the school
program satisfaction moves preparedness from 28% to 61%. School
programs clearly have an impact.
Exhibit 4.6 Student Personal Finance Prepara on
versus Amount of Informa on Provided in Schools
None/Minimal
32
21
19
27
1
Amount of
Informa on
from School
Okay
Most/All
14
5
0%
25
16
27
18
20%
30
47
40%
60%
4
14
80%
100%
Not very prepared
Somewhat unprepared
Neither prepared nor unprepared
Somewhat prepared
Very prepared
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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5.
SUMMARY & CONCLUSIONS
By the end of secondary school, the vast majority of students have
earned money of their own through part-time jobs. Their
experience gives them a personal understanding of the value of
money, even if some of their money comes from their parents.
High school students also typically get experience with a few
financial products. Savings and chequing accounts are a base and
debit cards are quite common. There are a smattering of other
products used less widely. Students who view themselves as
financially knowledgeable use more financial products than those
students who consider themselves less knowledgeable. Assuming
this works in the same way as with adults, getting a product prods
people into learning more about what they have through reading
and experience.
High school students also show the beginnings of fiscal
responsibility. Even if only 2 out of 10 budget all the time, many
more will budget for big items. They are far more likely to budget if
someone shows them how to make a budget. Personal finance
programs at school have a big impact.
As students move through high school, they come to increasingly
realize the importance of knowing about managing money and
personal finances. Grade 12 students, as they are gradually
confronted with the economic realities of post-secondary education
become particularly aware they need to know more about
managing money.
Just as with adults, the topics that are most likely to engage high
school students are those that bear on decisions or situations they
will have to deal with in the short-to-medium term. The most
The Brondesbury Group
compelling topics are the cost of post-secondary education and how
to pay for it. Buying a car, living costs after college/university, and
managing debt (like student loans) will also engage their attention
as they move through Grade 12. The essential principle is to make
the learning applicable to decisions that high school students know
they will have to make.
When high school students have a question about personal finance,
they turn to (and trust) their parents first. When they want to learn
about managing money and building personal finance skills,
however, they commonly turn to websites and school programs.
School programs have a significant impact on the self-assessed
financial knowledge of high school students.
As it stands, only one quarter of high school students feel they know
enough and make the right decisions. Most recognize they could do
better.
Compared to three years ago, personal finances are viewed as more
important. The school’s role in providing the information that
students need about managing money and personal finances is also
viewed as more important. More than two -thirds of high school
students feel their schools need to teach them about personal
finance, but only one-quarter find their school provides a program
that teaches them what they need to know. When schools do
provide such a program, it gives students a strong sense of being
better prepared to meet the financial challenges of their future.
In summary, we find that high school students are getting some
experience with money management through their work, savings
and daily activities, but they need guidance and a focused program
in school to make the most of their experience.
Youth Financial Literacy 2012 – Investor Education Fund
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Learning the basics in earlier years is likely to make it easier for
high school students to learn what they need to know, at the time
when they are receptive and eager to learn. Even so, the focus of
financial education in schools should be instilling the skills and
attitudes that lead to good money management, everyday.
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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APPENDIX A – YOUTH LITERACY SURVEY FORM
Quebec
New Brunswick
Nova Scotia
PEI
Newfoundland
Yukon, Northwest Territories,
or Nunavut
I do not live in Canada
Introduction
DEMOGRAPHICS
Thank you for taking our survey, please let’s begin…
First off, could you tell us a bit about yourself?
1.
How old are you? DROP DOWN LIST
13 and
under
14
15
16
17
18
19 and
over
2.
THANKS &
TERMINATE
THANKS & TERMINATE
3.
Do you live in an urban or rural area?
Urban (a large town or city OR the built up areas that
surround these)
Rural (any settlement, village, town or county with a
population of less than 10,000)
THANKS & TERMINATE
4.
Which Canadian province or territory do you
currently live in? DROP DOWN LIST
British Columbia
Alberta
THANKS &
TERMINATE
Saskatchewan
Manitoba
Ontario
Continue
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Please tell us what grade you are currently in. Drop
down list
Grade 9
Grade 10
Grade 11
Grade 12
I’m not in
high school
Youth Financial Literacy 2012 – Investor Education Fund
THANKS & TERMINATE
26
8.
5.
What is your gender?
Female
Male
6.
Please indicate of all the ways in which you have
earned or received money in the past 3 months.
1
Part time job
Multiple
select
2
Full time job
3
Allowance
4
Baby Sitting
5
Gifts
6
Other - Specify
1
2
3
4
5
9.
Section 1 – Financial Behaviour/Literacy
We’re going to start by asking you questions about finance
and money in your life. Remember all your responses are
kept confidential, so please be honest and open when
answering.
7.
Please tell us the first thing that comes to mind
when you hear “personal finances and managing
money?”
Please rate your overall level of knowledge when it
comes to managing money (i.e., understanding how
to budget, make informed financial decisions, etc.).
Please use the following scale where “1” means
‘you are not at all knowledgeable’ and “5” means
‘you are extremely knowledgeable’
1 – Not at all knowledgeable
2 – Somewhat unknowledgeable
3 – Neither knowledgeable nor
unknowledgeable
4 – Somewhat knowledgeable
5 – Extremely knowledgeable
How would you describe your personal finance
skills?
1
2
3
4
I’m knowledgeable about money and make
the right decisions when it comes to
spending it
I could be better about dealing with money
I know I’m not very good with my money, but
I’m okay with that
I know I‘m not very good with money and it
can be a source of stress to me
Verbatim
The Brondesbury Group
Youth Financial Literacy 2012 – Investor Education Fund
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10.
What financial products do you currently have?
(please check all that apply)
1
2
3
4
5
6
7
8
9
10
11
12
13
12.
Savings Account
Chequing Account
Student Line of Credit/Student
loan
Car Loan
Registered Retirement Savings
Plan (RRSP)
Credit Card
Which statement best describes your repayment of
your credit cards?
1 I pay off the entire amount each month
2 I try to always pay them off completely each
month, but sometimes I run a little short
3 I pay just the minimum amount each month
4 I’m behind in my payments
5 I have collection agencies calling me
6 Someone else pays the bill
If Option 1 or 2 is chosen in question Q10 ask
Mutual Funds or Stocks
Canada Savings Bonds and/or
Ontario Savings Bonds
Term Deposits and/or Guaranteed
Investment Certificates
Tax Free Savings Account
Registered Education Savings Plan
(RESP)
Debit Card
None of the above
13.
If you can remember, please tell us how old you
were when you got your first bank account? Enter
your age here:
Numeric response
All Respondents
EXCLUSIVE
14.
Thinking about your general behavior and attitude
towards money, what statement best describes
you?
If Option 6 is chosen in Q10 (credit card)
11.
1
2
3
4
How many credit cards do you currently have access
to (i.e., pre-paid, co-card with parents, etc.))?
(verbatim – numeric response only)
15.
The Brondesbury Group
I’m a saver
I’m a spender
I’m a little of both (saver and spender)
I’m neither
Please explain your answer.
Verbatim
Youth Financial Literacy 2012 – Investor Education Fund
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Section 1b – Financial Education
18.
Now we’re going to ask you questions about education and
finances as it relates to you personally.
16.
When it comes to your personal finances, please
choose the statement that best describes you:
Please rate your school on how well it provides you
with the information and skills needed to help you
learn more about managing your personal finances.
Please use the following scale where “1” means not
very well and “5” means very extremely well.
1
1
2
3
17.
I rarely think about my
personal finances.
I think about my
personal finances from
time to time.
I think about my
personal finances all the
time.
2
3
4
5
Thinking about your life today, how important is it
for you to be aware of how to manage money and
know how to take care of finances? Please use the
following scale where “1” Not at all important and
“5” means Extremely important.
19.
1
2
3
4
5
1 - Not at all important
2 - Somewhat
unimportant
3- Neither important nor
unimportant
4- Somewhat important
5- Extremely important
The Brondesbury Group
1 – Not at all well – no
information is provided
2 – They do the bare
minimum – very little
information is provided
3 – They’re ok – provided
some information
4 – Somewhat well –
provided most of the
information I needed
5 – Extremely well –
provided all the
information I needed
And how important is it that your school provides
you with information and skills to help you become
knowledgeable in personal finances (i.e., provide
instruction and resources on money management,
budgeting and investing)?
1
2
1 - It’s not very important
2 - Somewhat unimportant
Youth Financial Literacy 2012 – Investor Education Fund
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3
4
5
20.
3 – Neither important nor unimportant
4 - Somewhat important
5 - It’s very important
If you have questions or are looking for information
on money management and financial planning,
where do you turn?
1
2
3
4
5
6
My parents
My brothers or sisters
A teacher
Friends
The internet
A Bank/Other Financial
Institution
7 Somewhere else?
Verbatim
(please specify)
8 I wouldn’t … I don’t
Exclusive
think about money
Multichoice
21.
Please tell us which one is your most trusted source
for information about money management and
financial planning?
1
2
3
4
My parents
My brothers or sisters
A teacher
Friends
The Brondesbury Group
5
6
The internet
A Bank/Other Financial
Institution
7 Somewhere else?
(please specify)
Forced choice
22.
Have you ever been shown how to create a budget?
1
2
23.
Yes
No
Thinking about budgeting, please indicate which of
the following statements best describes you:
1
2
3
24.
Pipe in from
Option 7
I always budget my money
I budget for bigger ticket items like events,
vacations, gifts etc.
I don’t budget my money
Please tell us which statement best describes you
when it comes to talking with your friends about
money and finances.
1
2
3
Youth Financial Literacy 2012 – Investor Education Fund
I give more advice about finances to
my friends than they can give me
My friends give me more advice on
finances than I can give them
My friends and I do not talk about
money and finances
30
Forced Choice
9
Saving to move out
from home
10 Buying a car
11 Investing money
safely
12 How to work with a
financial advisor
13 Investment risk and
return
14 The time value of
money (compound
interest)
15 Managing credit card
spending and debt
16 How much it will cost
to go to
college/university
including living
expenses
17 How much it costs to
live on your own
after you are done
with education
Randomize
TO ALL
25.
And thinking about more specific financial topics,
please rate your level of knowledge on the
following (using the following scale where “1”
means ‘you are not at all knowledgeable’ and “5”
means ‘you are extremely knowledgeable’).
1
2
3
4
5
6
7
8
Saving for retirement
Building a financial
plan
Saving for education
Saving and managing
debt
How to start
investing (writing
goals/ putting money
aside/ investment
knowledge)
How the stock
market works
Type of investments (
stocks, bonds,
mutual funds, GICs)
Buying a home
The Brondesbury Group
1 – Not at all
knowledgeable
2 – Somewhat
unknowledgeable
3 – Neither
knowledgeable nor
unknowledgeable
4 – Somewhat
knowledgeable
5 – Extremely
knowledgeable
26.
Thinking about the different topics as they relate to
becoming more knowledgeable about managing
your money, please indicate how interested you are
in learning more about the following (using the
Youth Financial Literacy 2012 – Investor Education Fund
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following scale where "1" means 'not at all
interested' and "5" means 'very interested').
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Saving for retirement
Building a financial
plan
Saving for education
Saving and managing
debt
How to start investing
(writing goals/ putting
money aside/
investment knowledge)
How the stock market
works
Type of investments (
stocks, bonds, mutual
funds, GICs)
Buying a home
Saving to move out
from home
Buying a car
Investing money safely
How to work with a
financial advisor
Investment risk and
return
The time value of
money (compound
interest)
The Brondesbury Group
15
Managing credit card
spending and debt
16 How much it will cost
to go to
college/university
including living
expenses
17 How much it costs to
live on your own after
you are done with
education
19 Other – please specify
(asked to those rated 4
or 5)
Randomize List
1 – Not at all
interested
2 – Somewhat
uninterested
3 – Neither
interested nor
uninterested
4 – Somewhat
interested
5 – Very
interested
27.
Verbatim
Thinking about the various sources you could
possibly use to learn more about managing money
and improving your personal finance skills, please
indicate which of the following if any, you have
relied on in the past.
1
2
3
4
5
6
7
8
Pamphlets
Magazines
Email
Podcasts
Website
School course
School assembly
Newspaper
Youth Financial Literacy 2012 – Investor Education Fund
Multiple choice
32
9
10
11
12
19
TV
Radio
Books
Discussion boards,
blogs, online forum
Other - please specify
10
Radio
11
12
Books
Discussion boards,
blogs, online forum
Other - please specify
(asked to those rated
4 or 5)
Verbatim
Randomize List
28.
What would be the best way for you to find out
about managing money and personal finances?
Please use the following 1 to 5 scale, where 1 means
you would never use this and 5 means that you
would totally use this.
1
2
3
4
5
6
7
8
9
Pamphlets
Magazines
Email
Podcasts
Website
School course
School assembly
Newspaper
TV
Matrix 1= This is
the worst way for
me, I would never
use this to find out
more 2 = I
wouldn’t really use
this to find out
more 3= I might
and I might not
19
Verbatim
Randomize List
Section 1c – Short-term Future
29.
What are the top 3 things you usually save for? (select top 3)
1 Vacation
2
3
4
5
6
7
8
9
The Brondesbury Group
use this to find out
more 4 = I would
use this to find out
more 5= This is the
best way for me, I
would totally use
this to find out
more.
Clothes
Entertainment (ie: concerts, etc.)
Contribute to an RRSP
Technology purchase (ie: computer, PDA, MP3 or DVD
player, etc.)
Investments
Pay for my education
Gifts for others
Pay off credit card or other debt
Youth Financial Literacy 2012 – Investor Education Fund
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10
11
12
13
14
30.
Buy a house/condo
Take a big trip (i.e. backpacking for a year, volunteering
overseas)
Buy a car
Other (please specify)
I don’t save
What would you say is your biggest concern for
your financial future?
(verbatim – please be specific)
3
4
5
6
7
8
9
10
31.
On a scale of 1 to 5, how prepared are you for
managing your own money after high school?
1
2
3
4
5
32.
1 - Not very prepared
2 - Somewhat unprepared
3- Neither prepared nor unprepared
4 - Somewhat prepared
5 - Very prepared
How would you describe yourself as a consumer?
Please let us know how much you agree or disagree
with each of the following statements on a scale of
1 to 5 where “1” means you completely disagree
with the statement and “5” means you completely
agree with the statement.
1
2
I am always on the cutting edge
I don’t like to stick out in the crowd
The Brondesbury Group
11
12
13
14
15
16
17
18
19
20
Style is very important to me
I worry a lot about finances
I like to research things before I buy them
I’m very traditional in what I buy
I love to shop
Getting value for my money is the most
important thing
It’s important to me that companies are socially
responsible
What I wear says a lot about the type of person I
am
My friends have a strong influence on what I buy
If it comes down to deciding between two
similar products or services I’ll always choose
the one that comes from my own country first
Advertising has a big effect on what I buy
I like to follow trends
I buy products from companies that are fair to
its workers
I tend to buy a lot of gadgets
I’m very practical in the things I buy
It’s important that I treat myself on a regular
basis
I tend to buy a lot of things on a whim
I buy products from companies that are
environmentally responsible
Close and thanks
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