College Student's Knowledge of Personal Finance - NCEE

8/9/2019 College Student's Knowledge of Personal Finance - NCEE

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College Students ConsumerCollege Students Consumer

KnowledgeKnowledgeNCEE/NAEE/GATE National ConferenceNCEE/NAEE/GATE National Conference

Denver, ColoradoDenver, Colorado

October 5, 2007October 5, 2007

Greg Valentine, DirectorGreg Valentine, Director Center for Economic EducationCenter for Economic Education

Katherine Sauer, Assistant ProfessorKatherine Sauer, Assistant Professor EconomicsEconomics

University of Southern IndianaUniversity of Southern Indiana

Evansville, IN 47712Evansville, IN 47712

[email protected]@usi.edu 812.465.1610812.465.1610

[email protected]@usi.edu 812.465.7034812.465.7034


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Previous SurveyPrevious Survey

1993

Consumer Federation of America &

American Express Travel Related Services

Administered - Princeton Survey Research Assoc.

2,010 Jr.& Sr. at 75 four-year colleges and universities Public, Private, and HBC


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Current SurveyCurrent Survey

2006-2007 (fall, spring, fall)

University of Southern Indiana

Personal Finance ClassPre-Test

N = 234

104 -- Males

130 -- Females


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Breakdown ofBreakdown of Question CategoriesQuestion Categories

Credit Card 14 Questions

Auto Insurance 6 Questions

Checking/Saving 6 Questions

Life Insurance 12 Questions

Housing 6 Questions


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Overall ResultsOverall Results

1994

Overall Score --- 51%

Credit Cards 53%

Auto Insurance 58%

Checking/Saving 53%

Life Insurance 43%

Housing 48%

2007

Overall Score --- 55%

Credit Cards 52%

Auto Insurance 51%

Checking/Saving 54%Life Insurance 48%

Housing 69%


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Characteristics of the SampleCharacteristics of the Sample

Age n

percent of

sample

18 - 22 186 79.5%

23 - 29 34 14.5%

30 - 39 9 3.8%

40 and up 5 2.1%


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Gender n

percent of

sample

Male 104 44.4%

Female 130 55.6%


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Ethnicity n

percent of

sample

Caucasian 219 93.6%

African Am. 9 3.8%

Hispanic 4 1.7%

Other 2 0.9%


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Marital Status n

percent of

sample

Not married 168 71.8%

Married 35 15.0%

Divorced 31 13.2%


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Hours Worked npercent of

sample

0 hours 82 35.0%

1-5 hours 7 3.0%6-10 hours 25 10.7%

11-20 hours 42 17.9%

21-30 hours 42 17.9%

31- 40 hours 24 10.3%

over40 hours 12 5.1%


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Number ofCredit Cards n

percent ofsample

None 92 39.3%

One 70 29.9%

Two 45 19.2%

Three10

4.3%

Four 6 2.6%

Five 5 2.1%

Six 6 2.6%


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Checking Account n

percent of

sample

Yes 221 94.4%

No 13 5.6%

Savings Account

Yes 174 74.4%

No 60 25.6%


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Major npercent of

sample

Business 154 65.8%

Education 11 4.7%Health

Professions 14 6.0%

Engineering 73.0

%

Liberal Arts 14 6.0%

Undecided 34 14.5%


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Overall Scores (Average Score)Overall Scores (Average Score)

Age

n percent difference

correct

18-22 186 52.11%

23 and older 48 58.71%

-0.0660**


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Overall Scores (Average ScoreOverall Scores (Average Score))

Gender


correct

Male 104 53.21%

Female 130 53.57%

-0.0046


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Workingn percent difference

correct

Not Working 82 5 1.50%

Working 152 54.33%

-0.0303**


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Overall Scores (Average ScoreOverall Scores (Average Score))

Credit Cards


correct

none 92 52.88%

1 or more 142 53.84%

-0.0095


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Car Insurance


correct

Other Pays 126 51.75%

Pay Own 100 56.03%

0.0428**


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Major


correct

Business 154 52.94%

Non-Business 80 54.49%

-0.0155


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Other SignificantOther Significant FindingsFindings

CreditCredit

n avg. score difference

Age

18-22 186 50.96% -0.0737**

23 and over 48 58.33%

Working

Not Working 82 50.00 % -0.0380**

Working 152 53.80%

Car Insurance

Others Pay 126 51.08% -0.0335**

Pay Own 100 54.43%


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Auto InsuranceAuto Insurance


Age

18-22 186 48.92% -0.1046**23 and older 48 59.38%

Gender

Males 104 45.35% -0.1029**

Females 130 55.64%


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Auto Insurance cont.Auto Insurance cont.


Car Insurance

Others Pay 126 48.81% -0.0636**

Pay Own 100 55.17%

Major

Business 154 53.57% 0.0732**

Other 80 46.25%


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Checking/Savings AccountsChecking/Savings Accounts


Gender

Males 104 60.26% 0.1193**

Females 130 48.33%

Car Insurance

Other Pay 126 56.88% 0.0705**

Pay Own 100 49.83%


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Life InsuranceLife Insurance

n avg. score differenceAge

18-22 186 45.97% -0.0941**

23 and over 48 55.38%

Car Insurance

Other Pays 126 43.32% -0.1068**

Pay Own 100 54.00%

MajorBusiness 154 44.81% -0.0904**

Other 80 53.85%


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High Score QuestionsHigh Score Questions in Each Sectionin Each Section

Credit97.4% knew that the MOST important factorsthat lenders use in deciding whether to approve a loanare the bill-paying record and income

Auto Insurance 69.2% knew that if a car is stolen,that the type of insurance coverage that pays for itsreplacement is Comprehensive

Checking/Saving Accounts 82.1% knew that in orderto avoid all regular fees on a checking account, theaccount holder usually MUST keep a minimumbalance in the account at all times.


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High Score Questions inHigh Score Questions in Each SectionEach Section

Life Insurance 87.6% knew that the beneficiary

named in a life insurance policy is the person to

whom the policy value will be paid

Housing Rental 87.2% knew that a landlord is not

responsible for providing electronic security

systems.


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Low Score Questions inLow Score Questions in Each SectionEach Section

Credit Only 12.4% of the students knew that if theowner of a credit card that is lost or stolen is legallyresponsible foronly the first $50 of anyunauthorized charges.

Auto Insurance Only 13.2% of the students knewthat auto insurance prices offered by different

insurance companies to people who live in the samearea, have the same accident history, and drive thesame type of auto can vary by as much as 100% ormore.


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Low Score Questions inLow Score Questions in Each SectionEach Section

Checking/Saving Account Only 29.5% of thestudents knew that when a check bounces both thecheck writer and the person to whom the check iswritten is usually charged a fee.

Life Insurance Only 16.7% of the students knew thata policy loan is NOT available on term lifeinsurance policies.

Housing Rental Only 35.5% of the students knewthat in most areas of the United States, a landlordmust go to court in order to evict a tenant.


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Documents

College Student's Knowledge of Personal Finance - NCEE