Student Money Iqs Dismal

Why are financial advisers encouraging first-time workers to learn how to save their money? Well, in a 40-minute, multiple-choice examination administered in March and April by Marquette University, 1,509 soon-to-graduate seniors on average answered correctly only 57 percent of 31 questions. That’s an “F” based on a typical high-school grading scale.

Among the survey’s findings:

Only 32 percent knew they might have to pay income tax on savings account interest, though 72 percent had a savings or checking account.

62 percent said they would have no liability if their credit card was stolen and a thief ran up a $1,000 bill. (Liability is limited to $50 after the credit-card issuer is notified.) Twenty-nine percent used a credit card, either theirs or their parents’.

Only 14 percent correctly said stocks likely would offer the highest growth over 18 years of saving for a child’s education. But 85 percent said a U.S. savings bond or a savings account would offer the highest growth.

51 percent mistakenly said a bank certificate of deposit is not protected by the government, and 18 percent thought U.S. savings and treasury bonds are unprotected.

30 percent thought retirement income received from a company was called Social Security.