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Survey Reveals Gender Gap in High School Seniors’ Financial Literacy?

Or maybe not. Capital One conducted a survey of high school seniors to determine how many of these young adults are prepared to handle finances on their own. The company asked the students to rate their own levels of knowledge of personal finance. The results may be interesting, but they don’t reveal anything about financial preparedness.

If you ask students or anyone to rate their own knowledge, they can’t produce accurate answers. According to the survey results, 65 percent of the male students rated themselves “highly knowledgeable” about personal finance while only 49 percent of the female students rated themselves the same. With this information, Capital One came to the conclusion that young men are more prepared to handle personal finances independently than young women. That is the wrong conclusion here. This only proves that male students rate themselves higher than female students rate themselves.

Asking people to rate themselves is more a measure of confidence than actual knowledge. When it comes to knowledge, there are things you know, things you know you don’t know, and things you don’t know you don’t know. Think of the “known unknowns” and the “unknown unknowns” popularized by Donald Rumsfeld a few years ago. The world mocked him for sounding somewhat ridiculous, but in the case of this survey, students may not realize how many aspects of personal finance of which they have no knowledge.

Perhaps, in addition to finance, schools and parents should be teaching high school students how to understand statistics to better help detect false conclusions drawn from inadequate data. If drawn from a large enough sample size, we might conclude than male high school seniors are more likely to rate their personal finance knowledge highly, but we should not conclude that boys are more mentally prepared to handle their own finances than girls.

Capital One Survey of High School Seniors Reveals Gender Gaps in Financial Literacy

Published or updated June 24, 2009.

About the author

Luke Landes is the founder of shizennougyou. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar 1 Anonymous

I don’t want schools teaching my children about finance. Anything that important should be taught in the home. Same with sex-education. I want to decide what my children are taught not have some school bureaucrat deciding it. I don’t trust a school to do an adequate job teaching the subject. Thinking back to my own school education i remember what i learned outside of school much better than anything learned in school.

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avatar 2 Anonymous

Schools should at least teach the basics of finance. Most of that is simply grounded in math, reality and common sense.

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avatar 3 Anonymous

Nicely put.

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avatar 4 Anonymous

Agreed on schools at least teaching the basics.

But I can’t believe they fell for that HUGE gap in logic. How they even let that assertion slip through the cracks is amazing!

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avatar 5 Anonymous

Excellent catch. You are absolutely correct.

This study just shows what we already know- males are more confident than females, especially in the traditionally “masculine” areas such as finance.

Research has shown that we have a tendency to rate our knowledge much higher than it actually is. Our overconfidence, in turn, explains why men execute more trades then women, take more risks, and ultimately do worse with their investments.

So eat a slice of humble pie every now and then. It will be good for your pocketbook.

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