An F in Economics

The thing is, young people can easily shut down when they are told about something in the drabbest of didactic fashions. But was that even the case? Had they been taught about IRAs and just become disengaged because their professor was not John Keatingesque enough? No, they had not been taught nor told about them at all and that is a major problem.

There was a palpable sense of worry both before and after the financial crisis that young people were graduating college without the proper knowledge needed build healthy finances for themselves and their families. I recall being a senior in high school and attending a mandatory class called Independent Living. The curriculum ranged from how to write a check to how to sew on a button. Looking back, the class was highly beneficial and I think that an individual financial literacy class should be mandatory for seniors in high school and should be revisited and expanded upon when they are seniors in college. It could tackle myriad topics, among them the dangers of credit cards and the crippling effect they are wreaking on young people.

I decided to conduct my own poll and I asked 10 college seniors who will be graduating next month if they have ever heard of a Roth IRA and if they had, did they know the difference between it and a regular IRA. All had heard of an IRA but had a hard time explaining details and only one knew the full definition of a Roth.

I know that there is a dearth of knowledge among young people when it comes to their own personal finances. The fact that students can explain Keynesian economic theory and not have ever heard of a Roth IRA should raise more than a few eyebrows and cause concern about the practicality of college curriculums and the repercussions this will have on the industry and society as a whole.

But perhaps there is a silver lining to be found here. Customer education is frequently touted as a major objective for this industry, and the only real way to drive a higher level of engagement. If tomorrow's customers are this ignorant about products they really should be buying, at the very least, they don't have negative perceptions to be unlearned. They are a blank slate. Now somebody has to chalk the first lines on it.