Guessing is not a strategy: How to build decision velocity with AI and real-time data
June 10, 2026 | Live Webinar
The Journal of Consumer Affairs has just published a study that says 27% of people aged 23 to 28 can answer basic financial questions.
The research was headed by Dr. Annamaria Lusardi, the Joel Z. and Susan Hyatt Professor of Economics at Dartmouth College and a Research Associate at the National Bureau of Economic Research. It gives some reasons why so few young people are financially literate including the fact that financial literacy is largely influenced by parental education levels and financial habits.
Young people who are financially literate are more likely to:
- have college educated parents (in particular, college educated mothers)
- have parents who were investors in stocks and retirement savings while they were aged 12 to 17
- have had high school teachers interested in students
- have peers who planned to go to college.
According to the study in the Summer 2010 issue, a college-educated young male whose parents had stocks and retirement savings when the respondent was a teenager was about 45% percent more likely to know about risk diversification than a female with less than a high school education, whose parents were not wealthy. Young women, African-Americans, Hispanics, and those with low educational attainment scored lower than other groups. The results of this research support the US Treasury-backed findings of the Financial Capability Survey which were released at the end of last year.
When you are recruiting project managers, you can’t ask questions about a candidate’s parents and their personal financial situation. However, you could get candidates to do a simple numeracy test, or set them a project finance case study to work on, as part of the recruitment process.
Lusardi, who is the author of Overcoming the Saving Slump analysed financial literacy questions based on knowledge of simple concepts, such as the capacity to do a two-percent calculation, and the workings of inflation and risk diversification. While one of the aims of the study appears to be to highlight the fact that schools don’t teach literacy, it flags up that young adults entering the workforce may not be as clued up with numbers as you might think.
“If we do not address financial illiteracy among young people through high school literacy classes, we will fail to equip young people with the tools they need to make financial decisions, and we may pay the cost down the road,” Lusardi says. That could be on your project, if it’s managed by someone who doesn’t have the basic numeracy to ask the right questions. “Not everybody has an opportunity to learn from their parents or their friends. Young people at the start of their career, or who are in the process of buying their first home need to be financially knowledgeable before they engage in financial contracts.”
Of course, not everyone who will pitch up for a job is financially illiterate, and not all of your young project management employees will need extra help with juggling the finances on a project. But it doesn’t hurt to ask – as experienced project managers, coaches and mentors we should be looking out for people who might need a helping hand with project financials, and providing it. Not only could you end up with someone who is skilled at managing maths at work, you could also be equipping someone get to better handle their personal finances.
Find the article online: "Financial Literacy Among the Young.” Annamaria Lusardi, et. al. Journal of Consumer Affairs; Published Online: June 1, 2010 (DOI: 10.1111/j.1745-6606.2010.01173.x).
Posted on: June 07, 2010 03:17 PM |
Permalink