The Plight of the Innumerate

By Robert L. Cain

They are innumerate. That means exactly what you think it does; it’s like illiterate except with math. Give innumerate people a simple math problem such as “Which of the following numbers represents the biggest risk of getting a disease? 1 in 100, 1 in 10,” and chances are they will answer incorrectly or shake their heads and say “I’m no good at math.” Just as disturbing, they can’t tell the answer to “in the BIG BUCKS LOTTERY, the chances of winning a $10,000 prize are 1%. What is your best guess about how many people would win a $10,000 prize if 1,000 people each buy a ticket from BIG BUCKS?” They can’t deal with or calculate interest, or shipping, much less everyday buying decisions.

Many people were raised with and just accept the idea that they aren’t “good at math,” maybe as a multi-generational family tradition. But in fact they may well become good at math with some easy, self-taught education. But more about that in a minute. In the paper “Measuring Risk Literacy” by Edward Cokely, et al, they wrote. “Mathematics skills are among the most influential educational factors contributing to economic prosperity in industrialized countries.” If they don’t have the knowledge or confidence in their ability to use math to make financial decisions, people will rely on “compelling stories and emotional reactions in decisions rather than the hard facts,” wrote Ellen Peters and Brittany Schoots-Reinhard in their paper “How math skills plus confidence equals (sic) better judgment on health, money.” “They tend to make worse decisions for themselves when numbers are involved.”

Just as important is confidence. Ellen Peters wrote that even if people are competent at math, numerate, if they lack confidence in their ability, knowledge of math won’t help much. In order to find out the importance of confidence in math ability, Peters et al “measured 13 self-reported good financial outcomes among 4,572 Americans—things such as not having high credit card debt or a payday loan,” and found those with both confidence and good decision-making were much superior to those who were competent but less confident. When ability and confidence matched, 82 percent had good financial outcomes as opposed to the 18 percent who experienced bad outcomes up to and including bankruptcy filing.

Compare that to the those who had both low ability and low confidence who reported “fewer good outcomes,” just 78 percent. That doesn’t seem like much of a difference, but is, according to Peters, very much like “the difference you’d see between people who make $50,000 and $144,000, a $94,000 salary difference.”

The result can be financial decisions that will land them in difficulties for possibly their entire adult lives. Kailey Hagen wrote for the Motley Fool that “Annual fees, late fees and APRs are also important, especially for those who have credit card debt or have been known to fall behind on their payments.” The article continued that many millennials admitted they had no idea what APR means. As a result they “underestimate the expense of carrying a balance.”

Of course, that reflects on their credit scores, their ability to get car loans, better credit rates, and rent apartments, and even get a job when an employer checks credit. In many jobs, simple math calculations come into play, possibly even in warehouse jobs where figuring how much stock is left and how long it will take to deplete are essential.

Bad decisions will continue because they will rely on “compelling stories and emotional reactions” and too-good-to-be true offers for their purchases as opposed to calculating the best way to spend money. They are easy prey to less-than-ethical salespeople who will tell some compelling stories in their sales pitches, who will tell how other customers have “benefited” so much from using their products or services, who will sell them a car with a payment that uses up 30 percent or more of their income so they can “be proud driving it down the street to their house” while the math-challenged customer can’t calculate the actual cost.

Financial problems proliferate with missed payments, worse credit scores, and even financial disaster that affect their entire existence.

Some adults seem to believe that poor math skills are genetic, because after all, their parents and grandparents were no good at math. But in fact math is something that is relatively easy to learn. Starting with “Math Facts,” someone should be able to answer a basic math question in under two seconds, such as what is six times 12, or what is 10 percent of 72?  How does someone get those skills?

Readily available resources such as phone apps, flash cards, websites, allow people to practice a few minutes a day and make remarkable progress, gaining both ability and confidence in math.

How can you know your own degree of numeracy? One test cited by those who know as the gold standard over and over is the Berlin Numeracy Test. It takes less than five minutes to complete and requires pencil and paper. You can take it yourself by going to

The essential point here is that poor math skills can and do condemn people to a life of financial misery simply because they can’t figure out if something is a bad deal. So much information comes at everyone daily that the important numerical information gets overshadowed by the “compelling stories,” “emotional reactions,” and too-good-to-be true offers concealing easy math calculations.

Written for Zip Reports where they provide applicant screening services. Visit their website.

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