Financial Literacy
Q. My
friends with kids in college are all mad at the schools for not teaching kids
more about managing money, forming a personal budget, balancing a checking
account, knowing what the paycheck deductions are, knowing the differences
between debit cards and credit cards, how those charges you rack up don't just
go away, the wisdom of socking savings away every month, and so forth. Should
educators bear the blame for this, or did we parents blow this one?
To be fair, both. Young people's financial know-how has gone
from bad to worse, according to a nationwide survey
released in 2008 by the Federal Reserve Board and the Jump$tart Coalition for
Personal Financial Literacy. That's scary, considering all the challenging
financial issues of life in our world today, from adjustable-rate mortgages to
dealing with insurance complexities to retirement planning that should start in
your 20s.
On the survey, high school seniors answered correctly only
48.3 percent of questions about personal finance and economics. That was even
lower than the 52.4 percent in the previous survey in 2006, the worst score out
of the six surveys conducted so far.
Only 16.8 percent of the seniors correctly answered that
stocks likely would offer the higher growth over 18 years of saving for a
child's education, while 37.3 percent thought a U.S. savings bond, one of the
most conservative investments, would offer the highest growth.
But things may be changing. Nearly all the states include
requirements for economics education in their statewide learning standards,
though only a handful mandate a personal finance course as a graduation
requirement, according to the National Council on Economics Education. See the
NCEE's curriculum on http://financingyourfuture.ncee.net/
Junior Achievement (www.ja.org)
volunteers nationwide are going in to schools and helping make students financially
literate. Local credit unions, bank associations and other finance-related
businesses are offering continuing education and pointers to teachers to work
financial education into their lesson plans in the already-overcrowded school
day.
The National Endowment
for Financial Education (www.nefe.org) has
been formed in Greenwood Village, Colo., working with the President's Advisory
Council on Financial Literacy. It sponsors a financial planning curriculum
for 800,000 students in more
than 8,400 high schools. The group providers free materials and interactive
lessons for student and adult consumer education.
Parents can and should insist that their local schools do as
much to educate students about money as they do about nutrition, exercise and
other elements of everyday adult life that a well-rounded, educated person
should master.
Homework:
See the website of the Jump$tart Coalition for Personal Financial Literacy:
www.jumpstart.org