We know the financial world is getting more complicated.
And most young consumers just don’t have the experience or knowledge to make good money decisions.
The proof can be found in the nation’s latest financial literacy report card, where most states are far from scoring at the top of the class.
66% of states earned a ‘C’ grade or worse for personal finance education, according to The Nation’s Report Card, a financial literacy study prepared each year by the American Public Education Foundation.
Financial illiteracy is causing Americans to sink into a sea of debt and financial dependency, says the organization. Consumers are pushed toward bankruptcy and dependence on government programs, as they pile up credit card debt and fail to save for their own financial future.
The solution, they say, is educating our children about money, saving and debt while they are still in the classroom, with the goal of instituting personal finance education programs at each grade level in schools, and especially at the critical high school level.
High school seniors averaged disappointing scores of 48% correct on a financial literacy exam. Only 1 out of 3 college students believes they will graduate with the skills and knowledge necessary to be successful in the workplace.
When it comes to teaching students about money, only 17 states were awarded grades of A or B.
Virginia, for example, received the coveted ‘A’ grade by requiring a one-credit high school level class in Economics and Personal Finance. Personal finance concepts are also embedded in the school curriculum starting in kindergarten and continuing through each grade level.
My home state of Florida, unfortunately, earns only a ‘C’ grade. While personal finance is offered at the high school level, it is an elective and is not a required course for all students.
You can see here how your state measures up, according to the American Public Education Foundation, and what personal finance initiatives your state offers students.
The Takeaway: One of the best ways to teach your kids about money and prepare them for the real world? Talk about money, budgeting, investments, and other real life concepts at the dinner table every night, once they land that first summer job, or whenever you can squeeze in a ‘teachable moment’ with your kids. Why do schools even need to get involved? The problem, say experts, is a little like teaching higher level math. Most parents don’t get it themselves, so they can’t teach it to their kids.