Along with the three “R’s,” should schools also be teaching students about budgets, credit cards and how to be financially responsible? I came across a blog today about this topic and it got me to think about my own education. I can’t recall ever being taught the specifics about budgeting in school, but thankfully I can say that my parents drilled into me that credit cards are bad and debt should be avoided. While I’m grateful that I had parents to teach me those lessons, I wonder how the children of parents who haven’t learned those lessons themselves end up handling their finances.
According to a report from the National Foundation for Credit Counseling, more than 40 percent of Americans grade themselves a C, D or F on their knowledge of personal finance issues. That’s probably pretty accurate considering that the average American household with at least one credit card has nearly $11,000 in credit-card debt. And the average worker saves just four cents of every dollar she earns. A survey of high school seniors conducted in 2004 measured 12th-graders’ knowledge of personal finance basics such as credit, saving, insurance and retirement. More than half (65.5 percent) of students received a failing grade on their answers.
Many educators haven’t focused on financial education in the classroom, in part because standardized exams don’t test for it. Only 17 states require that students pass an economics class before graduation. But The National Endowment for Financial Education says more states are requiring personal finance classes. According to the NEFE, at least eight states have legislated that personal financial education be either a requirement for high school graduation, or a course that must be offered. These states include Idaho, Illinois, Georgia, Kansas, Kentucky, New York, Texas and Utah.
There are some programs offering free curriculum to educators who want to teach personal finance.
National Endowment for Financial Education: This is a free program that covers topics including budgeting, debt, investing and more.
Jumpstart Coalition: Several individual lesson plans are available for free download here covering a wide range of financial topics.
Money Skill: This is an online course geared towards young adults that is available for free use by teachers, parents, non-profits, government agencies and employers.