Hope for their financial future

Good news from the pages of USA Today… fourteen states now require high school grads to have some basic personal finance training.

States are recognizing that financial literacy is an important “skill for the 21st century,” says Joseph Peri of NCEE. “We don’t wait until college to teach students how to read. Why would we send them into college without teaching them these important money-management skills?”

The movement toward personal-finance education comes at a time when the financial world has gotten more complex, with college costs skyrocketing, credit card fees rising and exotic mortgage products proliferating. Young adults, for the most part, are as confused as ever about money matters.

High school students failed a 2006 quiz from the JumpStart Coalition for Personal Financial Literacy, correctly answering an average of only 52.4% of questions about credit cards, insurance, retirement and savings. This is well below high school students’ average 57.3% score in JumpStart’s 1997 poll, but up from a 50.2% low in 2002.

Personal finance is an essential skill that all high school graduates need to know. Many may go through the rest of their lives never having to recall European history or quote Shakespeare, but very few will be able to function without ever needing to use a checking account, credit card, or take out a loan. The national individual savings rate has dipped into negative territory, making it quite apparent that our citizens need a better financial education. That needs to start in high school, where teenagers are being targeted more and more by retailers to spend, spend, spend, and then are shuffled right off to college where they accumulate one of the largest debts of their lives. They should be given the knowledge about how to deal with that before they’re stuck in the middle of it.