by Donna Krache, CNN
(CNN) Debit cards, credit cards, saving and borrowing money – you probably learned a lot of what you know about personal finance from your own life experiences. But in a world of economic uncertainty, rising college costs and social media that can target some of the youngest consumers, financial literacy may be more important than ever for your kids.
So who’s teaching your kids about money?
It’s not likely that they are learning it in school; personal finance is probably not a requirement for a high school diploma in your state. According to the Jump$tart Coalition for Financial Literacy, only four states – Utah, Missouri, Tennessee and Virginia – require at least a one-semester course in personal finance for high school graduation.
Several other states require that personal finance be woven into other subjects, like economics. But less than half of all states require that students take economics.
In fact, most states offer economics and personal finance only as electives.
The 2011 Survey of the States, a biennial report by the Council for Economic Education that focuses on the importance of teaching economics and personal finance, shows that while there has been progress toward more course offerings and requirements in these subject areas since 1998, “the trend is now slowing, and in some cases, it’s moving backward.”
Virginia is one of the latest states to mandate that its high school students take personal finance. Beginning with this year’s freshman class, students must take at least one credit in personal finance at some point in their four years of high school as a requirement for graduation.
Bradley Weeks teaches personal finance and business at Rappahannock County High School in Washington, Virginia. He says that his students come to him knowing almost nothing about money. He uses a software-based curriculum with modules that teach about budgeting, housing, insurance and other consumer finance topics to help students get the basics.
Weeks says that his students’ immediate financial questions focus on college. “They ask, ‘How much money will I need to borrow for college and will I find a job that will enable me to pay that back?’” Weeks says.
How much do kids need financial literacy?
“Kids don’t know enough about personal finance. Our surveys consistently show that over the years,” says Laura Levine, president and executive director of Jump$tart.
The last National Jump$tart Coalition Survey of High School Seniors and College Seniors, conducted in 2008, says high school seniors had an average score of 48.3%, the lowest recorded, in financial literacy. College seniors fared a little better, scoring an average 62.2%.
Questions on the Jump$tart survey revolve around everyday consumer issues like spending, saving, investing, budgeting, taxes and even insurance. One question asked about the kind of insurance that covers damage to your car. Although old enough to drive, only one-third of the high school seniors correctly identified “collision” from the answers provided.
Experts say children learn money habits from watching their parents, so parents need to start teaching their children about money early on.
While many do try to teach their kids about money, according to Levine, there are many students who need that training from their schools. “We need to get to those kids who don’t get financial education at home,” says Levine.
Teaching kids financial literacy pays off in the long run. According to Edutopia.org, teens who receive personal finance education not only manage their money better and have less debt, but they also achieve higher net worth between the ages of 30-49.
And Weeks agrees that kids need to learn personal finance, too. “I tell them, if you don’t master financial literacy, you’ll be a victim,” he says.
Who's teaching my kids about money? Thanks to a judge who believed her lies, my ex, who has 75% of my income given to her by the courts. I thought it was bad when she was just stealing it from me.
guess you should have been a better husband
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There are tons of great sources out there to strengthen your child's financial literacy and habits. Keep sampling them until you find one that works for your family. Remember, not teaching them is the same as teaching them, but what rushes in to fill the void looks statistically grim.
Check out "Marvels of Money ... for kids"
Got the 5 books off amazon for our kids and they WANT to read them. At the back of each of the books is a section called "tips for parents". Event though we know a bit about money it was good to see what the author says is important and what to emphasize. Spending, earning, debts, sharing, and security are all covered. Even though theyre for K5, teenagers could pick up a few things.
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Who's teaching our kids about money? Rapper, Athletes, and Celebrities are. Most kids will never earn half of what they do but they want to spend and live like they do. There lies a mojor problem with hpw they are growing up
Former VA student here.
I remember doing something with Jumpstart way back. I don't think it was a requirement for graduating at the time. But they essentially taught the basics of supply/demand. How debt works, How bad credit card debt can be if you let it grow out of control...that kind of thing.
Being only 13 at the time I can't say for sure if it had anything to do with my current habits. But I will say the crazy interest amount from the credit card examples always stuck with me. To this day I have yet to pay a credit card interest payment.
Now only if I could stare at my student loans a will them away...
Since when do you have to be rich or have plenty of idle time to know how to manage your money?! I grew up among the poorest. They did not have much but every penny they had, they managed it well. Both parents worked day and night outside and inside the house. They taught their children to work hard, to be self reliant and take responsibility for themselves. All the kids grew up to be independent and self supported. They learned not to spend more than they bring in and work really really hard.
I see the most heartbreaking phenomonon of today's education in adults saying they did not need to learn the basics at school, e.g. reading, writing, Math. How did we get these short sighted people?! The basic skills are used each and every single minute of your waking life. Since they are so basic, you are not aware of it any more but it does not make it any less useful. I bet you don't remember how you tie your shoe or walk down the stairs. But that does not mean it is not important. You just happened to have practiced it so many times that it became a background process rather than foreground. It became part of your being that you are no longer aware of it, like breathing. If you failed to master the basics, you cannot hope to learn anything built on that foundation. If you did not learn to breath during the first minutes of your life, you are dead. If you do not master geometry and algebra till like it is breathing, you cannot be a successful carpenter, dress maker, engineer, doctor, ... If you do not master the basics of grammar, you cannot be a successful lawyer, writer, adminstrator, ... Telling kids the basics are useless is horrible and a disservice to your children.
I attended the parent meeting of my son's AP Statistics class where one father asked the teacher how useful is statistics. Poor kid. WIth a father like that, it's a miracle the child made it to AP Statistics. I was tempted to ask if the father had been following the batting average of his favorite Yanker's player the past summer. I gues he would be too dumb to realize what the question was about.
I completely agree. It's sad how many parents don't see the value in education. So many parents want to blame the teachers for their children not being able to read and write fluently or perform simple math but the question really is where the heck are the parents? If your child is 13 years old and unable to read that is not the fault of the teacher, why are you not getting your kid the help they need to advance or teaching them the value of learning and practice? Book knowledge comes from teachers but life knowledge comes from the parents. Too bad people let the public school system raise their kids.
Financial Literacy (one semester) is a graduation requirement in Oklahoma.
Isn't there an APP for that ?
Teaching? Elitist Educationalist!
"Who's teaching your kids about money?"
They' drug deala, fool! I's gon' be fitty dolla fo dat der sack, b! Keepin it real!!!
Folks today can't even count change. They need a cash register to tell them how much change to give. Monopoly, where we all learned to count money, has gone to credit cards instead of cash. Unreal!
There are some great PSA's out right now about financial literacy. If you haven't caught them on TV, check them out at http://www.feedthepig.org/luck, and share them on Facebook, Twitter, etc. and with the tweens, teens, and young adults in your life.
If you use credit cards you're just tossing money down the drain into somebody's pocket. Their whole gimmick is "a good way to build (key word build) your credit"? People need to grasp the fact they (you) are paying money to use money and are doing nothing other than building said companies bank.
Correction: If you keep a balance you are tossing money down the drain. I have several different cards that I use for different cash-back perks depending on what/where I'm using it, usually saving me 3-5% on most purchases, but I am sure to pay them off every month.
you're absolutely correct. Everyone bashes credit cards, but the problem lies in impulse purchases, with no ability to pay them off at the end of the month.
The author of the Rich Dad book series Robert Kiyosaki has been talking about this subject for years..... The book "Rich Dad Poor Dad" should be required reading for all high school students. But it will never be because the "establishment" will never allow it...
John– it is great you have learned so much. But your teacher is wrong- there is nothing inherently wrong with USING credit cards and in fact building up your credit rating by doing so. The problem with credit cards is using them for loans....which is what happens when you don't pay off the full amount every month.
I was taught by my parents to use credit cards...but neither they, nor I, ever carried a debt on them. They should be used for convenience, and to build a credit history but not as an extremely expensive loan!
oops, I meant that directed not at John but Justin.
@acedemia nut- you really think fourteen year olds should be using credit cards? Really?
As it may not be wrong to use credit cards, studies show that individuals using credit cards spend an average of 22% more than consumers using cash. When using a credit card, a consumer is more likely to buy more non essential items than if paying by cash.
Can someone please explain to me when it stopped being a PARENTAL or FAMILY responsibility to teach things like personal responsbility, finance, hygiene, etc. and started being a responsbility of the already over-burdened educational system?
Obviously with the way things are today many parents do not know what responsible personal finance is. I think every parent who has a credit rating defined as poor should have to attend classes with their child... or at least offer them the option. Last a checked guest speakers and donated seminars are free so whats the problem???
Possibly when it became necessary for both parents to work out of the house, and only have time together in the evenings when they would rather make what short time they have pleasant, and not talking about the bills.
Well that's not at all where I was posting my comment to...
Given the mortgage crisis, do you really think a lot of PARENTS know these things either?
That was supposed to be in reply to Mary. The schools absolutely should be teaching these things, but the banks won't like it.
CNN – your comment system is out of whack. Replies are being listed as new comments!!!
Mary, it stopped being a family requirement since most adults are in a hopeless debt spiral. Do you want to learn from the people 50k in the hole or from a neutral party? I luckily figured out fairly young that I did NOT want to follow my parents example...and they to this day give me crap about my old car for example. But that's OK, my old car still runs and I've got 30k cash in the bank to buy a new used one when it finally craps out and I owe no one a dime at 29. Meanwhile they owe everyone and their mother
Good job Megan! I also learned how to handle money myself, deliberately ignoring (or deliberately rejecting) how my family did so. I drive an old car, but own 5 houses, (all above water) with tenants in 4 of them, paying more than the mortgages (Significantly more in 3 of them.) If I'd followed in the footsteps of most of my family, I'd be broke and in debt. But I'd be driving a new car. For a while. Until it was reposessed.
My kids (5 & 7 right now) will be taught how to handle money properly. And how to delay gratification. I hope they listen, and see why we are doing so much better than the rest of the family.
Schools should teach this stuff. I'd have been 5-10 years ahead if I'd learned it earlier. And my sister would be 15 or more years ahead...
This is cost-effective for states. Citizens who make more money pay more taxes. Small cost, large payoff. What's not to like about that?
"Can someone please explain to me when it stopped being a PARENTAL or FAMILY responsibility to teach things like personal responsbility, finance, hygiene, etc. and started being a responsbility of the already over-burdened educational system?" – When parents and families stopped teaching it and the rest of society started having to pay for their mistakes.
as being a 14 yr old, and looking at getting a job in the next year or so first car will be around the same time its a lot all at once. i know ALOT more than the other kids my age, my dad talks to me about this stuff about an hour a week, and i have been trading stocks since last october (of course using small amounts of my college money) i havent lost anything so i consider that a win right?
kinda a reply to what john k said- i come from the best school district in the state, sometimes my social studies teacher will go off for the entire class period talking about finance and mutual bonds and all this other stuff that is important, and by god does he blast credit cards he says not to even to get one for quite a while. its nice that he does that because some kids at my school dont get how the real world somewhat works.
In Fairfax, VA kids in middle schools study personal finance in Civics, then go on a field trip to an indoor fake "village" of storefronts called "Finance Park" where they get mortgages, buy cars, open bank and stock accounts, etc etc etc.
Finance Park has a website: http://www.myja.org/financepark/
That is one reason why Fairfax County, and our schools (TJ grad), rule the country. We control the national government, defense contracting, and property values have been on the way up for the past 2 years. We live in our own little oasis. Work hard and play hard, and teach your kids about money and how to invest.
It is MY job to teach my kids about money and I do it weekly, along with lots of other life lessons. Having schools increase awareness of this is great, but its really the parents job. To bad, when my friends see me do this, or act frugally, they call me cheap. They are the ones acting irresponsible with money.
Unfortunately I think most parents really don't grasp the ins and outs of finance. My dad tried to teach us that credit was evil and that paying cash was the only way. If I had listened to him I never would have been able to take advantage of this first time home buyer market because I never would have had the credit rating to get approved. One guest speaker who is an expert in personal finance can provide hundreds of students life long lessons in just one hour. Maybe even invite parents.
Well, you are free to do what you want, but you can't even put 2 +2 together that the people calling you cheap might not be doing such a great job teaching their own kids?
That was @ Frank in PA. Annoying, CNN.
Schools really need to re-evaluate what is important, and what is not. There are certain subjects that, unless you go into that field for work or college, you'll never use again (math, science, and psychology are examples, and english to a degree). Instead of making kids take classes they won't use again (when was the last time anyone here used geometry?), make them take finance classes instead. And how about some useful automotive skills classes too?
I would hope you use the basics of geometry every time you drive...A three point turn is one example. You are probably using the basic thought processes involved with geometry every hour of every day. (Can I put this spherical orange into a rectangular prism lunchbox or do I need to cut it?) Granted remembering specific theorems and postulates is unnecessary, but you picked the worst possible mathematical example to vent your frustrations on. Had you said calculus or even earth science, I would have agreed with you (though understanding the effect of erosion on your home's foundation might be something one would consider important). Proficiency at Algebra and Geometry are absolutely essential, however, for anyone who wants to be able to evaluate the world at large for themselves. Personal finance cannot be taught without a good, solid foundation in math. Ever tried to explain NPV or even compound interest to someone that can't perform basic math operations? It is not an easy task.
Are you kidding me? "When was the last time anyone used geometry???"" Ummm, let's see. How much paint do I need for the room? How much carpeting do I need to buy? If I have half a gallon of milk left, how much of it will fit in my kids 6oz thermos? I find geometry to have the most pracitcal applications in everyday life!
I would hope people would be using English every day. You know, like writing?
The thing is to understand all of the aspects of a modern automotive class, most students will need the math courses like geometry and Algebra. Automotive class aren't just about changing a tire and oil anymore.
Some of these required classes help expand the mind so that the student can fully grasp new concepts.
Katie...I have news. There is not a job on the face of the earth that will exempt you from needing some skills in math. No student should leave school without being able to do math, read and write. Those are basic. Science is the basis of life. How do you think you can survive your future with no science background? There is something else to consider. You may change your mind or find that you need new skills in the future. What you think you want to be when you are 16 or 17 may not be where you actually end up. Trust me on that.
I am a 23 years old female. I graduated with my bachelors last May in civil engineering. I am currently working on my Masters. I attended high school in Virginia where I took a class that taught a few things on personal finance. We had guest speakers come in and teach us about credit cards, loans, and investing. I think even the teachers learned a few things. I truly think it helped me with making sound personal finance decisions. Last year at only 22 years old I was able to get approved for a home mortgage and bought my first investment property . I am a prime example of the system working. Personal Finance should be built into every high school curriculum.
@Katie, so you think it's a good thing to teach finance in school but not geometry. I am unable to follow your logic
Once again we see and read about the failure of public education when it comes to life skills. Here is one important one, financial intelligence. Our public education is still in the industrial age and is way behind the times. And yes I was a public school teacher who when hired the one question asked of me was, " Can you keep your classroom of kids contained?" My answer was yes and I can teach, and the principal told me I don't care about your teaching only that you can contain them in the classroom for the allotted time. We are now 25th in the world as to quality of education and dropping even more. We are raising financially ignorant kids who will be like lambs to wolves who will prey on them every change they get.
HELLO JOHN K. WELCOME TO MY SIDE OF THE STREET. THE FAILURE OF EDUCATION IN ALL ASPEC. DUMB DOWN EDUCATION AND YOU PRODUCE 'SHEEPLE' ...MUCH EASIER TO CONTROL! I CAME TO FORMAL TEACHING LATE IN LIFE. BUT IT SEEMS I'VE BEEN TEACHING ALL MY LIFE FROM BABY SITTER, MY CHILDREN, ADOPTED, FOSTER, AND THOSE THAT ADOPTED ME. MY SPECIALITY WAS JR HIGH SELF CONTAINED. I'VE NEVER MET A YOUNG PERSON WHO DIDN'T WANT TO LEARN ..SOMETHING. BUT I HAVE MET EDUCATORS, PROFESSORS, C.O.H PEOPLE WHO REALLY KNEW NOTHING ABOUT EDUCATION. THERE ARE A FEW SCHOOL DISTRICTS THAT LOCK THEIR DOORS WHEN THEY SEE ME COMING! TEACH A PERSON HOW HE/SHE LEARNS AND WATCH THEM GO. JOHN YOU HAVE MY PERMISSION TO CONTACT ME DIRECT. DID YOU READ THAT CNN?
Why are you yelling?
Hello parents. It is not your responsibility to teach your kids anything. If they turn into stupid idiots it will be the fault of public education. If however they become model members of society, you get to take all the credit. You will not need to be involved in the process at all though. After all you are only a parent. Your kids shouldn't really be your responsibility anyway.
I know you are being sarcastic, but I agree with what you are saying. It is truly dumb to expect parents who know nothing about personal finance to teach their kids about personal finance. Some parents are working so hard they can't even feed their kids decent food because they are too tired to meal plan, shop, cook, clean up, etc. Personal finance is almost a luxury when you look at it this way, and it is something the schools could be very well equipped to handle.