7/30/2013 6:15 PM ET|
Why high school kids are financially illiterate
A report out this month finds most states doing a poor or mediocre job in imparting key financial skills to students.
If the U.S. education system can't teach Johnny how to read, it's not surprising it can't teach him how to balance his checkbook or calculate compound interest.
A report out this month from the Champlain College Center for Financial Literacy (CFL) in Vermont finds that the vast majority of states are doing a poor or mediocre job of educating high school students in key financial skills. The report card, which awarded each state a letter grade, gave 60% of the states a C or less; 44% of those received D or F grades.
John Pelletier, director of the CFL and author of the 2013 National Report Card on State Efforts to Improve Financial Literacy in High Schools, argues that to make programs successful at the high school level, "financial literacy topics must be taught in a course that students are required to take as a graduation requirement."
The other essential ingredients for success are increased teacher training, funding to ensure that classes are offered to all high school students, and standardized assessments that insure that training is working.
A generational 'money' gap
In the aftermath of the 2008 banking and real estate crises, experts say financial education is critical to helping young adults better handle everything from credit card debt to student loans, and to make more complex choices about investing and mortgages. Since there's no national curriculum standard for teaching financial literacy, questions remain about who should teach the classes and even whether funding should come from public or private sources. As a result, the quality of financial education varies wildly from state to state and from district to district.
A-rated states like Virginia, Utah, Tennessee and Missouri are the only ones in the report that require a one-semester stand-alone class in personal finance as a graduation requirement. Tennessee, Georgia and Idaho (the latter two also received A's) require students to be assessed on their knowledge of financial topics.
Alabama, Arkansas, California, Connecticut, Delaware, Hawaii, Massachusetts, Nebraska, Rhode Island and Washington, on the other hand, all received failing grades because they have few or no requirements for personal-finance education in high school.
A low priority
For some schools, financial literacy is just not a top priority. "If your (students) can't read, or you're struggling with gang problems (in your neighborhoods), financial literacy is fairly low on the list," says Carol Roth, a former investment banker and the author of The Entrepreneur Equation.
So how does financial education fight its way in, when every subject in cash-strapped school districts is competing for its own piece of the dwindling budget pie?
Not easily, according to Todd Harrison, founder and CEO of Minyanville, a New York-based financial education and media website. Harrison's company has developed a financial literacy curriculum that has failed to gain entry into public schools. He blames a "labyrinth of politics in the school systems" that are hesitant to experiment with alternative teaching methods and that undervalue financial education.
"A financial framework is entirely more important then just an elective program," he says. "It should be mandatory."
VIDEO ON MSN MONEY
Like, what's a "checkbook"?
I wouldn't blame parents, but in households where the parents don't understand much about finance, or are not sharing what they know, the kids are unlikely to learn. I have a degree in finance, but didn't know or learn much of what I know from my parents. Whole new world out there.
When I took home economics circa 1980, they spent a good 6 weeks teaching the various things about credit (revolving accounts, balloon payments, variable APRs, etc.). I hated it, but I do remember it. And I never understood why anyone would sign on for balloons - always seemed like setting oneself up for failure.
I loved my Dad, but what I learned from him was how to time checks between banks and keep a roof over your head. Real economics / financial literacy does have a place in schools because even with the best intentions, working knowledge of parents can get it wrong.
speaking for myself my father would teach me the ways of money at age 6 and moving forward on how money flows basically like a mighty river before you know it, you've lost it, therefore you save and invest wisely and put off buying nonsense until you have enough to cover all that 'fun' etc... so you don't go belly up as did ALL OF THE OBAMA SOLYNDRA green phony energy companies, which were phony setups from the git go!! got my first credit card was when I was 18 and my old man said, ok, you're working, you go over the limit and don't keep up those payments don't EVEN think! of asking me to cover your debt, now it's all on me and I understood that, so what's the fcukin' problem now?? guess it more idiot parents breeding more idiot kids and the IDIOT vicious circle once again goes round and round....and round!
anyway....if you have idiot parents like that instead of parents that teach you from an early age how important it is to be wise with your finances, why would anyone think that kids now would be fiscally responsible?? give 'em a credit card and they're in debt up to their eyeballs in a matter of seconds!! and then duh!!! is plastered all over thier faces when the bill comes in...and to excuse this behavior irresponsible as it is,
so of course the liberals blame the banks who hand out credit card applications on campus, huh? who told those idiot kids to spend so recklessly?? did Chase do that?? did Bank of America do that?? Citibank?? isn't it painfully obvious that "plastic" is not a bottomless well of money and you eventually have to pay back the BANKS for all that CREDIT??? so please!! people have to take responsibility for their own ACTIONS financial or otherwise you leftist 'excuse the bad behavior and blame everyone else buy me' liberal whacko's!!!
so there you have it, oh and then add an idiot marxist freak phony president spending the country into oblivion and c'mon...is it really that surprising?? of course not
Teaching kids financial literacy might turn them into beig capitalists. Or, they might eventually become businessmen. That would go against the marxist doctrine, so it is quickly eliminated by the lib minded teachers.
So, I am sure the kids in Asian countries already know how to compute compound interest and their net worth. Within a generation they will own the US financial sector and giving credit cards to little financially illiterate Johny and Susie who will ven be mortgaging their social security checks........
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