| High school seniors failing in finance |
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High school seniors from wealthy families are keeping
a closer eye on their finances than before, the survey shows. While
it's not clear why, Mandell speculates that parents are encouraging
kids to take more financial responsibility, more affluent high schools
may have teachers that focus on personal finance, and the costs
of education has caused some kids to pay part of the bill or take
on student loans.
The survey shows a continued deviation between white
students, who scored slightly above the average score, and minority
students, whose scores remained in the 40s. Mandel says part of
the reason might be access to better-funded school districts where
it's more likely that teachers are talking about finances.
Three questions were added to the test to determine
whether students considered personal finance important. The students
were asked what they thought caused a serious financial difficulty
to the point that families can't pay their bills, how bad they thought
the situation was for families who didn't have enough money to pay
their bills, and what they thought occurs to older people when they
retire if they haven't saved money and don't have a good pension
from their jobs.
Mandell found that a portion of students do believe
financial education is important, but at least half don't.
"I don't think we
teach our kids what it means to be living in the 21st century,
which means kids are on their own," says Mandell, who points
to government cuts to Social Security and welfare payments, the
decline in the number of companies offering pensions and parents
who can barely afford to help their kids, if at all.
U.S. legislators recognized the need for this education
by designating April as "Financial Literacy Month" in
an effort to raise public awareness about the importance of financial
education and the burdens from not understanding personal finance.
U.S. Sen. Daniel Akaka, D-Hawaii, sponsored the Senate
resolution. The senator crafted the Excellence in Economic Education
Act, which he included in the No Child Left Behind Act, and is an
advocate for financial literacy. He says more student participation
in the Jumpstart survey is a step forward, but the scores show that
more improvement in education is needed.
"Students need to realize the applicability
of personal financial management to their daily lives," he
says.
In 2002, participants in a panel discussion held by
the secretaries of the departments of Treasury and Education identified
standards, testing and textbooks as areas where financial education
can be incorporated, according to a report prepared by the Department
of Treasury's Office of Financial Education.
Panelists indicated that standards need to be part
of the curricula, much like math and reading. If not, it's unlikely
the student's knowledge or understanding will be assessed, since
"teachers often teach to the test," according to the panel.
Once the standards are included, they create a demand for textbooks
and other instructional materials that include financial education
in the subjects.
The National Council on Economic Education survey
released last year found that 38 states include personal finance
standards in their education programs. Only seven make personal
finance a requirement for high school graduation.
The National Conference of State Legislatures, which
tracks financial literacy legislation, has identified states like
Massachusetts and Hawaii that have bills encouraging personal finance
instruction in all grades. Some states, such as Iowa, Missouri,
Ohio and Oklahoma, have bills that require personal finance education
as a condition for high school graduation.
But, personal finance experts suggest parents teach
their kids about money. For more, see "10
tips to make your children money-wise."
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