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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."

Bankrate.com's corrections policy -- Posted: April 21, 2006
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