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10 tips to raising money-savvy teens

When it comes to financial literacy, today's graduates fail to make the grade. Asked about basic financial concepts, high school seniors correctly answered only 48 percent of the questions, down from 52 percent in 2006, according to the Jump$tart Coalition's recent survey on financial literacy. College students didn't fare much better, with college seniors scoring a 65 on their survey, administered for the first time in 2008.

Why do so many miss the mark? It starts in the home. Whether they lack confidence in their own money management skills or assume that their children's schools will cover it, many parents don't talk about money with their kids, and those who do often miss the fundamentals.

"A lot of the basic stuff is overlooked by parents just because they assume that their kids know it, and they don't," says Janet Bodnar, author of "Raising Money-Smart Kids."

"Why would they? Unless you tell them, there is no reason they would know that your family insurance bill is going up by $1,000 a year just because they start to drive."

Before they leave the nest, boost your brood's financial literacy with these 10 money management lessons.

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1. Balance a checkbook 

Of the high school seniors surveyed, only 45 percent have a checking account, and one out of four have no bank accounts at all. Once they leave home and set up an account on their own, those without parental training often make costly mistakes. Some 30 percent of college students admitted to bouncing a check.

As soon as teenagers start earning income from a job, it's time open a checking account, even if it's a joint account with a parent, says consumer adviser Clark Howard, author of "Clark Smart Parents, Clark Smart Kids." Teach them how to write checks, use a register and reconcile their account with their bank statement.

Mistakes will happen, so look for kid-friendly options, such as accounts that charge teens lower overdraft fees. And though he refers to them as "piece-of-trash fake Visas" on his radio show, debit cards are a good choice for teenagers, Howard concedes. Because there's a finite amount of money they can tap, it's like training wheels for credit cards.

2. Budget money  

Over a third of the college students surveyed had paid a credit card bill late, and while some just forgot to pay it, others put off writing a check because they ran out of money.

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