Remember in school when you practiced balancing checkbooks? No? That's because personal-finance skills have rarely been taught in the classroom.
Despite initiatives to help high-schoolers manage the green stuff, students' financial knowledge has actually been slipping, according to a periodic survey conducted by the Jump$tart Coalition for Personal Financial Literacy.
"It's a dismal situation," says Dara Duguay, executive director of Jump$tart, a Washington, D.C.-based advocacy group. "Only 10 percent of youth are graduating from high school with any kind of instruction in personal finance."
That deficiency carries over into college and adulthood, and often adds up to a pile of debt. One in 10 students owes more than $7,000 on credit cards before college graduation, according to student-loan company Nellie Mae.
When parents do take it upon themselves to familiarize their children with money management, the effect is powerful, says Mark Shug, a professor at the University of Wisconsin's Center for Economic Education in Milwaukee. "But it turns out that most parents don't talk to their children about these matters, and I suspect that's because parents themselves don't feel confident about them," he says.
The nonprofit National Endowment for Financial Education (NEFE) is devoted to helping fill this gap. It has designed curricula to work within math, economics, and social-studies classes. "We show teachers how this might fit into what they're doing anyway," says Elizabeth Schiever, NEFE's director.
NEFE offers free class materials to schools and hosts a Web-based course to guide teachers, parents, and the public (www.nefe.org/webtraining/index.html).
Although fewer than 10 states require a unit of structured personal-finance education, the subject is starting to receive more attention. The new federal education legislation includes the first appropriation specifically geared toward promoting financial literacy.
"A lot of public and private organizations are making an effort to address these issues, partly because their customers won't be good customers if they don't know what these things are," says Dave Mancl, director of the office offinancial education at the Wisconsin Department of Financial Institutions.
Federal Reserve Chairman Alan Greenspan has been an outspoken proponent of financial-literacy education. Other supporters include banks like JP Morgan Chase and Wells Fargo. Credit- card companies back financial education programs, too, but are often considered as part of the problem.
Two years ago, Wisconsin formed a task force to figure out how the state could remain financially competitive. "Their No. 1 recommendation was that personal financial literacy be taught K through 12 and fully funded," Mr. Mancl says. Several other states have related legislation pending.
In Wisconsin, high-schoolers now can apply for a two-week "economics boot camp" during the summer. There they learn about saving, credit management, and investing, as well as the basics of how the economy works. As an incentive, the program gives a $500 savings bond to everyone who completes the course.
"The stock market to me was just a bunch of numbers, and I wanted to learn how to save and invest for college," says Theresa Abler, a junior at Milwaukee High School of the Arts who participated in the Youth Enterprise Academy last summer. Theresa earns money working part time as a waitress, and says the program motivated her to change her habits. "Before, I was spending all my money on stupid stuff: movies, going out with friends, spending it without thinking," she says. "Now I put half of my money in the bank for college."
High-schoolers who don't receive any financial instruction by the time they graduate rarely come across it in college either. However, seminars or noncredit classes are often available. Smith College last year started a series of weekend and evening minicourses as part of its new Women's Financial Education Program, funded by investment bank Goldman Sachs and an alumna who is a partner there.
A few universities are promoting financial know-how as soon as students walk in the door. Oklahoma State, for instance, added a personal-finance session to its freshman orientation programs.
The University of Wisconsin at Madison last fall initiated "Money Talk," a series of peer-led workshops in freshman dorms. At the end of each session, students participated in a trivia contest, and the winners received $50 US Savings Bonds. The school is also opening a peer financial-counseling service.
What students haven't learned by the end of their formal studies, they need to pick up on their own as adults. An alumna of Columbia University who works as a financial adviser at Salomon Smith Barney in New York has been giving free seminars on financial planning to the Columbia College Women alumnae group. The evening workshops are among its best-attended events. Often the questions from the Ivy League graduates cover the basics of saving, investing, and crafting a personal financial strategy - the very topics that experts say should be introduced in high school.
Despite increased efforts to teach children about personal finance in schools, they still learn about money first and foremost at home. Here are some tips on how parents can help instill financial responsibility:
Speak up about money early and often while your children are growing up. Many parents grew up in households where it was considered improper or impolite to discuss money matters, but times have changed.
"People are not doing their children a service if they don't involve them in the family's finances," says Elisabeth Plax, a certified financial planner in the Cleveland, Ohio, area. "Children don't need to know about every bill, because that's not what childhood is about, but parents should talk with children about their own attitudes toward money and explain basic principles of saving and spending."
Make lessons hands-on. "Give children an allowance, and then make them responsible for paying for certain things so they can learn about budgeting and saving," says Michael Gutter, an assistant professor at the University of Wisconsin at Madison. Open a savings account in the child's own name and have him or her make deposits and watch the money grow. When children are older, involve them in investing, perhaps by using mock accounts that some websites offer.
Use outside resources. The Internet offers myriad sites for learning about money. One teacher's favorite website to send students to is www.ntrbonline.org, which is designed for youths by the National Endowment for Financial Education. Another teacher likes www.themint.org. Jump$tart hosts an information clearninghouse on its site (www.jumpstart.org), where parents can search for resources by topic and grade level.
Mr. Gutter recommends the book "Capitate Your Kids: Teaching Your Teens Financial Independence," by John Witcomb (Popcorn Press, $16.95).
Encourage schools to introduce personal finance. "There are countless initiatives to get these things into the schools, but the schools say, 'We don't know if parents want this,' " Gutter says. "Call up your school and tell them you want personal finance taught, or let teachers know during parent-teacher conferences."