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Schools Fail at Financial Literacy

Image by Credit.com
Image by Credit.com

"All I really need to know I learned in kindergarten," is a saying made famous by Robert Fulghrum, an American author who, in 1988, turned a collection of reflective essays into a best-selling book bearing that very title. Indeed, in kindergarten we learn to share, be kind, participate, work together and help one another. In the grand scheme of life, what more does an upstanding citizen need to know, right? How about delaying gratification and the importance of saving? How about consuming and carrying only what you can manage, and holding true to your promises? At last check we weren't doing an impressive job teaching much of this in the classroom, yet these are the very lessons that can lead to a healthier financial life and help us achieve and maintain great goals.

While I do think Fulghrum's saying has considerable merit, it ignores the unfortunate fact that we fail to teach financial literacy at not just a young age - but all ages. The grades are in. From Jump Start Coalition's biennial money 101 exams, which high school seniors repeatedly flunk, to this year's financial pop quiz by Higher One, on which most college students earned a C (at best), the evidence is clear.

The Higher One survey, which questioned more than 2,000 college students nationwide, is pretty disturbing:

  • More than 70% didn't know how to get their credit score. Um, what's a credit score?
  • 57% admitted having credit card debt. (And probably plenty others who didn't admit to having credit card debt.)
  • More than half admit that they were late paying bills this year.
  • More than 50% said they had no clue how much to set aside for a rainy day.
  • More than half of students save less than 1% of their income. (Read: zilch.)

No doubt we can do a better job educating young adults on simple money matters. Students, too, are aware of this major void in their daily curriculum. Nearly 70 percent of students polled think their colleges and universities need to boost financial literacy initiatives and develop educational programs to show how to effectively manage their money.

In the meantime, fiscal confidence among this generation is slipping. The percentage of students in the Higher One Survey who claimed that they were confident or very confident in their financial management skills was the lowest reported in three years.