"You don't blame the victims for what happened, but you also recognize that fewer people would have been hurt if they had known a little bit more," said Laura Levine, executive director of the JumpStart Coalition for Personal Financial Literacy, a Washington-based financial-education advocacy group.
Personal finance isn't something most people learn in school.
Currently just three states -- Utah, Missouri and Tennessee -- require K-12 schools to teach a one-semester personal-finance course, according to the JumpStart Coalition. Another 17 states require personal finance as part of another class, and 30 states have no requirement.
But ranking state requirements isn't easy. Some states require schools offer financial education, but students don't have to take the class. Others require personal finance as part of other subject matter, but there's wide variation in what is taught.
JumpStart uses a fairly strict measure: Those three "gold standard" states require a stand-alone course on personal finance. A separate survey by the Council on Economic Education in 2007 finds seven states require personal finance in high school, but in some cases it's embedded in another course, such as economics. See JumpStart's map of state's requirements.
One thing is clear: Students in many states don't get financial education. High-school seniors answered just 48% of questions correctly, on average, on a 31-question personal-finance survey by JumpStart in 2008. And that's down from an average of 52% correct in 2006.
"The critical piece of any kind of financial education is truly your approach to spending, borrowing, and saving. Once you have those pieces, then you can build the rest of it," said Tahira K. Hira, a personal-finance professor at Iowa State University and a member of the President's Advisory Council on Financial Literacy, created by President Bush in January 2008.
"If you think of financial education only in the area of retirement planning, investment planning, portfolio construction -- people will never get to do that unless you have the basics down and the basics are built at a very early age," Hira said.
Not required, still taught
Schools may choose to teach the topic, even in states where it's not required. Take Castilleja School, a private, all-girls school in Palo Alto, Calif. Recently, Christy Story, a history teacher, tapped an outside consultant to teach a one-hour personal-finance seminar to the school's senior class.
Before the seminar, Story asked her students to circle their values on a piece of paper -- love, friendship, success, environment. Then she asked them to write down the last five things they spent money on. This elicited a chorus of complaints. "I don't remember." "Does a latte count?" Then, she asked if their purchases matched their values.
The exercise "drives home that the simplest and yet most overlooked budgeting tool is just to start to track your money," Story said, in an email interview. "The key to financial health and also a fair amount of personal satisfaction comes through living one's values and to do so you have to make smart choices with your money."
Interest grows as budgets shrink
Castilleja School is not alone in offering a personal-finance class to its students, even absent a state requirement to do so. And the financial crisis appears to be prompting more interest in financial education.
Requests for personal-finance classes are up sharply, said Lawrence Glazer, president of JumpStart's Massachusetts chapter, and managing partner of Boston-based Mayflower Advisors, an independent adviser firm.
Glazer said more teachers and after-school groups are seeking personal-finance information. Separately, Mayflower Advisors has seen a steep rise in employers asking for the company's personal-finance seminars for employees.
"You would not believe the difference in terms of the demand. They're standing in the back of the room because there are not enough seats," Glazer said, adding that the focus is on broader topics such as credit and debt, not solely retirement planning.
Still, while greater interest in financial literacy is good news, Hira said she'd like to see a cohesive financial-education policy nationwide.
"Right now, the way the system is, in some ways it's more harmful than useful. We have no idea who is teaching what," she said. "Somebody teaching a half-hour course by a volunteer versus somebody teaching a course that has four segments to it -- all of those things are being called financial literacy."
President Obama has not yet broached the topic of financial education -- that's not a surprise given various crises competing for his time. But administration officials have met with President's Advisory Council members. That indicates "an interest and a commitment" in promoting financial education, Hira said.
Still, even as the economic crisis drives awareness of the need for such education, it also may further limit states' ability to adopt new education practices right now.
"Where we seem to have this stumbling block is that the school day is already crammed with things kids have to do and learn, and budgets are already stretched to the breaking point," Levine said.
At the same time, Levine and others say personal-finance education should encompass younger students. "While a high school student has the intellectual capacity to understand the content, the younger kids have a better ability to establish behaviors such as saving, frugality, things like that. You want to catch them at all levels," Levine said.
Sam Renick, founder of "It's a Habit," a Los Angeles-based personal-finance education company, said the games and songs he performs appeal to children as young as four years old. He focuses on the idea of saving; one song's refrain: "From every dollar, save a dime."
When he was in the financial-services industry, Renick often heard clients express regret they hadn't started saving earlier in life. "I must have heard that thousands of times," he said. The message he gives children is "saving makes you strong."
What you can do
Worried about the financial education your kids are -- or are not -- getting?
Focus on your own actions. Parents should be "very mindful of how they're managing their money because their kids are learning and they're watching them very carefully," Hira said. "They're learning how you manage cash flow, how you distinguish between a need and a want." If you work with a financial adviser, ask about an educational session for your kids. Christine Courtnage, a Chicago-based wealth strategies adviser with U.S. Trust, in Bank of America's private wealth management group, says more clients now are asking to bring in children. "It's something that we bring to the table more often than we used to," Courtnage said. Visit the Web sites below for more information. For instance, the JumpStart Coalition's Clearinghouse offers various financial-education materials, including free products.
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