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Closing the Gap in Economic Education: Financial Literacy Begins in the Classroom

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Closing the Gap in Economic Education: Financial Literacy Begins in the Classroom

Nan J. Morrison, President & CEO, Council for Economic Education

Huffington Post Blog 04/30/2012

Like most young adults fresh out of college, saving for the future wasn't my top priority when I landed my first job. Left to my own devices, I can't say for certain I wouldn't have spent almost every cent of those paychecks, if not for my father reminding me once a week, every week, to contribute to my 401(k). He never missed a call -- and I never missed a payment.

But not everyone is so lucky to have a mentor like I did.

Parents are Lacking in Financial Know-How

If there's one lesson we've learned from the recent recession and its painful fallout, it's that an alarming number of Americans lack the basic dollars-and-cents understanding they need to navigate today's global economy. The gap between what people know and what they need to know is widening every day.

Just consider these stats:

Only 49.7 percent of U.S. adults can define a "budget deficit."

9 million households have neither a checking nor a savings account.

29 percent of Americans have no savings at all.

It would seem that an overwhelming number of American adults are ill-equipped to instruct their children in economics and personal finance. But they're not the only ones.

Teachers and Schools Come up Short on Economic Education

Many teachers are also woefully under-educated when it comes to financial literacy. In a recent survey, 20 percent of teachers stated that they do not feel competent to teach basic personal finance. And those who actually teach economics to high school students have often received minimal college instruction in the subject.

That said, some schools have ramped up financial education requirements in the years since my organization, the Council for Economic Education, has been tracking their progress. In the year 2000, only seven states required a high school personal finance course to be offered; by 2011 that number had doubled to 14. But our most recent Survey of the States shows that in the past two years, that momentum has slowed, and in some cases even come to a halt.

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