Training for financial success has to start early

Our young people will spend their summer months away from the rigors of academics. Many of us worry about the well-documented step backward in reading and math that young people, particularly those from low-income households, experience over the summer months. But I also worry all year long about young people's significant lack of financial knowledge. Each year, millions of high school seniors in the United States graduate with limited knowledge of how to be financially successful.

While children can begin to learn wise money practices at home, studies have shown that many parents lack the confidence and knowledge to teach their children about today's complex personal-finance topics. Parents need help educating young people about financial decision-making, budgeting, and saving and investing.

Basic life skills are part of a well-rounded education, and learning how to be responsible for your own financial livelihood must be at the center of that education. A number of studies overwhelmingly show that Americans, young and old (including K-12 teachers and students), believe that teaching personal finance in schools is essential. But despite strong public opinion in favor of school-based personal-finance education, our schools still teach too little about how to live as a financially successful adult.

Fewer than 50 Pennsylvania high schools actually require students to take a personal-finance course before they graduate. One-off classroom visits from people in the business community, a few lessons here and there on budgeting and saving, and field trips to financial institutions will never succeed in teaching students the personal-finance knowledge they will need by the time they reach adulthood.

Several studies have shown that short personal-finance programs have little or no effect on students' knowledge about the topics they will need later in life. However, the results were different in a recent study I conducted with my coauthors Carlos Asarta and Bonnie Meszaros from the University of Delaware. We found that 967 students from Pennsylvania, New Jersey, and Delaware who took the semester-long high school personal-finance course "Keys to Financial Success," on average, increased their personal-finance knowledge by more than 60 percent between the start and the end of the course. This longer-duration class, which is taught by trained teachers using a teaching model developed by economic education experts, works to increase student knowledge about topics as diverse as saving and investing, careers, determinants of personal income, insurance, and risk management.

The prescription for solving some of our nation's economic weaknesses lies in better preparing our young people to make the kinds of financial decisions they will face in adulthood. Since classroom time is scarce, teachers can be trained to integrate lessons on personal finance into existing classes. For instance, under the Common Core State Standards, students are expected to demonstrate a strong aptitude to read and write informational texts. Personal finance abounds with opportunities for our students to read and write about the real world.

To help schools, many organizations, including the Federal Reserve Bank of Philadelphia, provide in-service professional development programs and curriculum resources for teachers. Together, these programs and resources allow schools to implement a plan for teaching personal finance across the K-12 grades.

Everyone can do more to ensure that schools are teaching personal finance. We need a grassroots effort to make teachers and school administrators better aware of the abundant resources and training programs available. And school boards and public officials need to know that we all believe that the financial futures of our young people depend on schools doing more to integrate personal-finance lessons into every classroom.