Why Most High Schoolers Don't Know How to Manage Their Money

Students must overcome a steep personal-finance learning curve.

Ten states use attendance counts from a single day to determine district funding for the school year.

In Pictures: Basic Money Lessons You (Probably) Missed in High School

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Do your children know the ABCs of money management?

High school students are studying up on calculus, advanced chemistry, and world history, but most aren't learning fundamental money lessons to help them financially navigate the real world.

Such is the case with Jessica Pollack's son Adam, an 18-year-old who graduated in May from Los Alamitos High School in Orange County, California. Much to Jessica's chagrin, the school doesn't require its students to take a personal-finance class to graduate. "It's a top-rated school, but there is no personal-finance requirement, which is just astonishing to me," Jessica says. "There's a technology requirement that's statewide. As a technology teacher, I appreciate that, but these kids are exposed to computers and technology all the time. Yet when it comes to buying the computer and financing it, they're clueless."

Like Jessica's son, odds are your children will graduate from high school without being taught basic money lessons, including how to create a budget or write a check. Only 13 states require high school students to take a personal-finance class to graduate, according a survey released in March by the nonprofit Council for Economic Education (CEE). And although the recession has raised awareness about economic issues, it appears those heightened concerns have only prompted a few states to require a personal-finance class.

Interest is there, opportunity is not. An interest in personal finance among high school students doesn't appear to be the issue. A recent poll by Sallie Mae found that 84 percent of high school students desire more financial education. Among 16- to 18-year-olds, 86 percent said they would rather learn about money management in the classroom than make financial mistakes in the real world, according to a 2011 survey by investment bank Charles Schwab.

Parents have also expressed concerns over their children's lack of financial knowledge. According to an August survey by MasterCard, 64 percent of parents with college-bound children are worried about their children's ability to manage money.

A number of high schools appear to be doing the bare minimum to educate students about personal finance, says Ted Beck, who serves as chairman of the Jump$tart Coalition for Personal Financial Literacy, which trains teachers on how to instruct classes on personal finance. Beck also heads up the National Endowment for Financial Education (NEFE), a nonprofit that provides teachers with personal-finance training tools and the public with financial-education resources on its website, Nefe.org. He says many schools bring in guest speakers, but that it's not enough. "You can't learn a language in two hours, so having a two-hour visitor coming in to talk about money really doesn't provide the students with what they need," he says.

Nan Morrison, president and chief executive of the CEE, says state governments are so focused on teaching the core subjects of math and English that personal finance often gets overlooked. "If you can't read and you can't count, all bets are off," she says. She adds that many cash-strapped states lack the funding to institute a personal-finance course.

Conflicting viewpoints within a state's bureaucracy can also be an obstacle, says Maryland Comptroller Peter Franchot. Franchot is the key proponent behind a petition drive for the Maryland General Assembly to pass a bill in 2012 that would require all Maryland high school students to complete a standalone course in financial literacy to graduate. He says the state's current approach, which involves incorporating personal finance into other courses, is ineffective. "Embedding of financial literacy in classes is just a sop to avoid this issue, and it's developed by the education bureaucracy as a way to control their turf. That's why I haven't been able to get it through the legislature," he says. "Ultimately we will have it in Maryland, but you kind of have to drag the bureaucracy into it kicking and screaming."