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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Beck sees the same tug-of-war in states throughout the country. "You can't wave a wand and say, 'Every school must teach this now,'" he says.

Franchot adds that many state officials who oppose the bill cite funding costs as their biggest concern. However, he points out that Maryland's Carroll County, which chose independently to implement a standalone financial literacy course for all eight of its high schools, did so with just $37,700. The only recurring cost is $325 per teacher for a one-time training course, Franchot says. "The idea that you have to hire a bunch of new teachers and incur all sorts of new textbook costs and other sorts of expenses just isn't true," he says.

Discomfort among teachers and parents. Although Carroll County's training course was a minimal expense, Beck says getting teachers to feel comfortable teaching the subject may be a bigger challenge. If teachers provide students with misinformation about the dos and don'ts of personal finance, it can have serious implications on their livelihood. Approximately 64 percent of Wisconsin teachers surveyed by the University of Wisconsin—Madison said they felt unqualified to address the state's financial literacy standards, and few felt "very competent" lecturing a class on topics such as risk management and debt. But more than 70 percent of teachers polled in a nationwide NEFE survey said they are willing to receive formal financial-education training to teach a financial literacy class.

Many parents are also uncomfortable with teaching their kids about money management. David Bruzzese, who coauthored the book The Teen's Guide to Personal Finance: Basic Concepts in Personal Finance that Every Teen Should Know with Joshua Holmberg, chalks it up to parents lacking confidence in their own financial knowledge. He says many parents haven't learned critical financial values themselves, so teaching their children may do more harm than good. "Parents may be passing along bad financial habits to their kids because that's all they know," Bruzzese says.

Morrison of the CEE agrees: "To say it's a parent's responsibility seems unfair—unfair to the parents and unfair to the kids. You can't ask people to be responsible for teaching something if they haven't received the education themselves."

Consequently, money is among the lowest priorities in conversations between parents and their children—below talks about the importance of good manners and the benefits of good eating habits, according to a survey by Harris Interactive released in August.

So what role should parents play in teaching their children about money? Bruzzese says parents don't necessarily need to impart financial lessons to their children, but they should encourage discussions about the topic. Beck of NEFE agrees: "This should be a discussion, not a lecture," he says. "You want to make sure it's a comfortable thing to talk about around the dinner table."

While parents may not need to teach their children about advanced subjects like 401(k)s and mutual funds, they can teach the basics, such as the difference between wants and needs. Another important concept is learning how to apply the time value of money. "Not spending $1.50 a day on a soda can have a big impact on a person's financial future, and that's something that young kids need to understand," Bruzzese says.

Tamsen Butler, author of The Complete Guide to Personal Finance For Teenagers & College Students, says parents need to be financial role models. "If you're running around and you're buying a luxury car when you can't even afford to buy groceries without a credit card, you're setting a bad example for your kids," she says.

A look inside one personal-finance classroom. Some parents avoid the subject of money altogether. "My parents don't talk about finances whatsoever. The stock market comes up a lot, but that's pretty much the extent of what we talk about," says Jake Gallagher, a junior at Rock Bridge High School in Columbia, Mo.