Studies have shown that the number one reason that students leave college is financial stress. Americans in their 20s have an average debt of $45,000. Schools and other organizations are moving to encourage financial literacy in high school students. Investopedia.com offers the ‘Teaching Financial Literacy to Kids’ guide for parents and teachers, whereas authors like Chad Foster have written books to teach financial literacy to teens. The New York Public Library also has a financial literacy campaign, which it plans to expand across the Bronx, Manhattan and Staten Island.
External companies are also contributing to high school financial literacy efforts. Doral Bank, for example, launched a financial literacy program in Florida last year. This year, all 104 members of the 2013 graduating class at the Deane Bozeman School participated in the financial literacy training program sponsored by the Doral Financial subsidiary.
Financial literacy is the ability to make informed and effective money management decisions based on knowledge and skill. Financial literacy has yet to become a priority in the education system. As a result, adults are financially ignorant or irresponsible.
In 2008, the President’s Advisory Council on Financial Literacy wrote: “By almost any measure, today’s school children are ill-equipped to understand personal finance and make their way in the modern financial world. Their rising debt and debt problems, along with their poor inclination to save, substantiate what the test scores show. Meanwhile, most students still graduate from high school without any formal classroom education in personal finance.”
The importance of financial literacy has been recognized by others as well. Federal Reserve System chairman Ben Bernanke said: “One of the key lessons of the recent financial crisis is the importance of personal financial literacy. Besides improving their personal finance decision making, teaching students economic principles will help them as citizens understand and make choices about many of the critical issues confronting our nation.”