The Wichita Eagle
By: Jim Graham
June 27, 2010
Our nation's youths must become literate in personal finance and economics if we are to avoid future financial and economic crises. On a basic test of financial literacy, recently administered by the Jump$tart Coalition for Personal Financial Literacy, high school seniors in Kansas correctly answered only about half of the questions.
With a score like that, we haven't earned our gold star. Fifty percent isn't even passing.
Furthermore, this scarcity of financial knowledge among our youths is showing up in more places than just on paper. Think about the teens you know who cannot prepare a budget, who struggle to make correct change and who have handled credit as if it were free money, imprisoning themselves in a jail of debt and interest payments.
Our young people fall short on fundamental economic awareness, such as the impact of education upon one's expected lifetime earnings, the difference between needs and wants, and the realities of limited resources and choices. Such knowledge would open doors for opportunity and encourage responsibility.
The problem has been a long time in the making. We have stood by while economic ignorance and financial irresponsibility have become normal, even acceptable. In doing little to change the status quo, we actually have endorsed a standard far below excellence.
We are doing a disservice to our youths by failing to provide them with the training and understanding they need to be successful as adults.
The solution doesn't have to be impossible, although it will require change and action.
Education is a key to turning in the right direction. Our youths must be taught these concepts and given opportunity to apply what they have learned.
In our state, small progress in economics and financial education has been made. Legislation passed in 2009 will require that financial literacy questions be included in state assessment tests when they are revised (probably in 2014). Yet no state mandate exists for a required course in financial literacy. Few school districts in Kansas even offer a dedicated course in economics or personal finance.
To its credit, the Wichita school district is in the process of implementing a course at the high school level. The intent is to require that all USD 259 high school students successfully complete a personal finance course in order to graduate. It's a good first step.
Still, education in economics and personal finance has not received adequate attention or the widespread public support necessary for implementing changes.
The Kansas Council on Economic Education has been working to support K-12 economics education for 50 years, providing student programs, training for teachers and curriculum resources for schools at no cost. We know that being literate in finance and economics leads to more knowledgeable consumers, wiser savers and investors, better employees and more responsible citizens.
Education is an opportunity -- not to undo what already has occurred financially and economically in our nation, but to proactively learn and correct for future generations.
We do not have to settle for a failing grade.
Jim Graham is president of the Kansas Council on Economic Education at Wichita State University.