What Do You Know About Money?
In a recent test of basic economic principles administered to over 1000 adults and 1000 high school students by the National Council on Economic Education (NCEE), the average American grade was a big, fat F. A similar test in 1997 showed that high school students' understanding of basic personal finance was equally dismal. Young adults are leaving school without the ability to make informed financial decisions.
Sure, economics sounds boring. But the practical application of economics is personal finance, or financial planning, which is the basis for critical decisions faced by each of us in our daily lives.
The Jumpstart Coalition for Personal Financial Literacy, which seeks to improve the financial literacy of young adults, says that the average high school graduate "lacks basic skills in the management of personal financial affairs. Many are unable to balance a checkbook and...have no insight into the basic survival principles involved with earning, spending, saving and investing."
The Coalition goes on to say: "Many young people fail in the management of their first consumer credit experience, establish bad financial management habits, and stumble through their lives learning by trial and error."
Although economics is taught in over 40 states, economics classes are mandatory for students in just 13 states. Only two states require a course in personal finance. Excellent education materials have been developed that make economics come alive in the classroom at every grade level, but since school curriculum is determined on a state and local level, a grass-roots effort by parents is needed to lobby for mandatory economics classes.
| "To help all students develop economic ways of thinking and problem solving that they can use in their lives as consumers, savers, members of the work force, responsible citizens, and effective participants in the global economy." |
The NCEE is the organizer and driving force in developing the National Voluntary Standards in Economics, 20 standards that economists, business leaders, and educators think everyone should know about economics. (To learn about the status of economic education in your state, you can view a .pdf file from the NCEE.)
Do you dare to take the test that was flunked by half of those who took it? You can test your knowledge of basic economics at the NCEE's Web site. This 20 question test will only take you a few minutes to complete, and it may be a real eye opener. Have your teenagers take the test too, and if the results cause concern, contact your state Jumpstart Coalition office or your state Economic Education Council to see what you can do to help improve the quality of economics education in your state.
