True or false: A credit-card holder who pays only the minimum amount on monthly card balances will pay more in annual finance charges than one who pays the balance in full. If you are a high school senior and your answer was true, which is the correct response, consider yourself in the minority. Only 48 percent of high school seniors who responded to a 2008 national survey correctly said credit-card holders should pay monthly balances in full.
This and other surveys showing American students' poor grasp of personal finance have prompted some schools in recent years to focus on financial literacy education. The question that many of the movement's supporters are now asking is whether more schools will use the nation's economic crisis as a teachable moment. Should schools carve out time to teach kids everything from how to balance a checkbook to how to respond to dozens of credit-card offers in college? As it is, schools are already struggling to cram so many requirements into the school day.
According to The Jump$tart Coalition, a national organization that promotes financial literacy education, only three states have made personal finance courses a requirement in schools; public school students in Utah, Missouri, and Tennessee must take at least a one-semester finance course. Seventeen other states say their schools fold personal finance lessons into regularly taught subject areas. In the rest of the country, schools either offer these classes as electives or not at all.
U.S. Education Secretary Arne Duncan might tilt the balance and encourage more states to make financial literacy education a priority. Early on in his career in Chicago, he led a push to open a public elementary school centered around a financial literacy curriculum. In his new role, he sometimes has stressed the importance of teaching kids money-management skills in the same conversation about preparing successful high school graduates.
Tell us what you think. Should schools devote time to educate children on personal finance? Or is that parents' responsibility?