Financial literacy in schools

SAN DIEGO (KUSI) – California is failing to educate its students about financial literacy and its likely students will suffer from that lack of knowledge at every stage of their lives.

Students receive little, if any, personal finance training in K-12 schools. It’s simply not part of state standards.

The Center for Financial Literacy graded the 50 states two years ago and California was among 11 states that got an F.

Without a basic understanding of finances, students fail to understand the difference between wants and needs. Governor Jerry Brown once said the very same thing to legislators during the budget process.

The recession is a perfect example of why financial literacy is so important.

But there will continue to be a repeat of bankruptcy and foreclosures unless financial literacy is a requirement in state educational standards. It hasn’t been, which is why California got an F.

"That should be a sobering statistic to us to wake up and say this is not acceptable," said Jacqui Pernicao, the COO of Junior Achievement of San Diego County, whose mission is to do what the state is failing to do, teach financial literacy.

"Nearly 60 percent of our young people don’t feel that by the age of 24 they will be financially sound, they’ll be able to function on their own financially," she said. "We teach the students how to get a job, how to manage their money, how to start a business if that’s what they choose."
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Unfortunately, students are not learning these skills at home or at school, so the private sector has filled the void with volunteers. They go into the classrooms and teach what the teachers have not been trained to do.

Less than 20 percent of teenagers know what a 401K Plan is and less than a third understand interest rates or inflation. One if five, age 18 to 24, have declared bankruptcy.

California has passed a law requiring school districts to offer a course in economics that may include personal finance, but it’s on a voluntary basis.