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When and how did you learn about credit cards and credit scores? Did your parents teach you; did they lead by example; did you take a course; or did you learn by trial and error? What does just paying the minimum payment each month really mean in the long-term? April is National Financial Literacy Month and an opportunity to examine school’s role in educating young Americans when it comes to financial decision-making.

I did not have much exposure to financial education during my high school experience, but I was fortunate enough to learn a great deal from my mother and to have her support my navigation of the college financial aid process. Since graduation, I’ve also participated in a number of seminars, all of which  have proven tremendously helpful when it comes to my own financial decisions about higher education, home ownership, savings and investments and planning for retirement. It makes me wonder what decisions and mistakes I would have made without that enhanced understanding.

While there is no one exact definition of financial literacy, the Jumpstart Campaign for Personal Financial Literacy defines it as: “the ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security.” A number of Learning First Alliance (LFA) member organizations recognize the importance of financial literacy for the nation’s youth. Denise Khaalid, a South Carolina high school teacher, was recently recognized as the 2012 NASSP/Vicro Assistant Principal of the Year. Among her many accomplishments, she partnered with an area credit union to offer financial literacy courses for her students.  In August 2010, Gerald Lauber wrote “A Case for Teaching Financial Literacy,” for The School Administrator, a publication by the American Association of School Administrators (AASA). He argued that financial literacy information should be integrated into existing curricula and that teachers need support to “develop thinking strategies and make learning relevant to the needs of today’s students.”

In addition to being incorporated into existing curricula, financial literacy education could consist of a structured course over a semester or a year and as well as other options that are less resource intensive. Offering the content to students, perhaps through partnership with a local financial literacy institution or (following Denise’s example) a credit union, would be a good start. A second option might be to partner with community financial organizations to provide seminars a few nights a year, for entire families to attend – parents and children alike. As an audience, parents may learn valuable information themselves, as well as how to better support their children in life decisions outside the school environment.  Younger students with an allowance or summer job are a perfect audience to learn the basics of budgeting and checking accounts.  High school juniors and seniors could learn about credit cards and credit scores, as well as loans – whether for college, starting their own business venture or purchasing a car. Basic financial mistakes can be avoided with the appropriate educational opportunity such as missing a payment or running up unnecessary fees because  a bank notification  in the mail was left unopened.

Ultimately, financial literacy courses offer a unique opportunity to teach to the real world. Too often, teachers and parents complain about teaching to the test – multiple choice booklets with hundreds of bubbles. Gaining financial literacy is a real life test that schools should be proud to teach to; in teaching the material and critical thinking skills, they are empowering students to make sound life decisions when it comes to money management. Students aren’t measured by a letter grade or passing percentage, but by how well they manage debt, spending and saving, investments and planning for retirement. It is about quality of life.

In the 21^st Century, being financially literate is a key skill, and our country’s economic stability depends in large part on how responsibly future generations manage their assets and understand the financial system. In 2006, when the economic climate appeared relatively rosy, a National Association of State Boards of Education (NASBE) study “Who Will Own Our Children” concluded that most Americans did not possess the knowledge and skills needed to properly manage their finances. As we struggle to recover from the 2008 economic meltdown, Americans remain hobbled by cumulative loss and debt: credit cards, homes, retirement savings and jobs. Financial literacy is more important than ever, as future generations face decreasing pensions, job opportunities, earnings, and overall economic insecurity. However, as the American School Board Journal, a publication of the National School Boards Association (NSBA), points out, “while just about everyone can agree that an informed citizenry, especially in the areas of money management, is necessary for a functioning society and government, not everyone agrees on whose responsibility that is.” Schools can certainly play a role in providing access to the financial literacy courses that are an essential service for our democratic and fiscal health.