Chinese teens beat U.S. peers in money smarts

The college test that America fails
The college test that America fails

Chinese teenagers in Shanghai know more about money than American kids. So do teens in Estonia.

In fact, in a recent test that measured financial literacy of 15 year olds, U.S. teens ranked in the middle of the pack, alongside Russia and Latvia.

The test, administered by the OECD, tested knowledge of everything from banking and taxes to how interest rates work, and was given to 29,000 students in 18 countries in 2012, in conjunction with a more widespread international assessment of math, science and reading (called the Program for International Student Assessment).

Related: Are you a better investor than a 13-year-old?

A sample question, for example, quizzes students on how to read a pay slip. In order to answer correctly, a student would have to know the difference between gross and net pay (or the difference between pay before and after deductions, like taxes).

Nearly 20% of U.S. students didn't even reach the baseline level of proficiency, "or the basic skills that are needed for success later in life," according to Michael Davidson, head of early childhood education at the OECD.

Chinese students scored the highest, with more than half of students labeled as top performers.

But it's important to note that the only Chinese students tested were in the country's largest and wealthier city of Shanghai, a distinction that has drawn controversy in the past.

Other top-ranking countries included Belgium, Estonia, Australia and New Zealand.

Related: Chinese students found cheating to get into U.S. colleges

In the United States, there is no national standard for financial education, with requirements and programs varying widely across the country.

By contrast, in Australia financial literacy lessons are included within math, English and science courses, while Estonian teacher training includes education on financial literacy issues.

"If we want to have young people who are globally competitive in 20 years, having a good solid basis of understanding their financial lives early is important," said Ted Beck, president of the nonprofit National Endowment for Financial Education. "This should be a national priority."

Personal Finance

LendingTree

CNNMoney Sponsors