Teach Our Children Well It's never too early to educate kids about money.
By Jean Sherman Chatzky

(MONEY Magazine) – When it comes to teaching kids about money, America has a problem. It's not just that the majority--85% of high school students, at last count--aren't getting any school-based personal-finance education. It's also that what education there is seems to be having little impact. Take a look at the most recent survey from the JumpStart Coalition for Personal Financial Literacy, a group founded in 1997 to promote personal-finance education. That year, JumpStart asked high school seniors 31 multiple-choice questions about saving, spending, insurance, investing and credit. The average student got 57% right. Three years later, the average score fell to 52%. This year, the average was 50%. Worse, notes JumpStart director Dara Duguay, seniors who had completed a money-management course answered 48% correctly.

What's wrong? I recently attended a JumpStart training session for high school teachers, and I came away with these theories about why our system is failing.

Personal-finance education doesn't have a home. In some high schools, money management is taught in consumer economics (what's replaced home ec); in others, economics or social studies; in yet others, math. The upshot is that not all students are included. Economics and consumer economics are often electives. When personal finance is part of the math curriculum, it's generally taught in low-level classes. According to Jim Rubillo, executive director of the National Association of Teachers of Mathematics, that means the more gifted students can miss out. They're too busy with calculus. Unfortunately, they're also likely to be the ones struggling with hefty student loans.

High school--even middle school--is too late. By high school, kids are being primed for standardized tests and their hormones are raging. More important, their money habits are already set. According to Teenage Research Associates, a Northbrook, Ill. market research firm, 16- and 17-year-olds spend, on average, $153 a week, 7% have a credit card in their own name, and 18% have access to a parent's card. It's a little like trying to teach teens about sex--research has shown that you can better mold kids' behavior if you reach them before they start to practice.

Susan Beacham, a former private banker and mother of two, is trying to do just that. She has developed a curriculum to teach first- and second-graders about money. Her tool is the Money Savvy Pig--a see-through bank with slots for saving, spending, investing and donating. If it sounds basic, it is. I recently took Beacham's curriculum (www.moneysavvygeneration.com), a box of pigs and several hundred pennies to my son's second-grade class. With the exception of investing, which seemed tough to grasp in such a short time, the kids got it. Eight-year-old Stephanie Barrett (clearly a future CFO) even explained--in detail--how interest works.

Talking to kids about money when they're young is nonthreatening, Beacham explains. When you're dealing with dimes and quarters instead of $10s and $20s, the mistakes are less costly. Will it improve financial literacy scores when they're teens? It's too early to tell. But let's test the waters. The Money Savvy Pig may not be the solution. But it has to be an improvement over the education we're giving kids now.

Editor-at-large Jean Chatzky appears regularly on NBC's Today. You can contact her by e-mail at moneytalk@moneymail.com.