06/07/2010 05:12 am ET Updated Nov 17, 2011

High-Schoolers Take the Financial Capability "Challenge"

In a major crisis, our first impulse is to address people's immediate needs. With the Haiti earthquake, that meant providing food and shelter to the victims. In the case of the recent economic recession, the government stepped in by extending unemployment insurance, providing COBRA subsidies and promoting mortgage refinancing guidelines, among many other programs.

Once the dust settles on pressing concerns, a more long-range approach kicks in - we step back and ask questions like, "How did we arrive at this state?" and "How can we keep from making the same mistakes again?"

Part of the solution is to strengthen our financial education programs so that today's youths are better equipped to manage their own finances and avoid the mistakes of their parents. Many studies, including a recent survey commissioned by the Financial Industry Regulatory Authority (FINRA), have shown that young adults display much lower financial literacy than older generations.

Neal Wolin, Deputy Secretary of the U.S. Department of the Treasury, notes, "The government is moving forward with financial reform and strong protection for consumers, but we must also do a better job of making sure our high school students graduate with a better understanding of basic economics, basic finance and the benefits and risks associated with debt."

In that spirit, the Departments of Treasury and Education jointly launched the National Financial Capability Challenge, a nationwide award program aimed at increasing the financial knowledge and capability of high school-aged students. The Challenge inspires students to take control of their financial future by learning more about personal finances and challenges teachers and schools to incorporate important financial information into their curricula.

Across the country, thousands of teachers, schools, home-school parents, youth group leaders and others were recruited to enroll and prepare their students for the program. Educators were provided with a free educational toolkit that includes ready-to-use lesson plans, and were encouraged to use other existing resources or to create their own innovative approaches to teaching these important subjects.

The Challenge, which wraps up in April, culminates in a voluntary, 30-minute online exam. The top two scorers at each school, as well as all students who score in the top 20 percent, will receive personalized award certificates. Educators from schools and states with the highest participation rates also will be recognized. "We're very pleased by the favorable response we've received, and eagerly await the final exam results," says Wolin.

Numerous other government- and private sector-sponsored financial literacy initiatives are also underway. For example:

  • Building Wealth, a Beginner's Guide to Securing Your Financial Future, developed by the Federal Reserve Bank of Dallas. It includes online interactive and print versions.
  • Money Smart, a Financial Education Program Developed by the Federal Deposit Insurance Corporation, with curricula for adults and young adults.
  • The Jump$tart Coalition, a national coalition of organizations dedicated to improving the financial literacy of kindergarten through college-age youth by providing advocacy, research, standards and educational resources, which offers hundreds of free and low-cost educational materials.
  • My, the U.S. Financial Literacy and Education Commission and Treasury Department's clearinghouse of financial information and consumer alerts for children and adults.
  • Hands on Banking, a free, interactive program from Wells Fargo that teaches financial basics and smart money management skills.
  • Junior Achievement, a worldwide organization whose community volunteers go into the classroom to share their own work experiences and prepare students to enter the workforce through experiential, hands-on programs.
  • You Are Here, a free, animated site offered by the Federal Trade Commission, where 5th through 8th graders can wander through a virtual "mall," playing games and learning key consumer concepts such as the impact of advertising, spotting scams, how to protect personal information, and more.
  • The Financial Literacy & Education Summit 2010 on April 19, 2010, the fourth annual event co-sponsored by the Federal Reserve Bank of Chicago and my employer, Visa Inc. Along with Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, who will deliver opening remarks, participants include: Federal Reserve Bank of Chicago President and CEO Charles Evans; Michelle Greene, the Treasury Department's Deputy Assistant Secretary of Financial Education and Financial Access ; Jennifer Kuperman, Global Head of Corporate Communications, Visa, Inc.; and Roger Espinoza, professional soccer player for Major League Soccer's Kansas City Wizards and the Honduras National Team.
The world of personal finances has become increasingly more complex than the systems our grandparents once navigated. Take advantage of the wealth of financial education tools available to people of all ages, so you - and your kids - will be better able to weather the next financial storm.

This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to your situation and about your individual financial situation.

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