Senator Allison Copening
April 13, 2009

If there is one thing these difficult economic times have taught us, it is an important lesson about the value of financial literacy.  Complex financial decisions play a greater part in adult life than they have been in the past.  It is our moral responsibility to prepare our youth for their adult life, and in these times, that includes basic principles of finance.  That’s why I am sponsoring SB 317, legislation which would require Nevada schools to educate our youth on the basics of navigating the financial system, including managing a mortgage, understanding credit principles, and balancing personal budgets. Senate Bill 317 also provides that a pupil must demonstrate satisfactory completion of the instruction in financial literacy by passing an exam before receiving a diploma.

In January 2008, the President’s Advisory Council on Financial Literacy was formed. The Advisory Council’s charge is to improve financial literacy among all Americans, including schoolchildren. After a year of work, the Council concluded that while there are many causes of the economic problems facing the country, a lack of financial literacy is undeniably a contributing factor.

The Council further concluded that, by almost any measure, today’s schoolchildren are ill-equipped by our education system to understand personal finance and make their way in the modern financial world. Research shows that teens and young adults, including college students, do not know enough about personal finance.  Their rising debt and debt problems, along with little inclination to save are thought to contribute to poor performance among teenagers taking the Survey of Financial Literacy.  The results were shocking. Of those taking the survey, participants got an average of only 48.3% of the test questions correct—a failing grade.

Among the results of the test:

• Only 51% knew how to write a check;
• Only 34% could balance a checkbook;
• Just 26% knew how credit card fees worked; and
• Only 24% knew whether a check-cashing service is a good thing or a bad   thing to use.

\The JumpStart Coalition further stated that many young people fail in the management of their first consumer credit experience, establish bad financial management habits, and stumble through their lives learning by trial and error.

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December 31, 2009