It is the rare high school student who can get interested in planning for retirement, but managing cell phone expenses? Now you're talking.
The U.S. Departments of Education and Treasury are teaming up with educators around the country to encourage teenagers to get smart about short-term money matters, say, the cell phone bill, so they can take control of the long-term challenges – saving for college, for example.
The program is called the National Financial Capability Challenge, and the idea is to teach high school students the basics of personal finance: saving, budgeting, and investing. Students can test their knowledge through an online exam, offered through April 8, and the top-scoring students will be honored at a national awards ceremony in Washington, D.C. The educators and students who place in the top 20 percent nationwide will receive official award certificates.
Teachers can help by preparing their students for the 30-minute exam through study materials and lesson plans offered online at www.challenge.treas.gov. Teachers are also encouraged to share their ideas on effective ways to teach financial literacy to teens.
"We have a long way to go in this country before students in this country are financially literate," Matt Yale, deputy chief of staff at the Department of Education told Reuters. "This isn't like U.S. history – everyone learns U.S. history. This is a topic that's almost taboo because nobody wants to talk about it."
Yale said that many parents are uncomfortable talking about money, and school schedules allow little time for financial literacy. The result is teens don't know how a credit card works or what a 401(k) is.
Here are two sample questions on the exam. More examples are available on the Challenge Web site
1. Carolina has $5,000 saved from working at different jobs. She puts her money in a savings account that pays 4 percent per year in interest. How much money will be in her account at the end of the first year and at the end of the second year?
A. End of first year: $5,100; end of second year: $5,400.
B. End of first year: $5,200; end of second year: $5,400.
C. End of first year: $5,200; end of second year: $5,408.
D. I don't know.
2. Marco went to the grocery store to buy a box of cereal. The type of cereal he liked came in three different brands and three different size boxes. To select the brand and the box with the lowest unit cost, he should look at the:
A. largest cereal box on the shelf.
B. most popular brand of cereal.
C. price per ounce of cereal in each box.
D. I don't know.
The program attracted more than 76,000 students and 2,500 educators last year. States with the highest scores were Idaho, South Dakota, Wyoming, Oregon, and Utah. Learn more or register for this year