Schools must begin addressing America's financial illiteracy

Why does the school system require classes such as math, English and science, but not basic personal finance?

We force students to learn trigonometry, yet how many of us ever use it again after graduation? In contrast, how many transactions involving money will we each conduct on a daily basis for the rest of our lives?

Think about each time you purchase something with a credit card, make a car payment, reconcile your bank account or pay taxes. Even though these transactions are a daily occurrence for most consumers, we receive very little financial education on them from our school system, or even our parents.

Now think about how huge a decision it is to rent or purchase a home, apply for a loan or mortgage, make a contribution to your IRA or 401(k), shop for insurance or get married. How do we expect to make wise financial decisions when we have little education on even the basics?

According to a 2007 survey commissioned by the National Council on Economic Education, only seven states currently require high school students to receive financial education in the school system. What about the other 43 states?

We need look no further than the daily news headlines about the mortgage meltdown, the stock market crisis, the housing slump or the rising cost of oil to see how relevant financial literacy is.

Rather than waiting for the system to correct itself, we need to educate our future generations to make smarter financial decisions.

Just 20 years ago, personal finance was significantly less complex than it is today, and in many cases, parents supplemented what the schools did not teach.

Fast forward to present day, and we now have hundreds of different home mortgage options and the burden of retirement planning is shifting from the government and traditional company pension plans to consumers through investment vehicles such as IRAs and 401(k)s.

Because of their own financial woes, in many cases, parents are no longer comfortable with talking to their children about the touchy subject of money and personal finance.

Sadly, research shows that financial illiteracy has reached epidemic levels with no end in sight.

Much has been done to bring awareness to other growing crises, such as childhood obesity, the need to wear sunscreen and the dangers of drug and alcohol abuse, but why has something as important as financial literacy been largely ignored?