American high school sophomores spend their time learning chemistry, calculus and anatomy, but in practical matters of money they don’t fit the bill.

Ranking well behind Chinese, Estonian and Australian students in financial literacy, new research says over 60 percent of American teens don’t know how to approach basic financial problems.

The Organization for Economic Co-operation and Development tested the financial literacy of 15-year-olds in 18 countries, asking them to do basic financial math. The test included things like balancing checkbooks, looking for potential fraudulent charges in a bank statement and creating a monthly budget.

Michael Davidson, head of OECD childhood and schools division, said, “What the study shows is that 60 percent of American students across the country don’t perform to a level that we would consider necessary in order to be successful later in life.”
Davidson said that because teens are becoming increasingly involved in financial decision-making situations, financial education is “paramount” to a stable economic future.

JumpStart Coalition for Personal Financial Literacy reported that one in three American high school seniors have credit cards and half of these teens have credit cards solely in their names. This number jumps to over half by the age of 19.

“Controversy surrounds teen credit card use,” Dana Sundbald wrote for Love to Know. “Some people argue that credit cards teach teenagers to be financially responsible, but teen credit card debt statistics indicate an opposing reality. Statistics show that credit cards do not encourage self-restraint in teens. Some may argue that through the use of credit cards, teenagers don't learn how to say no to themselves. Instead, credit cards promote the 'spend now and deal with the consequences later' mindset.”

Nellie Mae, a college loan provider, reported these teenagers with credit cards bring an average of $1,585 in credit card debt to their first year of college.

“With money management the buzz phrase of post-recession America,” the Atlantic’s Emily Richmond wrote, “there’s an increasing push from both the public and private sector to make sure the nation’s young people are taught the fiscal smarts to make wise decisions for themselves on everything from living within a budget to savings accounts to college loans.”

Some legislators and educators are arguing that it’s time to put financial literacy above algebraic literacy in high school math departments. But critics of that solution cite JumpStart Coalition for Personal Financial Literacy surveys that have shown that students who take one semester of financial literacy courses do not score significantly better than those who don’t. Additionally, research has shown that much like cases of algebra or chemistry, most adults don’t retain the information they receive in high school.

“Financial literacy has to be taught consistently and from a young age,” Davidson said. “And it is not a subject parents can leave to teachers. Responsible decisions have to be made by parents on behalf of their children. Teach your teens about the basics and avoid getting them credit cards.”

EMAIL: nshepard@deseretnews.com Twitter: @NicoleEShepard