American Kids are Not So Good at Financial Literacy

I saw this on my local news website.

A globally-administered financial literacy test by the Organization for Economic Cooperation and Development (OECD) was given to 15-year-olds around the world in 18 different countries.  The results shows just what a dismal job our well-funded public education system is doing at teaching our young students the basic academic skills they need to succeed in later life as adults.

Hmmm. What’s the one academic subject area where you would expect students to begin learning the basic financial skills they will need when they grow up?


And what’s the one academic subject area where, given all the money spent on public education textbooks and curricula, things just don’t seem to add up?

Math again.

Reason number five hundred and eighty-six to homeschool your kids!

The results don’t surprise me.  In fact, the results don’t surprise anybody.  Read the various news stories online where education and financial specialists are asked to comment on the results.

You’ll notice that none of them say, “I’m shocked. Shocked, I tell you!  Our public schools do such a fine job of training up our youngsters in the fields of math, science, history and pretty much everything else.  There must be some mistake.  Surely the testing methodology is flawed!  Surely they cherry-picked the China students! (And the Estonia students. And the Latvia students…).”

Sorry, that’s just not the case.  To use an overly-used but appropriate observation, it is what it is.


For those fifteen-year-olds (who are now seventeen) who didn’t do so well on this financial literacy test, they will have to seek remedial educational help somewhere.

For the five-year-olds, and seven- and ten- and twelve-year-olds who have not yet reached that crisis level of mediocrity — and are not currently trapped in the abysmal education gulag system — there is a lot we can do to prevent their financial demise later on.


If those American fifteen-year-olds had only either home-schooled or at least used a high-quality mathematics program in their school like, say, Saxon Math, they could have beat the interest-bearing pants off those Shanghai-Chinese students!

And if they had started with Ray’s Arithmetic early on, there is no question they would have earned top scores with both eyes closed and both hands tied behind their back.

Have you noticed how early in Ray’s books you begin seeing money-related math problems?

Lesson Eleven (XI) in the Primary Arithmetic book, word problem number ONE!

1. Francis had 2 cents, and his mother gave him 1 cent more: how many had he then?

SOLUTION.–Francis had then 2 cents and 1 cent, which are 3 cents.

Keep in mind, this comes very early in the K-2 volume.   So, a four- or five-year-old is learning about money and computation right from the get-go.

In fact, all three of the lower-level Ray’s math books–Primary, Intellectual and Practical–are loaded with word problems dealing with financial transactions.  Literally hundreds.  By the time a student gets through with the Practical Arithmetic book (5-6), he will have dealt with money matters, including principal, interest, loans, business transactions, currency, unit conversions, etc., hundreds of times!

That is why the Ray’s Arithmetic books were in print for so many years–decades–and went through several editions, and were in use in so many public and private schools from the mid-to-late 19th-century up until the early 20th century.

They got the job done thoroughly and effectively–and, even in 19th century money, cheaply!

Can you think of a better and more economical way of dealing with the critical mathematics–let alone financial–literacy deficit that exists in our country now?

Incidentally, Malcolm Gladwell has made some very interesting observations as to why certain provinces in China do better at math and science than their American–and even some of their other provincial Chinese–counterparts.  I won’t be a spoiler–you can read them in his excellent book, Outliers: the Story of Success.

You can read two more perspectives on this latest (but long-standing) financial bad-news story here (Huffington Post) and here (The Economist).

Then, come back here for the SOLUTION!

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