Elizabeth Skardon, an 18-year-old senior at St. Andrew's Priory School, is saving pennies now from a part-time job at the Navy Exchange's Outdoor Living Center so that she can finance big dreams later.

Skardon, who wants to go to the U.S. Naval Academy to become a surface warfare officer, is one in a class of Priory students who are on a mission to learn how to manage their money.

“;Right now my main goal is to save money for college,”; said Skardon. “;I'm putting away half of each paycheck because it pays to pay yourself.”;

Prior to taking Lilia Kozuma's personal finance class, Skardon said she knew little about managing money. Now she's making the grade by saving $300 a month for college.

“;I want to be prepared for when I'm on my own next year,”; Skardon said.

Kozuma, who has taught personal finance for three years, hopes all her students will set similar goals.

“;The kids are more sheltered than I was when I was growing up,”; Kozuma said. “;Their parents take care of more for them than my parents did for me, so a lot of them are shocked by what they learn in class.”;

While some of Kozuma's personal finance students like Skardon earn their own money and know how to save, others have no idea how to do that or the difference between a debit card or a credit card, she said.

“;Many of them don't know the value of money,”; Kozuma said.

Kozuma, originally from Oregon, shares personal experiences with her students. As a college student in Hawaii, Kozuma used tips she learned from a high school personal finance class to manage additional expenses.

“;I went from a place where everything was cheap and there was no sales tax to an expensive place where I had to manage my money,”; she said.

Sadly, few U.S. college students are as prepared to take on the world as Kozuma was or as she hopes her students will be when they are on their own. According to the Jump$tart Coalition for Personal Finance Literacy, the average student who graduates from high school is a formidable economic force but lacks personal finance know-how. The U.S. Census Bureau's latest report estimated teen spending power at $216.3 billion; however, according to the coalition, many cannot balance a checkbook, and most have no insight into how to earn, spend, save or invest money.

The coalition's survey of financial literacy among high school seniors fell to its lowest level last year. In an effort to turn these statistics around, top financial regulators and members of Jump$tart visited select elementary schools around the nation last month to share advice on saving, spending and sharing money.

“;While we are experiencing a financial crisis that's one of the worst in decades, the financial literacy of high school students has fallen to its lowest level ever, with 73.9 percent of students failing Jump$tart's 2008 national survey,”; said Securities and Exchange Commission Chairman Mary L. Schapiro in a press release. “;Teaching children about money is an investment in the future because an investment in financial literacy can pay a lifetime of dividends.”;

If children do not learn about personal finance before they hit college, statistics show that they can make mistakes that last a lifetime, said Joanna Amberger, chief executive officer of Honolulu-based 3 Financial Group.

Even in the midst of last year's credit freeze, college students used more credit this year than ever before, according to Sallie Mae, which manages $192 billion in education loans. The company used interviews with a randomly selected group of 1,200 student loan applicants and 5,800 undergraduates to compile its 2009 credit card study.

Sallie Mae reported this year that 84 percent of all undergraduates had at least one credit card as compared with 76 percent in 2004, the date of the last study.

“;Too many students are at risk of overpaying for college by pulling out credit cards to pay for textbooks or even part of their tuition bill, instead of using less expensive financial aid to cover these items,”; said Marie O'Malley, director of consumer research for Sallie Mae, in a press release.

The average college student in 2009 had more than four credit cards with a mean balance of $3,173, the highest of any other Sallie Mae credit card study.

“;Students and families need to build a comprehensive budget ahead of time to cover not only tuition, but also other necessities like supplies and travel costs that contribute to the overall cost of college,”; O'Malley said.

Given these statistics, it's not surprising that the Young Americans Center for Financial Education reported that the number of young adults age 18 to 24 who filed for personal bankruptcy has increased 96 percent in the past 10 years.

More financial education is needed for high school and college students; 84 percent of undergraduates told Sallie Mae that they want more education on financial management, and 64 percent said they would have liked to receive it in high school.

A third of Sallie Mae respondents said that they had never or only rarely discussed credit cards with parents and, as such, were more likely to pay for tuition with a credit card and be surprised at the balance when they got the invoice.

Amberger offers workshops teaching parents how to financially prepare keiki for the future.

“;Studies show that children who exit college with debt are more likely to delay buying a house, getting married or having children,”; Amberger said.

Yet, in general, U.S. kids lack financial education, she said. Nearly 80 percent of U.S. kids have not discussed a budget prior to heading off to college, and as many as 64 percent of them would fail a basic financial test, Amberger said, citing statistics from a survey of high-schoolers by insurer USAA.

“;There is really a disparity between what parents think that they are teaching their kids and what their kids are actually getting,”; she said.

While 70 percent of parents surveyed by USAA said that they had talked to their kids about finance, 66 percent of their kids said that their parents had not covered how to use credit wisely, Amberger said.

Parents can start bucking the trend early, she said. Children as young as 5 can begin learning how to save, Amberger said.

“;Every time that they receive money, teach them to save some of it,”; she said.

As children get older, parents can teach them the value of saving by showing them how money starts to earn money on its own over time, Amberger said. Parents can encourage saving by paying their children interest or setting up a savings match, she said.

“;You can tell your child, every time you put money in your account, I'll match it, but you have to leave it there for three to six months,”; Amberger said.

School shopping is an opportunity to teach older children how to spend wisely, she said.

“;Sit down with them and make a list of things to be purchased, and then set a reasonable budget,”; Amberger said. “;Let the child make their own choices, but set rules like they have to buy everything on the list and save receipts.”;

In addition to teaching keiki about spending money wisely and saving, it's also important to cover investing, she said.

“;Investing lessons should start at 10 or older,”; Amberger said. “;Investing is a really big topic that can take a long time to learn.”;

Sites like www. oneshare.com, where stock prices range from $12 to $1,224 per share, are great ways to teach children about stocks, she said.

“;They'll send you a certificate that you can put on the wall to serve as a visual reminder that the child owns this stock,”; Amberger said.

And, if all goes well, hopefully, the stock will grow along with the child, she said.

AS TIME GOES BY

Here are some easy ways to teach your kids financial literacy using methods appropriate to their age.

AGE 5

» Pay 5 percent interest each week on a jar of pennies to encourage young children to save. It won't be long before their pennies become quarters.

» Any time young children receive a gift of money, encourage them to make saving a portion of it a habit.

AGE 10 AND UP

» Take your child to the bank to open a savings account. Teach them how to read the statements and talk to tellers.

» Set up a savings match. Offer to match a portion of your child's savings if they will consent not to spend the money for a period of time like three to six months.

» Include your child in family budget talks when appropriate.

» Use specific events like back-to-school shopping to let them learn to budget. Set a budget and let them make purchasing decisions; however, make sure to collect the receipts so that you can exercise discretion.

» Buy a single share of stock at http://www.oneshare.com for your child in a company such as Disney or Gap.

TEENS

» Encourage them to help fund their own purchases with earnings from a part-time job or chores.

» Help them set up savings goals so that they can learn how to save and budget.

» If they want to buy big-ticket items, help them learn how to research so that they get the best product for the best price.

» Encourage them to reduce college costs by getting good grades and applying for scholarships.

» Explain to them that taking high school advanced placement classes and scoring well on the exam will help them save money and earn free college credit.

» I nclude them in discussions about paying for college. If you plan to help them with college expenses, let them know what you are able to contribute. If you do not plan on paying for their college expenses, help them find ways to fund it themselves through scholarships, grants, loans or work.

» If they don't want to go to college, make sure that they have the proper training to get a good job.

COLLEGE

» Help them shop for college loans and credit cards.

» Teach them how to identify the best loan and credit card terms and conditions.

» Make sure they know how to budget and shop for everything from food to personal care items and entertainment.

» Teach them about the importance of balancing their bank accounts and the dangers of using overdraft.

» Help them set realistic goals and begin budgeting for the next stage of their life, be it living and working on their own, marriage, buying a house, having children or saving for retirement.

Source: Joanna Amberger

IF YOU DON'T TEACH THEM NOW ...

Many college students seem to use credit cards to live beyond their means—not just for convenience—and more than three-fourths incurred finance charges by carrying a monthly balance, according to a recent study from Sallie Mae. The study found that:

» Sixty percent experienced surprise at how high their balance had reached, and 40 percent said they have charged items knowing they did not have the money to pay the bill.
» Only 17 percent said they regularly paid off all cards each month, and another 1 percent had parents, a spouse or other family members paying the bill. The remaining 82 percent carried balances and thus incurred finance charges each month.

Source: Sallie Mae

SMALL SAVINGS CAN ADD UP

Teach your children that compound interest, or the interest that they earn on interest, can help them grow small amounts of money into big savings over time. Use this graphic to show them that the buying and savings decisions that they are making will determine their future.