Financial Literacy Month?

April 1st marks the start of Financial “Literacy” Month. Ironically, a group of researchers and experts say the month — declared by Congress in 2004 to promote smart money management — should be re-named Financial “Illiteracy” Month. Why? Because financial literacy as it is generally taught does not work.

Just look at student loan debt. According to new data from the U.S. Department of Education, young people are late on over 33 billion dollars’ worth of student loans. That overdue debt is just part of the problem. Many of these young people already have other credit issues that can impact their ability to get a good job, or ultimately buy a home or build a savings and retirement account.

Why isn’t financial literacy education working? Because financial literacy education is largely funded by the very same businesses that prosper when young people make poor money decisions — big banks, credit card companies and other huge financial industry businesses. These businesses are concerned with selling their wares, not in teaching customers to buy something that may be better or cheaper from a competitor or to not incur any debt at all. Too often, financial service businesses prosper when young people buy the wrong product, pay a higher interest rate than necessary, fall for the lure of high-interest credit card debt and impulse buying, or otherwise get injured financially by their lack of financial skills.

If you have trouble believing that conflicted businesses actually rule financial literacy, check out the national corporate sponsors of any financial literacy resource and you will find a rogue’s gallery of companies that profit from money mistakes or have paid heavy fines for committing financial misconduct against their own customers.

This means that financial education tools influenced by these businesses focus mainly on the dry mechanics of money — the difference between a stock and a bond or how interest makes your savings grow. The focus is not on teaching consumers how to be savvy in their financial dealings.

“It’s ironic that financial literacy resources influenced by conflicted businesses will tell you what to do if you’re in trouble with debt. Usually their advice includes a money-making proposition for the business. But these conflicted businesses will completely ignore the reasons you got in debt in the first place,” says Malcolm Kirschenbaum, the president of the FoolProof Foundation. FoolProof was formed with the help of former CBS anchor Walter Cronkite to deal with the problem of ineffective financial literacy education.

“None of the finance industry’s tools teach ‘defensive spending,’” Kirschenbaum adds. “None teach skepticism in financial transactions. None impart the critical need for caution in dealing with any situation that impacts a young person’s financial or personal well-being.”

“Is a credit card company going to support a financial literacy program that teaches kids to pay their credit card bill in full each month?” asks Will deHoo, head of FoolProof’s Walter Cronkite Project. “Is a bank going to sponsor a program that says, ‘Be sure and read about the billions in fines our sponsor has paid for hurting its own customers!’? Of course not.”

Ineffective programs lead to unprepared young people. Even the Federal Reserve Bank of Cleveland came to that conclusion in a major study in 2008: “The literature does not succeed in establishing the extent of the benefit provided by financial education programs, nor does it provide conclusive support that any benefit at all exists,” the study concludes. And the respected Jumpstart Coalition’s annual survey of high school students has consistently shown that financial education does not increase financial knowledge among high school students.

A solution to this ongoing crisis is emerging courtesy of the FoolProof Foundation’sWalter Cronkite Project. The project is offering a financial literacy curriculum that works. It is free, no strings attached — right now, to all teachers and educators. The curriculum is extensive — it offers up to 22 hours of financial literacy training, all turn-key for the teacher/mentor.

The Cronkite curriculum has now been tested by 5000 teachers nationally, and millions of people have looked at the FoolProof curriculum online. Because of its tough, ethical advocacy for young people, the curriculum has become the only financial literacy program in the United States that is endorsed by both the Consumer Federation of America and the National Association of Consumer Advocates. Teachers and other educators can review and test the curriculum immediately, for free

The Cronkite Project has also launched a web-driven version of its curriculum for college-age young people and others with limited financial skills called FoolProof Solo.

Conservatives like to tout personal responsibility as a hallmark of their political philosophy. FoolProof touts the same message: you are ultimately responsible for your financial mistakes and future. FoolProof Foundation programs deliver this tough message: you can learn to protect your rights as a consumer or you can be fleeced. A short video, appropriately titled “Sucker Punch“, explains the financial risks posed by irresponsibly entering the credit card economy.

Teaching young people how to be smart with their money is certainly a left/right convergence issue worth pursuing. The Walter Cronkite Project’s goal is to expand its reach nationally. If you are concerned about the financial future of young people, help the Cronkite project spread the word about the FoolProof curriculums. Tell teachers or any educators you know. Share the FoolProof links with media contacts. Visit the Cronkite Project website yourself. Access to all FoolProof resources is totally free, agenda-free, and online.

Let us use this financial “illiteracy” month to turn the tide on faulty financial literacy practices for young people today and for future generations to come.

Ralph Nader’s latest book is: Unstoppable: the Emerging Left-Right Alliance to Dismantle the Corporate State.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us!