Every other year, the Federal Reserve tests high school and college students on their basic knowledge about money. The most recent test results reveal that the average high-school student got a 48, out of a possible 100, on the test. The average college kid only got a 62. People often ask Clark why they don't teach about money in high schools. Some schools actually do. They may have a lesson about the real cost of a car, for example, in math class. Yet the credit agenda -- not savings and investing -- is pushed in most of the teaching materials supplied to schools by the banks. Visa put money behind an effort to get pre-teens to have their first "Fee-isa" cards called the Buxx card. Thank goodness that effort bombed.

The responsibility to teach children about money lies with the parents, not the schools. Unfortunately, many families consider it impolite to talk about money. But that's a mistake, Clark believes. His second grader has already asked him, "How much money do you make, Daddy?" He prefers to give a non-answer, saying that he makes enough to save for a rainy day; save additional money for retirement; and still pay for their home, car and food expenses. Of course, that answer entails explaining that a "rainy day" has nothing to do with precipitation!

These kinds of talks with your kids need to be ongoing; discussing it just once is not enough. A couple that Clark used to know found that out the hard way. When the father lost his job, both parents told their 2 teens about the sacrifices they'd have to make until he found work again. The parents felt they really got their point across. But shortly after, the daughter came back and asked for $20 to go to the mall!

When it comes to teaching kids, Clark loves the 3 jars concept that came out of the Christian fundamentalist movement. Each jar is marked with a red, green or yellow heart. One jar can be used to hold money for charity; another jar holds money for current spending; and the third has money for longer-term savings. This provides a very simple, clear and tangible lesson for children.

Before 1965, the concept of credit as we have it today didn't really exist. In some cases, you could buy a car on a 3-year loan, but more than likely you paid cash. Houses required a real down payment. There was no complexity about what constituted money. It wasn't a credit card and it wasn't a debit card. It was cash! So watch your kids if they have debit cards. That plastic makes it hard to understand the concept of finite resources.