PROVIDENCE – A panel studying financial education in Rhode Island schools has concluded that state and local educators must do a better job preparing children to handle their personal finances.

The Special Legislative Commission to Study Youth Financial Education in Rhode Island said most youth are unprepared for their financial futures and outlined in a report several recommendations.

The 15-member panel said the R.I. Department of Education (RIDE) and local schools should implement the work of national organizations and other states that have developed academic standards in financial literacy. They should also work more cooperatively to improve and expand instruction.

“The importance of establishing good personal financial literacy understanding and habits at this key point in young people’s lives, when they are in school, cannot be underestimated,” said Sen. Daniel J. Issa (D-Central Falls).

As they move from middle school to high school, according to an executive summary of the commission report, students assume greater financial responsibility through part-time jobs and begin to set goals for their adult lives, post-secondary education and career entry. As they earn their paychecks, young people have to make increasingly more complex decisions about whether and how to save or spend their money.

“High quality financial education programs in schools and other youth-oriented settings can help ensure that middle and secondary school students are prepared for these and other financial management decisions, which ultimately benefits the state,” said Rep. Raymond C. Church (D-North Smithfield), who co-chaired the 15-member study panel.

Among the panel’s recommendations:

• The RIDE should adopt statewide standards for youth personal financial literacy, building those standards by using the work of Jump$tart, the National Endowment for Financial Education and the National Council on Economic Education, as well as other states that have developed academic standards in financial literacy.

• The RIDE should work with school districts to incorporate financial literacy into existing teacher professional development efforts.

• The RIDE should include personal financial literacy information in its statewide content guidelines for social studies.

• The RIDE should create a Task Force on Youth Financial Literacy to establish a statewide strategy and action plan for increasing middle school and high school students’ knowledge in the area.

• Rhode Island middle school and high school teachers should increase their efforts to include age-appropriate financial literacy-related information in classroom instruction.

• The percentage of high school students who participate in financial literacy courses should increase by 5 percent each year for the next five years.

“Our youth come of age at a time of mortgage foreclosures, record consumer indebtedness and rising personal bankruptcies,” Issa said. “High school graduates who will immediately enter the work force will have to prepare for unpredictable patterns of employment. Young people who go on to college can look forward to student loans that dwarf their initial incomes. We have an obligation, by providing the appropriate educational foundation, to prepare these students for the next step in their lives.”

The commission study also suggested that the RIDE attempt to encourage more public-private partnerships that systematically target school districts and strive to integrate personal financial literacy content in middle and high school classrooms. It also encourages the R.I. Department of Labor and Training (DLT) to approach financial institutions in the state to develop financial literacy workshops that could be included as part of the DLT’s summer youth job corps program.

The commission was created by legislation approved in the 2007 session and sponsored in their respective chambers by Senator Issa and Representative Church. Its creation was proposed on the heels of a report that on a national financial literacy test, Rhode Island high school seniors scored below the national average.

Others serving on the study commission: Sen. David E. Bates (R-Barrington); Sen. Paul V. Jabour (D-Providence); Rep. Victor G. Moffitt (R-Coventry); Rep. Gregory J. Schadone (D-North Providence); Andy Andrade, RIDE; Joseph Crowley, Warwick Area Career and Technical Center; Eugene Kelly, Warwick Veterans’ Memorial High School; Peter Kerwin, Office of the R.I. General Treasurer; Leigea Landry, accounting firm Lefkowitz, Garfinkel, Champi & DeRienzo; Paul J. Maloney, Providence College; Patrick Ross, law firm Brown Rudnick; Gloria Rossiter, Aldrich Middle School, Warwick; and Stephen Tetzner, Home Star Mortgage.