BLUE SPRINGS, Mo. - In a recent national survey of high school seniors' knowledge of basic personal finance and economic topics, students could answer only 48 percent of the questions correctly. "Adolescents clearly need a crash course in personal finance to prepare them for the future. Otherwise we are setting up a whole generation for financial failure," said a University of Missouri Extension family financial education specialist.

"Parents also need to discuss family financial issues with their adolescents and set up learning experiences while the cost of making mistakes is still relatively low," said Carole Bozworth. "Assisting teens in becoming more financially literate provides them with a form of economic self-defense."

A good first step is to help them understand how to manage a checking account. A recent Charles Schwab survey found that only a third of teens know how to read a bank statement and balance a checkbook.

Keeping an accurate check register, even if you never write checks, is essential. Every debit transaction and ATM withdrawal needs to be recorded. Get your child in the habit of thinking of the money as gone from his account as soon as he relinquishes that check or makes a debit transaction. Calling the bank for your current account balance does not always give you an accurate picture. There might be outstanding checks written against the account; sometimes debit transactions can take three days or longer to go through.

"A gasoline purchase made with a debit card three days ago may or may not be out of your account when you call to check your balance," Bozworth said. "By keeping good records, you avoid the risk of being overdrawn or paying overdraft protection fees."

If you overdraw your account repeatedly or cannot cover the overdrafts and overdraft penalty fees, banks will close your checking account. They also report this information to a company called ChexSystems. This might result in other banks refusing to let you open an account with them. Reports to ChexSystems remain on file for five years.

"Though some financial institutions have second-chance checking programs, they still require the customer to first make full restitution on the old account," Bozworth said.

Learning to manage a checking account is an essential financial skill that can save a young person a lot of anguish (as well as dollars) down the road.

For more information on personal finance from MU Extension, see