Why We Need to Teach Financial Literacy

My entire Labor Day weekend was consumed helping my girlfriend lease a new car, it even ate our planned canoe trip.  Anyway, early on in the haggling I received some firm evidence of my belief that too many Americans are financially illiterate.  During negotiations, the salesman gave us an initial quote of $286 and change a month, when we refused this he then came back with another quote of $260 a month with a thousand down, which is virtually the exact same price but front loaded.*  This left me rather offended, surely few people are stupid enough to fall for this; the math is just arithmetic and he had already seen me doing the math on the three year cost of the car before this.  I can only assume based on this tactic that many wouldn't have known to do this simple math.

Being able to solve these problems is what basic numeracy is.  Without it, shopping for a car would have led to us being badly ripped off.  How do people get by without it and why aren't schools teaching kids enough that salespeople wouldn't even consider this stupid trick?

* It's actually a little more, this would work out to $287.78 a month, the fact that he wrote Labor Day Blowout by the number just left me that much angrier that he seemed to take me for a fool.  Figure in that if I dropped that thousand in a 3 year CD I could still get a little over 2% a year even in this economy and the deal gets that much worse.  It's hard to believe we don't teach all kids these basic practical issues by the time they're out of high school.  If you can't do this on graduation, the school failed in its job of preparing you with the skills needed for modern life.