Instead, the 50-year-old widow from Hilo realized just two years ago that she should manage her finances better after taking a financial education class offered by Alu Like, the nonprofit organization that assists Native Hawaiians.

"It taught me a lesson. I saw where (credit card debt) took me in the past, and I don't want to go there again. I want to set an example for my son," she said.

Alu Like is about to expand its financial education efforts. In January, the organization will launch its Life-Long Lessons in Financial Management program especially for those with low-income.

The classes, financed by a $30,000 grant from American Express, will go beyond budgeting and debt management to include stock investing. The goal is to encourage consumers to stop living from paycheck to paycheck and to learn how to save and invest for future needs by taking a page from Hawai'i's past.

Most people who took Alu Like's classes didn't know how to budget, said Billie Keawekane, an instructor and Alu Like's representative on the Big Island.

Inadequate financial education is not only among those with low-income. Preliminary results of a financial literacy study in late July show that a "significant proportion" of Hawai'i residents cannot answer economic and consumer finance questions correctly, said Sumner La Croix, chairman of the economics department at the University of Hawai'i.

Classes by Alu Like and other nonprofits are separate efforts to boost financial literacy, but a unified statewide push is needed because the consequences of not understanding one's finances and how the economy works can be devastating, La Croix said.

A lack of financial knowledge can lead to unwise decisions that could hurt you later — such as waiting until you're close to retirement before saving.

"Many people don't know that saving early on, (together with the benefits of) compound interest, can make a big difference in retirement," said La Croix.

Financial education can change behavior; states that promote financial literacy classes tend to have higher savings rates than those that don't.

After taking these classes, "people save up to an additional year of their income," La Croix said.

Children of lower-income families tend to benefit most from such classes, he said. Because their parents typically don't have much money to spare, they usually don't set an example of saving.

In Hawai'i, economics and finance courses are offered to high school students but they are not mandatory. Just 25 percent of students here take such courses compared to 45 percent nationally, he said.

"Hawai'i is falling behind," La Croix said. "It's really unfortunate."

The shortfall also is hitting the ranks of teachers.

In the past four years, only seven economics majors out of 95 social sciences students graduated from the University of Hawai'i's College of Education, the economist said.

On Aug. 20, the Hawaii Council on Economic Education will hold its first annual Economic and Financial Literacy Conference, co-sponsored by Sen. Daniel Akaka.

One of the conference's goals is to encourage the teaching of financial concepts at the high school and lower elementary levels.

Part of the challenge is to make financial education as interesting to kids as, say, MTV.

It's something La Croix understands.

"I hope this hasn't been too dull," he said in the Advertiser interview.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.