Bad financial habits begin early. A 2005 survey by Nellie Mae revealed that of 1,413 college students, 91% had a credit card by their senior year of college -- 79% of whom reported carrying a balance. That's a lot of potentially irresponsible consumers in the making.

Furthermore, according to a decade-old TIAA-CREF survey of 16- to 22-year-olds, only 21% had taken a course on personal finance and, while 94% cited their parents as a source of financial guidance, 30% rarely or never discussed financial matters with their parents. These findings suggest a huge void in the financial education of young adults who are now in their 20s and early 30s, and most signs point to a continuing lack of financial education in youth today.

Fortunately, last January President Bush announced the creation of a President's Advisory Council on Financial Literacy to arm future generations of Americans with the education to make sound financial decisions.

Chaired by the founder and namesake of Charles Schwab (NASDAQ:SCHW), the council's mission is "to help keep America competitive and assist the American people in understanding and addressing financial matters."

The council has already adopted two initiatives aimed at promoting financial education at an early age:

  • Money Math, a curriculum for middle school math classes that teaches money management; and
  • The National Financial Literacy Challenge, a financial literacy quiz high school students may take in hopes of earning a medal of recognition and even a college scholarship.

Not just for kids
While your school days may be long past, you still have much to gain by supporting financial literacy -- and much to lose if you don't.

Even if you were smart enough to not take the subprime bait from mortgage lenders, avoiding investments in hard-hit companies like Citigroup (NYSE:C), Fannie Mae (NYSE:FNM), or Freddie Mac (NYSE:FRE), your investments are likely suffering today as a result of those who did. In an interconnected economy, the poor decisions made by others can bring down all but the most prescient investors.

While it's too late to prevent the current recession, a nation of financially literate individuals would be less prone to future crises. The best way to protect your portfolio from the next subprime debacle is simple: Wage war on financial illiteracy.

Your first battle
Educate someone. Teach your child -- or your brother, colleague, or pet psychiatrist -- a financial lesson before they have to learn one the hard way. Follow the lead of Fool contributor Brian Orelli, who turned a parenting dilemma into an economics lesson.

Pass along the financial "lessons" you were fortunate enough to discover -- or lucky enough to survive. This Motley Fool article gives five suggestions on how to start teaching financial values to your children -- like setting up a kid-sized 401(k).

Or leave the teaching to the professionals
This year, The Motley Fool's philanthropic mission, Foolanthropy, has partnered with DonorsChoose.org, where donations fund specific school projects designed by the teachers themselves. Contributions to the organization -- whose corporate sponsors include Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) -- help educators purchase the supplies or reading materials needed to teach the lessons.

The Foolanthropy committee has selected several Donors Choose projects that promote financial literacy in the classroom. Take a minute to peruse the list of proposals and make a donation by clicking here.

Brad Prescott got his first credit card as a freshman in college; it came with a free t-shirt and a 17% APR. He no longer owns either -- or any of the companies mentioned in this article. Bank of America and JPMorgan Chase are Motley Fool Income Investor recommendations. Schwab is a Motley Fool Stock Advisor recommendation. The Fool is investors writing for investors.