Every child should be taught personal finance as a compulsory part of the school curriculum, a cross-party group of MPs said.
After an eight-month inquiry, the All-Party Parliamentary Group on Financial Education for Young People called on ministers to ensure school-leavers are better equipped to avoid running into money problems.
It has published a report demanding that personal finance education be made compulsory in schools.
Financial numeracy should be taught within mathematics and "subjective aspects" as part of Personal, Social Health and Economic (PSHE) education, it said.
The group recommended the appointment of a co-ordinator or "Champion" within each school responsible for bringing personal finance education together.
Personal finance teaching is currently ad hoc, with only 45% of teachers responding to a survey by the inquiry saying they had ever taught it.
The report comes ahead of a Commons debate about the issue on Thursday, secured after more than 100,000 people signed a petition by money expert Martin Lewis calling for financial education to be made compulsory.
Tory MP Andrew Percy, who chaired the inquiry, said: "Credit cards, mortgages, hire purchase agreements, mobile phone contracts, tuition fees and even supermarket offers all require us to apply functional maths skills, such as being able to calculate APR, compound interest and percentages, to real-life situations.
"But too many of our school leavers, who can perform complex mathematical equations and algebra, have no idea what basic financial terms like APR and PPI mean - leaving them without the necessary level of financial literacy to make decisions in an increasingly complex financial world."
He added that financial education would be a long-term solution to irresponsible borrowing and personal insolvency.