Pupils are not given enough knowledge or understanding of money matters in schools to make sound financial decisions in later life, according to inspectors.
In a report released this week, Welsh inspectorate Estyn says that pupils need more opportunities to improve their financial skills across the curriculum.
It follows criticism from experts that the Welsh Government's approach to the subject is "ineffective", and concern from teaching unions that it is being "tainted" by "covert advertising" from banks.
Last year, a cross-party Assembly committee heard evidence that the delivery of financial education is inconsistent and many schools devote limited time to the subject.
Financial education was first incorporated into the Welsh curriculum in 2009. Estyn found that while most schools now teach pupils about finance in maths and personal and social education (PSE) lessons, its development is hindered by a lack of curriculum time and poor co-ordination.
Few schools monitor or evaluate the impact of financial education on pupils, and some heads are unaware that guidance and training is available for their staff.
Schools have found it difficult to build up relationships with financial institutions, and none of those visited by inspectors work with other schools to develop their provision.
Chief inspector Ann Keane said: "Although pupils are taught about finance in PSE lessons, the majority of schools do not plan well enough to give pupils the chance to apply their financial skills in different contexts across the curriculum.
"In schools where this is a well- established practice, a senior leader has the overall responsibility to co-ordinate relevant training and support for teachers.
"As a result, pupils in these schools have a good understanding of financial matters and can apply their learning to real-life situations, such as family finances, or current financial issues in the media."
The report recommends that schools offer better financial education training to teachers, plan a "co-ordinated and progressive" programme of activities across the curriculum, and monitor pupil progress.
It also recommends that local authorities provide better support to their schools and that the Government develops a database of organisations that can help.
Earlier this year, financial education charity the ifs School of Finance urged the Government to change its approach to financial education in schools, saying there is no evidence that maths and PSE lessons are effective ways of teaching the subject.
It has also called for financial education to become a stand-alone subject in the secondary school curriculum to give it greater status.
The Welsh Government said it welcomed Estyn's report and would respond "in due course".
"Estyn has identified much good practice, and in particular in primary schools. The findings will inform ongoing work to continue to improve financial education in schools."
MONEY AWARE: ON BUDGET
Blackwood primary, near Caerphilly, is highlighted by inspectors for its good work on financial education.
Last year the school held a "money week", during which pupils took part in a range of activities from simple sums to complicated problem-solving and budget-management tasks.
Head Jane Mather said: "We wanted to encourage the children to get an early financial awareness, especially thinking about the cost of things and the importance of savings."
The school is holding its second money week next week and is looking to develop the theme further with the help of local businesses and banks.
Original headline: Lack of finance nous could leave children at risk in later life