Why Are We Failing Financially?

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Today I had lunch with a friend. He painfully told me about how his parents hadn’t planned adequately for retirement and how they were struggling to pay their bills each month. My friend was generously helping his parents financially but this was putting a strain on his own family finances. This seems to be a fairly common story, especially in the age of consumer spending. I see sorrow on the faces of 70 year old supermarket workers and greeters. I asked one retiree supermarket employee why he needed to work at 73 and he simply told me, “no one showed me how to budget and save. I didn’t know there was another way.”

It seems to me two of the aspects in life in which humans are failing miserably are not taught in school. Finances and relationships. The average U.S. household has $15,706 of credit debt, personal bankruptcies are up 30% since 2014 (96,000 new filings in July 2015 alone!) and the divorce rate is climbing. The same is happening in the UK.

So this begs the question. Why on earth don’t schools teach basic financial education? I know I know, it’s all about a lack of budget blah blah blah. But seriously I believe basic budgeting should be a part of every school curriculum. I’m convinced financially educating our youngsters at a young age would curtail the debt problem.

Some argue that financial education should by taught by parents at home. But if the average household is buried in consumer debt, what does this say about parents ability to financially educate their children if they don’t understand it themselves?

Yesterday I saw this book in my local library:

book

The book explained how using credit cards was financially responsible because it helped build a credit score. If this is the type of financial advice our children are receiving, they are doomed to make the same financial mistakes I made when I was young and dumb.

 

When I first arrived at university, a credit fair was put on for the students. Each major credit card company hosted a booth set up manned by good looking females touting the benefits of unlimited credit lines and membership card benefits. American Express had me at unlimited credit. Buying meaningless university supplies courtesy of AMEX was an effortless joy. Then I received the bill for $800, only to remember my bank account was $732 short. Next came the ignored bills and charge off.

I’m lucky my experience wasn’t worse. I could have easily charged the credit card to the tune of thousands instead of hundreds.

I’m certain if I’d been educated me on credit cards or debt and would never had made that decision to sign up for a credit card. The sheer fact that companies give credit cards to income-less students is mind-blowing.

If you have kids, I urge you to teach them about budgeting, saving and giving. A little financial education can influence a child for their lifetime.