Americans Are Not Taught To Care About Money
Every once and a while, our economy goes through a period of contraction or recession. Many of the repercussions of these natural economic shifts are out of our control; some people lose their jobs, others see the values of their homes decline. But all too often, Americans fail to acknowledge what they can do differently to help manage financial stress. Unfortunately, as a society, we do not teach children to value financial literacy, which can contribute to irresponsible financial choices later in life.
An Education Problem
Children tend to learn about money from their parents. In America, most public schools do not offer personal finance classes and so children have to learn through observation. Parents do not always teach their children about the importance of budgeting and saving, perhaps because they themselves are not aware. As a result, many children enter the "real world" unprepared for how to make life decisions about money.
In high school, many students take loans for colleges in the tens of thousands of dollars, not really understanding what it will take to pay that money back. Upon graduation, many of these students are stuck with payments that are upwards of $400 or $500 per month and the graduates are in many cases unprepared to deal with this type of stress. By their early or mid 20s, many people have made important financial choices without fully understanding the consequences of their decisions. We need to start educating people younger.
In America, about $17 billion is spent per year marketing financial products such as credit cards and mortgages to consumers, but only $670 million is spent educating people about financial management. This leads to a huge imbalance in information. As a society, we need to do more to make sure that we teach young people how to manage money so that they can manage the ups and downs of the economy more readily.