Money Management Recently reflecting upon my good old high school years in the late 90s, I am reminded of the overall satisfaction of and value that I placed on my education. I took advantage of the challenging honors and college-level courses that my school had provided and made it my mission to work hard, earn good grades, abide by the rules, and graduate with pride. I followed the paved path with ease and never thought twice about the premeditated curriculum offered… neither had my immigrant parents, who had so graciously sent my sisters and me to private high schools in California.
They wanted their children to start off on the right foot and stressed the importance of obtaining high school and college degrees, hoping such accomplishments would open doors for life opportunities that they never had. So as planned, I had earned my Bachelor’s degree, landed a great job in my field, and began to live my independent, young adult American life. Within six months, I had maxed out my credit cards and struggled to make my minimum payments, taken out an auto loan to purchase my first vehicle, was almost delinquent in monthly rent, and needed to start paying back my college loan.
Geez, talk about living the American life- what a mess! Too embarrassed to confront my parents with my dilemma, I read self-help tips through electronic financial management magazines and derived a personal plan-of-action to dig me out of my financial woes. I thought to myself, of all the formal education that I had undergone for the last seventeen years, why am I struggling to live financially stable? How can I be so uneducated about my own finances? Ah, probably because it was a subject never taught to me nor to my fellow classmates! Many of us young adults were sinking in the same boat, and we had to learn how to keep afloat the hard way.
Are these rough experiences of financial hardship truly necessary? Must we really learn the hard way? I had just spent years studying the core academic foundation of mathematics, sciences, history, and humanities; I don’t recall a course entitled “How to Live in America after College” or “Money Management Skills for the Post-Grad”. If the average American high school provides their students with classes in physical education, sex education, driver’s education, and even home economics, why can’t they sneak in a good lesson or two in money management? High schools should incorporate mandatory basic inancial classes in their curriculum to teach teenagers early on about personal financial management. In a country that stresses the importance of holding a strong credit score to purchase a home and the value of a strong educational background to theoretically provide better job opportunities, it only makes sense to supply young adults with a basic financial foundation to help them lead successful lives. Instead, the absence of such knowledge contributes to the country’s growing percentage of consumer and student loan debt and aids the government’s overarching goals of boosting the nation’s economy at the consumer’s expense.
The economy in recession? Let’s get them to spend more! Young adults are such easy targets; they are easily tempted, thanks to the media’s overkill exposure of materialistic consumption. They open credit cards or take out loans without prior knowledge of the potential outcomes of debt, ill-informed with the notion that such options are “free money” that they can pay over time without much damage. Educating young Americans about personal financial management will contribute to the decrease of the nation’s consumer debt and deter from aiding the government’s ultimate plan to have consumers want and spend more.
The majority of young adults do not realize the crucial effects of consumer debt. Financial writer Martha White of Time Moneyland reports: “Although 70% of undergrads and 96% of graduate students have credit cards, fewer than 10% pay their balance in full every month. Only 15% have any idea how much their interest rate is, and fewer than one in 10 students know their interest rate, late fee and over-limit fee amounts” (White). It is clear that college students do not understand the long-lasting and potentially damaging effect of this handheld plastic item.
They have yet to encounter the hardship of dealing with consumer debt, coupled with the student loan debt that will plague them shortly after graduation. Danielle Kurtzleben of U. S. News and World Report stated earlier this year that U. S. student loan debt surpassed credit-card debt (Kurtzleben). Mind you, these college students will eventually graduate and seek a job in the ever-so-competitive work force (currently at a 8. 1% unemployment rate), while struggling to pay credit card balances, student loans, monthly rent, and the grocery bill.
There truly is a need to educate our young adults before they leap into financial disasters post-college. Ultimately, our economy will only flourish if consumers spend money. As history professor and financial author James Livingston blatantly puts it, consumer debt and government spending drive economic growth (Tuttle). It’s as though they need uneducated individuals to rack up their credit cards and balance out the savvy, thrifty consumers who stow away their cards and build their savings account.
The government deploys a stimulus act to target the older, money-making citizens with tax credits and first-time home buyer incentives, thus creating more debt for the consumer. And the young folks? What better way to get them to spend money than to constantly market, and perhaps silently endorse, the latest and greatest… everything? (Everything: phones, computers, automobiles, clothes, shoes, home furnishings, pet gear, anything taxable. ) Extra points for them by getting the young celebrities to flaunt and endorse such materialistic goods; you know how Americans attach to celebrities.
Is this perhaps the motive to exclude a beneficial money class during the fundamental years in high school? The American economy will inevitably reach its high and low points. At the age of 30, I’ve experienced the high economic peak during my college years (with tons of low-interest credit card offers in my mailbox), as well as the recession that took place a few years ago (on the verge of almost losing my home). We need to educate Americans at an early age to give them a fair start at surviving the future and prepare accordingly, no matter what turn the economy takes.
Brad Tuttle, writer of Time Moneyland states: “Saving is obviously good for the individual doing the saving. But spending is what drives the economy” (Tuttle). Whether young adults choose to rack up their credit card, or learn to save money, we should at least offer them basic financial planning so that they can make their own financial judgments and responsibly face the consequences of their decisions. Even if our economy falls due to the government’s irresponsible spending actions, we can perhaps avoid having it lie entirely at the consumer’s expense. Works Cited Kurtzleben, Danielle. “U. S. tudent-loan debt surpasses credit-card debt. ” Chicago Tribune (March 8, 2012). 27 June 2012 http://www. chicagotribune. com/classified/realestate/foreclosure/sc-cons-0308-money-consumer-watch-20120308,0,516758. story Tuttle, Brad. “How Shopping is Good for the Economy and Your Soul. ” Time Moneyland (October 26, 2011). 27 June 2012 http://moneyland. time. com/2011/10/26/how-shopping-is-good-for-the-economy%E2%80%94and-your-soul/ White, Martha C. “College Students are Credit Card Dunces. ” Time Moneyland (April 12, 2012). 27 June 2012 http://moneyland. time. com/2012/04/12/college-students-are-credit-card-dunces/
