An Education We Can Not Afford To Ignore Anymore
Ask just about any young person about a credit card and they think it is a license to spend. The mindset is that there are no consequences as it is free money and a passport to live beyond their means. That is, until the bill comes. Then the minimum payment is made, if made at all, while at the same time, more credit is used.
It's a cycle that is very dangerous and most young people continue to dig themselves deeper into. We all know it is a slippery slope that endangers a generation to personal financial ruin. By the way, did you ever wonder why many credit card companies camp out on college campuses during freshman week after parents leave? Have any of you been surprised when a credit card offer comes in the mail to your son or daughter before they've reached 20? You are not alone.
Even more chilling is the fact that most young people do not have a clue about the two words in the English language that is their passport to a home, car, business loan or education. Those two words are "credit rating." Then comes the straw that breaks the camel's back. That piece of this complex puzzle is saving and investing. Those two words are critical to our young people's future.
What is in common denominator with each of these important matters?
The answer is that young people are uneducated and completely in the dark on each of these "financial freedom factors" in their fragile lives. Schools teach history, math, science, English, foreign language and more. But the most important future consideration that doesn't make the cut is financial literacy.
Think about it, only 18% of young people passed a BASIC financial literacy quiz about money, credit, savings and investing according to US News and World Report. Let me repeat that, 18%. How can young people learn about these skills when they are not taught, exposed or engaged with these subjects? The simple answer is that they can not learn these skills if they are hidden out of sight.
Most young people who are engaged in the act of saving, investing, learning about credit, credit ratings and more learned, from a family member. But, in today's challenging economy, the financial literacy discussion has taken a back seat in many households. And, sadly, some are not had at all because of the complexity of the subject. That has to change.
Young people who are actively invested in the markets will have the most opportunities and choices in the future. Young people who have an understanding of credit, it's power and usage will most be able to harness it's energy for their financial benefit. Young people who are educated on the markets, loans, business, credit and the like will become the entrepreneurs of tomorrow.
But right now we are relegating a generation of young people to second class citizenry status becuase they lack the basic skill set of financial literacy. They can't learn about it if the subject is not part of their education. Our education system has to evolve and adapt now to address the complexities of financial literacy for all of our young people. We can no longer sit back and allow another generation to be lost to the financial literacy crisis.
One thing is for sure, if we start this process now and actively participate in it's development, we will promote growth in this country. And, without a doubt, we will address an important ingredient in our economy that has been missing for decades.
Financial literacy is critical to our country's future and for generations of young people. The time is now for change.