May 12, 2011 at 7:38 am, by Carl

I told you last week how some are suggesting that we force teach financial literacy.  It’s actually funny that anyone thinks we need to discuss this.  As I told you, back in the 1970s, I HAD to learn basic financial literacy.  Now, I can’t even help my own children learn about the rules of banking by giving them their own account.  My parents had not taught my older sister much about banking, so when she left for college, she struggled initially to understand how a checkbook really works (and she had had the same basic economics course in high school that I took).  Once her troubles came to light, my dad took me immediately to the bank and we opened my own checking account.  I was fourteen years old, so I learned early to keep my bank account in balance, yes down to the penny.

The whole thing is enough evidence to make me feel like there really is some conspiracy afoot.  Let’s see–if we don’t teach children how to balance a checkbook, then wouldn’t that lead to even more bank fees for those institutions?  The last time I checked, banks were making billions on fees, particularly overdraft fees. About 25% of all college students reported paying late fees on their credit cards, and 15% have paid an “over the limit” fee for their cards.

But perhaps this is nothing but only another instance of the world moving far too fast on technology and issues, with no one really checking to see the outcome.  I have told you here before about the concern of how technology connected to money could put us all in peril.  So many are so excited about adding some point of payment app for their android or iPhone.  I contend this is not a good idea.  Clearly, through this ease of purchasing, our relationship with debt has been blown all out of proportion.

So, maybe our good friends in England are correct.  We must mandate some form of financial literacy.  I’m not so sure that will work, but we had better figure out something.  As tax season has now come to its conclusion for the last year, my wife and I again found ourselves challenged to stay above water.  We’ve been working for over 21 years to have a good credit rating and not be in any form of credit card debt.  Through lots of willpower and solid focus, we’ve pulled that off.  Yet, as the world has changed in these last few years, I have come to believe that the system is simply against any real effort to manage your own money.

Years ago, if you were learning how to budget, and if you thought you had no solid willpower, you could force yourself into a “cash only” system.  You could simply take  your pay check to the bank, cash it and then allocate your money based on whatever budget you had determined.  The beauty of this system was that there was a clear indicator to you when you were out of money in a certain budget line item.  That is very important in areas where the budget if flexible such as grocery, eating out, entertainment, clothes purchases and so forth.

If I go to the store to buy some new clothes or food, and I have $40 in cash, I will spend only what is in budget, no matter how much I desire to get something else.  It is simple.  It is beautiful.  And, that no longer works in our society.

In many companies, you simply are not allowed to get “a check” from the company.  My College instituted mandatory automatic draft payment three years ago.  In many banks, there are incentives, and sometimes penalties, to use electronic financial transfer, whether getting money in or taking money out.  We recently joined a bank like this in order to try and get some positive interest on our money.  That’s a nice thing, but the way they do it is force you to do almost everything electronically.  That is basically teaching people that money is invisible.

Again, I could argue that this is connected to some sort of conspiracy by the government.  If, through the banks and technology, they convince us that “money” is really invisible, digital, then why wouldn’t they just eliminate all cash?  It would save them money of course as many argue, especially for getting rid of the penny. Yet, once all cash is gone, then just imagine how easy it would be to confiscate it, or change what it is worth, or more likely, convince you to not worry about how much you are spending or making at all.

Whether any of that happens or not, I can tell you that if you don’t know what is really going on with your spending, you will ultimately end up in a bad situation.  I don’t have any answers for how to track it other than through sheer dogged determination. has been shown to be a good resource for managing your money; we may try that.  Others use programs like Quicken or Money; do some research as there are several, with many being online only.  But realize, there is no easy fix.  You will have to become bulldog determined to oversee all of the money.

It all goes in digitally.  It all goes out digitally.  You purchase most things with a credit or debit card.  You literally have no good idea how much money you have or where it is.  All of this leads to a relaxed view of purchasing and desire, something the Fast Company article stated.  The authors contend that you must start young to “ingrain responsible behavior. Financial muck-ups are more than just a failure of arithmetic, but of suppressing the urge to overspend (do we really need the iPad 2?) and calmly evaluating risk. Thus, throwing equations of compound interest at 18-year-olds may already be too late.”

It may be too late for all of us, but at least determine to take a stab at managing your resources with more oversight.  I know that we are on that track.  You should join up also if you haven’t already.