The past few years have been very challenging for my wife and I trying to stay out of trouble in financial matters. It seems like the more money we make, the harder things become. That challenge is made worse by now having three older children, two who are teenagers and one who is very close. As you might imagine, or know personally, children are a lot cheaper to deal with when they are young.
However, I am convinced that my daughters are not the problem. Neither is it true that my wife and I don’t really care any more about keeping ourselves financially solvent. Rather, the world is conspiring to make it harder for us. Literally all of the recent changes in the world, supposedly to make things easier or better for us, the consumer, have only made it increasingly more challenging for anyone to actually keep up with their own finances.
A recent blog post by Fast Company highlights this concern where they share how England is considering making “Financial Literacy” mandatory for their children. They write :
This lack of education, both in Britain and America, has led to dismal levels of financial literacy. According to a Brookings Institute report, among individuals aged over 50, only half could answer this question:
“Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow: more than $102, exactly $102, less than $102.”
Yet another survey found that one in five Americans believed that “the most practical strategy for accumulating several hundred thousand dollars” for their retirement was the lottery. Given the deep-seeded ignorance of the average consumer, is the arm of public education long enough to pull them out?
The funny thing to me is that when I was in high school, we had some form of simple financial literacy. The class was called “Home Economics” and everyone had to take it. During at least one of our six weeks grading period, we had to take over a real bank account and learn how to use a checkbook.
Today, that is non-existent as far as I can tell around here in Florida. Worse, you can’t even help your own child take baby steps towards financial literacy. Last year when my eldest was 15, I went to 4 different banks attempting to open a checking account for her. Two of those banks were ones where I had multiple accounts, including two business accounts that move through a lot of money. Yet, we were rejected at every step. Amazing–here’s a father who wants to teach his child about keeping her account solvent, not generating bank fees, not getting overdrawn and the banks won’t let me open an account.
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 yet 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, but we had better figure out something.