To the Editor:
April is the month of financial education. You knew that, right? I didn’t think so. It is not on my calendar, and I have no idea what it might be. Financial education is brought to the forefront for one month a month, sort of.
So what’s the big deal? One of our most pressing cultural issues is financial poverty.
A large proportion of people of all ages, incomes, and learning levels lack the basic financial knowledge and skill to assure long-term security for themselves and their families, according to studies conducted by the National Endowment for Financial Education, and poor financial decisions may include long-term detrimental effects and negative national consequences. According to a study conducted by Standard & Poor’s in 140 countries, two-thirds of adults lack even the most fundamental fiscal knowledge. Several other studies have reached related opinions.
Financial illiteracy is rife. We are living in turmoil, yet so few seem concerned. Far too many people and families put themselves out of debt by spending more than they can afford, living in homes and driving trucks they cannot afford, and accumulating credit card debt. Others are losing their retirement savings in investments they don’t understand, taking risks they don’t even know exist. And speaking of pensions, far too many are retiring way too early with far too much. Working to at least 70 should be the norm because today’s lifespans are much longer than they were when Social Security was established in the 1930s. Adjust as needed based on health and money.
So, if monetary poverty is so severe, why is so little being done about it? In fact, a few years ago, the U.S. Treasury Department did advise that all college pupils be required to get a personal finance category. But that hasn’t happened and likely never will. Financial literacy isn’t as attractive or socially advantageous as other social causes, and there are only so many lessons in a college education. Of course, there are the odd college courses and seminars, but these are only falls on parched desert sand.
Unfortunately, this is going to have to be a do-it-yourself task, so here are some suggestions:
No amount of expertise is more advantageous and advantageous than spending less than you can afford. For the entire fortnight, track your spending. Write down every quarter. This will be quite boring, but you need to know where you are before you can make changes.
There are many excellent books on the subject. I highly recommend Ramit Sethi’s “I Will Teach You To Get Rich,” specifically for those who are younger. Those closer to retirement did get Suze Orman’s “The Ultimate Retirement Guide for 50+” enlightening. For investment support, nothing beats Burton Malkiel’s traditional, “A Random Walk Down Wall Street.” “The Investment Answer,” by Dan Goldie and Gordon Murray, is also a good option. Additionally, everyone ought to learn Thomas Stanley and William Danko’s “The Millionaire Next Door.” Although the data is dated, the findings and opinions are still as important and potent as always. Read while you track your investing.
Kent M. Ford, CFP
Professor & Coordinator of Economics
SUNY Onondaga Community College
Onondaga