Financial Literacy

In primary school, they taught us basic "computer" literacy. Basically, most students learned how to turn on a computer, type a basic document and maybe email someone. Heck, we even had the same for sex/reproduction/etc. We (as a society) went through all of that trouble to teach kids these basic skills, but what has become painfully apparent to me is we do nothing to teach young people the equivalent BASIC education with regards to finance.

Here's some painful data from a MetLife survey: Among those with children under 18, 57% rely on their latest paycheck to manage finances. Even among employees earning $75,000 or more a year, more than 34% live are relying on their latest paychecks to get by. /snip/ Due in large part to a heavy reliance on work income, more than two-thirds of employees are extremely or very concerned about making ends meet. For example, a majority of respondents, or 71%, don't have or don't know if they have a financial plan.

The study's authors go on to say that your local financial planner/books/etc are the way to learn financial literacy. As history has proven, kids who don't learn to read in school won't go out and learn it by osmosis (or from their parents). While there is a small percentage of parents who do understand the basics of financial literacy and teach that to their kids, the rest of the population clearly doesn't get it.

I see it every day at our company: the folks living hand-to-mouth and it makes me sad. The problem is not that these folks are dumb. The problem is that no one ever taught them how basic personal finance works. How do you keep from going broke and digging yourself into a bigger hole week after week? How do you build a nest egg? What's the difference between an asset and a liability? Basic concepts, but ones that are foreign to folks who've never been taught them. (Just like reading or computer literacy..) As you can imagine, these people are completely unsuited to teach their offspring anything but a hand-to-mouth existence.

So, if individuals in our society are unable to teach these skills to their offspring, then the only way it can happen basic financial education must start in the schools. This should be unbiased education about how finances work covering topics like: how to leave beneath your means. How car loans, cash advance places, and credit card balances affect ones finances. The dangers of compounded interest. How to build investments both in one's own marketable skills and in securities. And so on...

Of course, employers won't like this: nothing stokes the fires of an economy more than people who spend every nickel they can grab -- and nothing makes for a more motivated employee than one who needs to work that day to pay for groceries. The other upside of universal financial literacy: perhaps our citizens will know not to support elected officials who are digging our grave as a society by borrowing every cent we can get our hands on.

Babies!

It's so unexpected, but procreation has finally happened! It's amazing!

Shandelle and I are grandparents of three (3) new fish in our 35 gallon fishtank. We were sitting to eat one day last week and noticed a tiny speck dart back into the rocks. At first, Shandelle thought it was one of the original guppies we fed the fish several months ago. But no, it was a 5 mm baby fish -- blue and very timid. We subsequently discovered two more hiding throughout the tank. It's pretty exciting to know our little tank is healthy enough to support the entire process! After four different tanks, this is the first one where that's happened. Very exciting!