P.S.: The Missing Gap in Education – Why the U.S. is a Nation in Debt

In the tradition of Pinoy goodbyes, here's a postscript contributed by one of my blog readers. This article is serious food for thought for Americans by an American. Here goes:

The Missing Gap in Education – Why We’re a Nation in Debt

By Kelly Kilpatrick

Global financial crisis aside – how many of us really understand what the situation means? We read about it in the papers and watch it on the news on TV, but do we really understand how it’s going to affect us personally? Yes, a lot of people have lost their jobs, and the $700 million bailout is expected to raise our taxes by quite a bit, but aside from that, how are you and I going to be affected?

Rising oil prices we can understand; soaring food costs we are familiar with; but how does one go about quantifying the losses suffered in the financial world when we ourselves are knee-deep in personal debt? Most Americans lack a fundamental knowledge of the financial world and its workings, but that’s ok, understandable even. What is hard to comprehend is that they’re also ignorant about the basic aspects of money, like profits and losses and credit and debit.

How else can we explain the mountain of credit card debt this nation seems to have? I mean, something so simple as compound interest adding up to make your payments higher if you don’t pay your monthly bills each month is a tough concept for Americans to grasp. How can they not realize that they are spending money that they don’t have, and that the longer they live on borrowed money, the more they’re going to have to pay over the coming period? Or maybe they think that it’s a magic card that weaves a spell so that you need to pay just the minimum balance each month.

It’s a basic flaw in our education system that children are not taught practical matters like –

• Spending more than you earn can put you in debt.
• Saving for a rainy day is necessary and important.
• Putting all your money in one account or deposit is not wise.
• Learning how to balance a checkbook is a necessity.
• Using your credit card only if you have the money to cover the bill is the right thing to do.
• Being careful with your personal and sensitive information is a must in these days of identity theft.
• Good money management skills will help you in your retirement.

I can go on and on, but I’d rather they introduced a subject at school to deal with this topic. Parents are finding themselves in precarious situations, so it’s no use looking to them to offer their children the right kind of guidance. And if the schools don’t tackle this soon enough, they’re going to have more and more financial crises on their hands as the years go by.


(Kelly Kilpatrick writes on the subject of airline credit cards. She invites your feedback at: kellykilpatrick24 @ gmail.com)

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