Six years and six Financial Literacy Months ago, I asked a question: “What difference have we made?”
Back then, in 2018, total credit card debt had recently surpassed $870 billion and student loan debt stood at $1.5 trillion. Today, the former stands at $1.13 trillion and the latter has blown past $1.7 trillion.
Obviously, Financial Literacy Month isn’t slowing down Americans’ debt. This is bad news for every business owner — even me, who specializes in personal debt solutions. It’s not even good for credit card issuers. The reason is simple: Once personal debt spirals so out of control that the only option is a bankruptcy outbreak, we all lose clients and customers.
We need to do more
Awareness has its limitations. The problem with awareness days, weeks and years is that they seldom reach the people who really need them. Many of those who pay attention have already realized they need help.
I once thought the solution was financial education in our schools. In February, The Hill reported, “In 2020, only eight states had a stand-alone personal finance course available for all high schoolers. This year, 25 states will offer a financial literacy class in K-12.” It will take a decade or more to determine if those courses make a dent in those students’ debts. That’s why these days I feel that we need to do more now.
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Not fair but effective
The sad truth is that employers need to teach personal finance. Work is about making money, so employers have the credibility to impart financial wisdom. It’s worth the employers’ effort because, as Kiplinger has reported before, “When employees are worried about money, their job performance and overall well-being can suffer.”
It shouldn’t have to be this way, but we have a responsibility — both to our company and to our country — to educate our employees. The good news is, there are several quality vendors to choose from, and the cost is affordable.
While I support school and government efforts to improve financial literacy, I firmly believe the quickest way to get things done in this country is through private enterprise. We can move fastest with the least paperwork and the keenest attention to detail.
Business leaders live financial literacy every day, or they’re not business leaders for long. It’s time we take over the teaching.
The best solution is the worst solution
One common explanation for America’s explosion of personal debt is the ease of acquiring it. When I was in college pursuing my accounting degree decades ago, it wasn’t as easy to get a credit card as it is today — or as desirable. You filled out a paper application and waited a long time to get your card in the mail. Rewards were scarce, annual fees were common, and credit limits were low.
Today, you can apply for credit cards on your phone and charge items online at sites that save your information. So yes, technology has worsened America’s personal debt problem. Someday soon, I hope it can solve it. As artificial intelligence (AI) gets smarter and automation permeates more of our lives, I can foresee a day when an Alexa-like device on your kitchen counter and a Siri-like AI on your phone can remind you about your monthly household budget in real time. If you pull into the parking lot of a pricey restaurant, an AI voice might remind you that the average meal there will cost $150 and blow your budget for the month.
Until that day, however, it’s up to us.
