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Baking Financial Education Into American Culture

America Lags Behind in Credit Education

Shana. Richardson, Monday, April 22

 

I’ve just recently returned from a trip to Thailand to help spread the good credit union word. I spent days training budding entrepreneurs on business models, strategy, marketing and finance – you name it. These are not the first-world tech startups we think about in the US. It’s farmers and soap makers and herbalists.

Then again, not much there is like it is in the United States. We are so blessed with a strong financial system, medical services and even modern plumbing. I have a love-hate relationship with this volunteer work: I love helping families become self-sustaining by starting their businesses and seeing them beam with pride at their accomplishments, which we Americans wouldn’t think twice about. It’s what’s expected here. And that’s what I hate about it. I’m not ashamed of my professional success, but these experiences certainly change your perspective about what success truly is.

But Thailand, and I’ve experienced this on previous trips to the Philippines and elsewhere, has the US beat by a mile in one major area: financial education. In Asia, my experience has been that it’s the first thing they’re talking about with credit union members and consumers in general. It’s baked into everything they do, whereas, in our land of plenty, we tend to treat it as an add-on, a sidebar – just less.

 

I meet such amazing people through volunteering. 
Here is my group at the World Council of Credit Unions’ workshop in Thailand working
hard on business development projects.

We’re fortunate to live in the US, and I’m grateful every day, but we definitely take this critically important issue less seriously than we should. We are a community of consumers who believe there will always be more around the corner, except for those who are stuck in minimum wage jobs or no jobs at all. Nearly half of Americans, 44%, do not have the cash to cover a $400 emergency, Forbes recently reported. That would account for your average car repair or replacing certain kitchen appliances, items that are essential to many modern lives.

On top of that, college tuition is skyrocketing, with the cost of a public, four-year college jumping 213% over the last 30 years, according to Forbes, and nearly half of the 22 million Americans with federal student loans are behind on their payments. We must do a better job of educating them to consider the return on investment for the degree they’re seeking, selecting a school accordingly, and preparing them for the payments that lie ahead.

More than one-third of Americans, 38%, have gotten dug in to credit card debt. On average, they owe $16,048 at an APR of 16.47%, Forbes reported. We must do better by them! Make every conversation an informative one without being condescending. Refinance high-interest credit cards when we can (Ser Tech can help with that). Educate them about all of their options, including saving for a rainy day rather than throwing it on their credit card. Show them the difference it can make in their payments and their lives. Bring fun, educational opportunities into the schools, community centers, even sports leagues to help young Americans get an early start. Because, right now, one-third of American have no retirement savings and 23% have less than $10,000 saved, meaning 56% are woefully underfunded.

We must do what we can to get America’s one upsmanship with the Joneses under control. Invest in ourselves first through savings and retirement savings. Learn to hold off on that shiny new iPhone or car until we can truly afford it. Keep an eye on our credit scores (Again, Ser Tech can help). It’s community financial institutions’ duty as part of the community, and it must begin now.