Student Loans Debt Over $1trillion Gives Parents Warning
Although reports show that 82% of American parents and 89% of teachers, agree that personal finance should be a graduation requirement; students debts related to loans have rocketed to more than one trillion Dollars! Parents are being tasked with teaching their kids financial management.
Personal responsibility is the foundation of the American constitution, but this could be detrimental to the country, if education related to personal finance control is neglected. This is shown by the poor decisions made by financially uneducated consumers during the build-up to the 2008 financial crisis. They were sheep waiting to be exploited by the predators, portrayed as unscrupulous businesses.
Records show that 25% of Americans do not have any savings and that only 11% of citizens with 401(k) are saving enough to meet the needs posed by retirement. This emphasizes the differences between the legislated teaching procedure and the essential personal finance learning required in the free market society of today, which is America. At present, there are only four States that require graduation to contain a personal finance, stand-alone semester long course. Parents teaching their kids about finance could be considered crucial.
The factor of student loan debt surpassing the one trillion Dollars mark means that it has exceeded credit card and auto loan indebtedness. This alarming statistic is an example of the necessity to provide students with the basics of managing personal finance as it should be practiced. This philosophy is supported by the fact that twenty six countries have developed or are in the process of developing, a national financial literacy strategy. It is viewed as being critical for financial awareness in kids in K-12 grades, to prevent another financial crisis.
Excitement is displayed by students, following success in tests demonstrating their competence in various sophisticated sciences. However, it is a sobering thought that the majority may not have the ability to manage a bank account, or budget and be unable to make informed decisions related to their personal finance. Responsibility for teaching their kids is accordingly on the parents.
Accordingly, parents should be aware that kids today, need to be prepared to confront en to the challenges of the real world, which includes managing personal finance. Because of legislative designation, parents cannot depend on normal educational sources to provide this type of life skills to their kids. Therefore, they must commit to teaching their kids basic, “street-wise” personal finance knowledge, as a part of their preparedness to meet the future.