Current Financial Crisis - Changing Financially Illiterate People Into Financially Literate People

The real issue of our current financial crisis making front page news these days is not just the end result started from the weak housing market, fallout from the US sub-prime mortgage fiasco, sliding home prices, stock market volatility or geopolitical unrest in the Middle East, the collapse of Bear Stearns or Lehman Brothers, rising unemployment or inflation. Very easily, all these may be viewed as the real issue of our current financial crisis but in fact they are not. They are just consequences of the spending pattern in America, blowing out of proportion. So much so their country financial expert has put it as they are a country of financially illiterate people. Therefore, the real issue now is how to change this lot of "financially illiterate people" into "financially literate people".

This term "financially illiterate people" right away brings home a message for me. Our local schools have all along been paying a lot of emphasis on academic achievements. These days, some of them have even incorporated character building in our children curriculum. How about financial management education? Should the schools start to think about balancing their syllables - academically, character development and financial education?

Just before our country education system incorporate financial management education into their syllables or perhaps they may not even wish to consider it, won't it be better for us, as parents, to teach our next generation the value of money management or wealth creation, starting from as young as they can understand the value of money. Not to take the risk that their schools will look into the matter for us.

From statistics, young adults under 25 are now the fastest-growing age group to file for bankruptcies. Most social problems stem from financial problems. Therefore, it is always important to stress to our young ones that spending less money than they can earn is fundamental to their basic financial well being. Differentiating between needs and wants is a very important discipline we have to cultivate from young and be imparted to our next generation.

As parents, we have to set example to show our young ones that in order to lead a care-free life, arithmetically speaking, we need to have a personal net worth that is very heavy on the personal assets and very light on the personal liabilities. If possible, no personal liabilities at all.

Hence, "Living within one's means" should be our motto in life.



Writer: Doris Teo

A lover of nature. I truly enjoy and thank God for the abundant beauties around us created by HIM. Also blogging to share the joy of building lasting bonding with my children & living a care-free life with financial freedom. Feel free to visit my other blog. URL:http://doristeo.com