How About Economics Instead of Home Economics?

One of my Sunday morning rituals includes tuning in to a two-hour radio program hosted by Rick Edelman, a nationally known financial planning expert and author of a number of books including the best sellers “The Truth About Money” and “The Lies About Money.”

Like most call-in programs, whether focusing on money or sports, the host fields phone calls from listeners who seek a wizened opinion on financial matters – from mortgages to annuities and anything in between.

He also on occasion has some high profile guests come on and they in turn take listener’s questions. And this past Sunday he had on his program one Richard Cordray.

Now that name might not flip a switch for many of you, but Richard Cordray currently serves as director at the Consumer Financial Protection Bureau, a Washington D.C.-based organization that describes itself as a “21 century agency that helps empower consumers to take better control over their economic lives.”

Basically, it’s an independent body that assists the consumer financial markets ensuring the implementation of guidelines and fair rules.

In any event, when the question of debt avoidance arose, Edelman asked his advice on ways to help alleviate the staggering debt load currently shouldered by many in the country - particularly the younger generation who not only face colossal student loans, but absurdly high credit card balances as well.

Cordray summed up one potential solution in two words – “financial education.”

Now that’s not exactly a radical idea, as many of the state CPA societies as well as the AICPA have long been proponents of increased financial education for Americans and in fact establishing myriad programs to help achieve that goal.

But Cordray took it one step further.

He declared that secondary school students should be mandated to take at least one financial education course – much like a mathematics or foreign language requirement. He stated that a woefully low percentage of high school students even know how to balance a checkbook, or understand the basic underpinnings of how the stock market works – let alone the high percentages that usually accompany those regular credit card offerings that seem to find their way into the mailboxes of young adults.

Which probably goes a long way toward explaining why the average credit card debt among U.S. households is approaching  $8,000 or why millennials are struggling to pay off the roughly $4 trillion in student loan debt.

Now to be fair, there are some school districts across the country that have adopted that type of curriculum, but certainly not enough to put a dent in the massive void in financial education.

And it’s probably no coincidence that debt is a four-letter word.