Personal Accountability Starts with Education

I’m a news junkie. Okay, I’m an NPR-listening and blog-reading junkie. I’ve been listening and reading many different commentaries on the collapsing financial structure. I probably shouldn’t be. I think it’s adversely affecting my mood. (Also I really hate the term personal accountability because it sounds like I don’t think that anyone else should be doing anything to help out. Which…just read on.)

One of the most interesting segments I heard on my local NPR affiliate was a segment where people where asked if the federal government should be bailing out these major financial institutions. Most the people who spoke were angry and said that the CEOs should reap what they’ve sown all these years.

Of course, that’s nice and dandy, except for most people don’t realize how much they could be personally screwed over if the institutions failed.

Don’t get me wrong, I am all for better regulations. I am all for better watchdog groups. I am all for prosecuting CEOs and others who’ve knowingly practiced predatory lending or broke the law in other ways. I do not think they should get huge severance packages that could feed me for the rest of my life.

The base question is Who thought it would be a good idea to run the economy on debt?

A lot of people have some finger-pointing, whether it’s Alan Greenspan, the Bush administration, greedy CEOs, bad auditors, home owners who took loans they couldn’t repay, etc.

One argument I’ve seen less of is how to make this stop from every happening again, and that, I believe, lies in personal financial education. Wall Street and a debt-filled, but bailing-us-out US government are no role models when it comes to finances. And, as a Gen-Y-er, neither are, for the most part, my parents and their fellow Baby Boomers who are currently by-in-large the movers and the shakers of this depressed economy.

Why isn’t there a required Personal Finance and Basic Accounting class for every high school graduate? You don’t just *know* how to set-up a bank account or get a mortgage. You aren’t born knowing how to buy stocks (like that dreadful commercial would like you to think) or invest in a sensible 401k. You don’t intrinsically know how to balance a checkbook.

I grew up with something of a home field advantage. Pre-divorce, my mother did all the accounting for the family business, and I helped her out since I was old enough to stuff envelopes and lick stamps. But even I was in for something of a shock when post-college graduation, I had a degree, about $700 to my name, needed a new place to live with my new roomie, and needed a job. Before my first paycheck, I almost didn’t know if I was going to be able to afford the gas to get to work. Granted, my family and friends were not going to be me starve or be homeless. It was a rough summer, but I did it and was even able to start saving money once my paychecks started.

But not all of us have the know-how to pull ourselves up by the financial bootstraps. A lot of us end up getting loans we can’t afford, end up defaulting, end up filling for bankruptcy, etc. Not to mention all the personal emotional and relationship consequences money can cause.

Currently, things are tight financially at Casa della Erica. Jason and I recently moved, and it was Jason’s birthday and someone (me) went a little over the top with buying him presents. We’ll weather the storm and we know that now is not the time to spend extra money at the comic store or go out to eat. What we’re not going to do is spend money we don’t have. I know I have miles to go when it comes to preparing for my future financially.

If we the people learn how to budget, learn how to search for the best loan options when we need one, etc., then maybe we’ll teach a new generation to have a better relationship with money. We don’t have to financial experts, but we did need to learn the basics and how to tell an expert from a phony when it comes to things we don’t know about. Or as Confucius said, “Real knowledge is to know the extent of one’s ignorance.” And maybe then we’ll have a stable economy and a better relationship with each other and our world.

And for our stability and money’s sake, make Suze Orman required reading.

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