Posted by
Playful Walrus on Thursday, August 16, 2007 3:33:58 PM
When I was in high school, I took a semester in Economics. I don’t recall if it was required that everyone take Economics, or if it was one of several options that would fulfill my school’s high standards for graduation. Another class I took was definitely an elective, and it was about how to live on your own, including, among other things, renting, buying, banking, and signing contracts.
I can’t help but think most of our population needs more education in economics and personal finance, considering the financial mess people make of their lives and the fiscal policies we’re allowed our elected officials to implement.
The current “crisis” of people not being able to deal with the bad home loans and mortgages to which they voluntarily tied themselves, and the proliferation of “payday loan” businesses is a testament to bad personal finances. That people think new government programs mean “someone else” is going to give them something for free shows ignorance of fiscal reality. That people think more government involvement in business will make us all more prosperous shows ignorance of economics.
I heard an ad on the radio in which one woman laments to another that a dress she wants is on sale, but that she can’t get it because she is waiting for her next paycheck to have enough money to buy it. The second woman tells her to use a payday advance loan to get the dress. What is scary about this ad is that it was effective enough for the payday loan business to run, when anyone with the slightest understanding would see that any savings on the dress would be more than negated by the interest on the loan. But I suppose a woman who has to wait for her next paycheck before being able to make another purchase wouldn’t pick up on that.
Every tax means less money that you - and anyone else subjected to the tax - will have to invest, save, or buy goods and services.
These matters should not be complicated. If you want better personal finances, spend less money than you make. Don't buy a home if you can't do it without a loan that can have skyrocketing payments. To help the larger economy, vote for politicians who will spend less, tax less, and interfere less.