With seemingly ever increasing personal bankruptcy rates, this statistic should not come as a surprise.
The U.S. Department of the Treasury conducted its annual National Financial Literacy Challenge last month.
The result?
Of the 46,000 students who took the test, the average score was 56 percent.
The general consensus is that the average age of someone filing personal bankruptcy is getting younger and younger (*age is not actually declared in a bankruptcy filing).
It has also been observed more and more students are using student loan money to pay minimum payments on credit cards and this trend does not appear to be improving.
(Full Disclosure Note: This is just the kind of thing that led to me writing Winning the Cash Flow War and speaking in schools. This can be avoided with just a few weeks of “real world” Financial Education).
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I suppose this is where you look for some witty insights to my mind. A "bio" of sorts. Here is the deal... I ride motorcycles, smoke cigars, golf, kayak, fly, race my car through the mountains, write (a lot), and travel extensively. I am almost old enough not to care what other people think about me...almost. ~ Godfather
I think one of the reasons the apparent consensus on younger people claiming bankruptcy is partly the parents fault, and partly society’s fault. They see bankruptcy, at least under the old laws, as a way to gain a bunch of stuff, and not pay full price on it over time. They saw their parents do it, they see the ever-increasing commercials for bankruptcy lawyers who will get them out of debt, etc etc.
On a personal note..I knew a guy who was just starting a home based business. He saw the $$$, jumped in, and because he had high debt, (new truck, new house, new wife and kid) and low income, in order to help invest in his business he decided rather than reducing his debt the resposible way, he’d claim bankruptcy, keep his stuff, lose the debt, and get rich. Seems to me, if a guy like that is planning on running his own business, I wouldn’t want him into me for any money….I’d get screwed.
When the government and the parents can’t handle money, how can we expect them to put a priority on teaching our kids how to?
I totally agree with the ’setting the example’ comment above. It’s one of the main premises in my new book, The Ultimate Allowance. We must start setting an example for our kids, from the top town. We must start talking to our kids about everything financial and stop making money mean more than it is and last but not least, we MUST start letting our kids have tons of opportunities while they are young to practice with money. If you want more information, Google, The Ultimate Allowance by Elisabeth Donati. Thanks!