Financial Education K-12
The Cure for the American Debt Catastrophe
San Marcos, Texas, (October 19, 2011)
Do you ever wonder about your financial future and job security? If you’re like most Americans, then the answer is “yes!” With all of the uncertainty surrounding the debt crisis in America and the personal savings rate in the negative, encouragement and support to build savings and net-worth are needed now more than ever. Everyone across the board is well aware that the American economy is in bad shape. But what most people may not know is just how severe the dilemma truly is.
Devastating effects of Economy
The destructive effects of the deficit have hit the nation with full force. Americans have accumulated 2.5 trillion in personal consumer debt! From just 2007-2009, 67% of Americans have experienced a huge plunge in their total wealth, a median 45% decline! It is extremely difficult for workers to bounce back from such a huge plummet in their income in only a matter of two years. An astounding 77% of Americans are now living paycheck to paycheck. 28% of the country doesn’t pay their bills on time, and 40% carry over credit card debt from month to month.
Nearly 2/3 of Americans are experiencing financial problems such as paying for gas, food, rent or mortgage, healthcare and insurance. Many American workers are worried about making ends meet, concerned about bankruptcy and losing their homes, not having enough money to cover expenses, and mounting credit card debt. Not to mention they are concerned with getting a good job or raise, keeping their job, coping with loss of money in the stock market, and managing personal and consumer debt. Clearly, financial stress is on the rise.
Effects in Individuals
If the deficit can bring down a country as powerful as the United States, imagine what it can do to an individual at the personal level. Family lives suffer from economic frustrations. People are now bringing more stress home from their jobs along with the work. 8 out of 10 Americans claim that money, or rather lack of it, is a significant source of stress in their lives.
30 million workers in America – 1 in 4 are seriously distressed and dissatisfied and causing negative impacts in individuals, families, and employers. In a perfect world, people would be able to keep their financial pressure and home life issues separate from their work-life. However, at least 15% of U.S. workers experience so much financially related stress, that it negatively impacts their work productivity. Their downfall of productivity may lead to losing their jobs. Thus, a vicious cycle is created that is tremendously difficult to escape.
It is impossible to separate your life so completely. When you are not feeling good about your future, it will have a negative impact on your home life as well. Statistics suggest finances play a leading role in 80% of all divorces in America. More than 52% of Americans experience anger, irritability, fatigue, and sleeplessness due to fiscal struggles.
Additionally, monetary distress can take a heavy toll on one’s health and mental well being. An astonishing 75%-90% of all doctor’s visits are stress-related. Financial struggles may lead to stress, anxiety, depression, insomnia, high blood pressure, weight gain or loss, stomach problems, ulcers or digestive problems, aches and pains, and other general sickness. There is a direct correlation of financial issues and health status. Needless to be said, this certainly adds to the frustration of being muddled waist-deep in debt. It is now estimated that it costs $15,000 per year per worker for financial stress related illness.
Who is to blame?
You may be wondering why so many people have found themselves burdened with financial suffering. People have blamed everything from A-Z for the damaged economy. Many are riddled with the seemingly complexity of how the situation became so dire. Who is the culprit in this case? The answer is really quite simple. The economy is at an all time low due to the lack of financial education within American citizens. Many citizens do not know how to save, invest, borrow responsibly, and plan for their financial future. 43% of Americans do not budget or track their expenses at all! And 63% have not viewed their credit score in the past year. 32% do not spend any portion of their income for retirement.
The Secret Finally Revealed
How can the government or agencies fix the health care issue before fixing the U.S. financial problem? A financial education K-12 program is the solution. No, the employer doesn’t have to pay for 12 years of training, nor does the American W-2 or 1099 worker have to go back to school and get a diploma in ‘money education.’ (Maybe it’s not such a bad idea.) But a single money management education program that does cover K-12 will work. Money management training in America is essential.
America needs to become the leader again in having ‘savings’ rates of 10% or more. While the average, or even the higher income American, needs the education; the members of congress, their staff, their lobbyists and aids, should attend a K-12 financial school as well.
Although this skill is usually neglected, financially literacy is becoming an increasingly important life skill needed to survive in modern day America. Knowing how to manage your finances is a powerful skill. The knowledge needed to manage your finances can prevent an enormous amount of issues.
People are encountering debt problems at a younger age than past generations due to manipulative credit card agencies targeting young students. Teens now have to make important decisions, such as taking out thousands of dollars in loans. Consequently, it is imperative for the youth of America to become financially literate at a young age in order to steer clear of debt as an adult.
If the parents of today’s youth cannot manage their own finances, how can they teach their children to do so? Today only 13 states require a personal financial course to graduate high school. If high schools and colleges are graduating financial illiterate students, it is no wonder there are so many adults in the real world who have financial troubles.
Financial Education K-12
One solution to reconstructing the American economy is implementing financial education programs in public schools. Although there are immense resources of financial education among adults, the progress to educate youth on finances is very slowly on the move. Youth financial education should be applied in all public schools, grades K-12, rather than the wait to educate students in high school and college.
Educating younger generations on managing their finances will prevent them from falling into debt at an adult age by making uninformed decisions. Instead of making the same financial mistakes that brought our economy to shambles, they can finally break the vicious debt cycle and create wealth in America. Studies have shown that students who took a required course in finances were more likely to budget, save, and pay their credit cards in full. They were also less likely to max out credit cards.
Although many parents want to educate their children on money-management, many do not know how. Unfortunately many teachers do not know the answers either. In order for financial literacy programs to be effective, teachers need to be properly trained and learn to create their own financial prosperity, first and foremost. These programs should meet national academic standards. The course or program should also be a requirement for all students.
Help is on the Way
Ruben Ruiz, MSFS, ChFC, RFC , CEO, Author, and Award Winning Financial Advisor, offers educators, teachers, and students financial education, training, development, consulting, coaching & advisory services through the selection of financial programs, where they can select one or all programs to provide financial empowerment. Ruben also writes books, in English and Spanish, providing a wealth of information on the ever-so important life skill of money-management. His workshops, boot camps, seminars, and books are the key to creating financial independence.
Mr. Ruiz will be one of the featured authors at the Texas Author Day, sponsored by the San Marcos Public Library, and will be reading and signing his new books.
My Own Money Blueprint provides readers with the tools to gain financial security, peace of
mind and an independent lifestyle by learning the 12 models that make up your “Own Money
Blueprint.” The highly-anticipated book is soon to be released, and will be available
December 1st, 2011.
The Richest Latino in America is the 21st century version of “The Richest Man in Babylon.” It is the 1st Self-Help, Financial story or ‘novella’, written by a financial advisor. It contains many memorable characters, humor, wealth principals, and easy, financial tips and techniques for all of America to manage their monthly paycheck and turn it into ‘net worth’ between the story pages of a novella that is guaranteed to hold their interest.
Don’t let the title “The One-Hour Hispanic Millionaire” fool you into thinking this book must be fictional. In actuality, it contains 30 educational chapters, that help the average American learn in ‘one-hour’ a week to create wealth, achieve true financial independence, and yes, build a goal-based ‘million dollar’ net worth.
About Ruben Ruiz
Ruiz is an award-winning author, financial coach, and CEO of The Ruiz Financial Group, LLC. Ruiz is a member of the Financial Planning Association (FPA) of San Antonio and South Texas and has served in various positions for the organization, including chairman of the Board. Ruiz teaches, educates and provides consulting services to clients and associates in wealth management and financial planning. He has published three books on financial planning & money management.Mr. Ruiz has a bachelor of business administration (BBA) degree from Southwest Texas State University (Texas State University) and a master of science in financial services (MSFS) degree from the Richard D. Irwin Graduate School of The American College, Bryn Mawr, Pennsylvania. He holds the professional designations of the chartered financial consultant (ChFC) and the registered financial consultant (RFC).
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