Is Financial Education The Cure For Credit Card Debt?

Forbes contributor Nick Clements delves into the issue of financial education to help the public: “The financial situation of the average American is grim. In a recent survey, 56.3% of people admitted to having less than $1,000 combined in their checking and savings account. The average household has $15,355 of credit card debt at an interest rate of 13.70%. More than half the country is living paycheck to paycheck. One common response from policymakers is to increase financial literacy training. According to the standard hypothesis, if people were armed with better information, they would have never taken out mortgages they couldn’t afford. But does it work? Unfortunately, recent data shows the limitations of financial literacy education. Getting people motivated to live financially healthier lives depends as much upon psychology and community as it does on classroom education. Getting people to focus on generating wealth, rather than surviving the month, is the ultimate goal of financial literacy training.” (forbes.com)