LA Times Editorial: Increasing financial literacy

Posted by Kendall Harmon

In the not-so-distant past, redlining -- the practice of denying financial services to people based solely on their race, sex, surname or address -- deprived many Americans of the opportunity to build a prosperous life. Today many of us still suffer financially. But this time around, we're limited by too many choices rather than too few.

Financial illiteracy has become the new redlining. Vast numbers of us go to college and own homes and cars. Our kids tote the latest cellphones, and our living room television sets have been replaced by lavish home entertainment centers. But we don't know how to budget for our households or how to balance our checkbooks. Homeowners who misunderstood or ignored the inherent risks of adjustable-rate mortgages are losing houses to foreclosure in record numbers. (In California, 31,676 households foreclosed in the last quarter of 2007, more than twice as many as the previous record in 1996.) Shoppers who ignored the fine print on credit card agreements helped push consumer bankruptcies up 40%, to 801,840, in 2007. The average college student graduates with $2,200 in credit card debt and is more likely to drop out of school because of financial hardship than because of academic failure.

Read it all.

Filed under: * Economics, PoliticsEconomy

Posted January 27, 2008 at 5:06 pm [Printer Friendly] [Print w/ comments]
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