The youth have been educated into a mountain of debt, and that mountain is still growing.
Why is that a problem?
Aristotle taught his peripatos that "money-making is an obligation, since wealth is not the good we are seeking. It is merely useful for the sake of something else." We all know that money isn’t needed for happiness, but I’ll tell you this much — it certainly helps.
Money, sex and communication. Those are the three most important factors in a relationship, and the vast majority of relationships fail because of poor stewardship in one of these areas. Charts like the one below are worrisome because as much as we’d like to pretend it’s not true, money affects our relationships, and thus, our happiness.
The US student debt is no less dismal.
Forbes reports that two thirds of US students graduate in debt, contributing to a total student debt of $1.2 Trillion.
It’s not exactly a joyous topic to dwell on, but here’s some good news (finally!).
We’re not going to just look at the numbers and whimper like sad puppies. We’re going to do something about it.
Here’s what we can do.
Teachers are the Key
It’s a saying that’s been hammered into our brains from day one, and now, sadly, it’s become rather cliche. But that doesn’t mean it’s not true — knowledge is power. Teachers are the key. Yes, the education materials should focus more heavily on financial literacy and solid budgeting principles, but teachers have plenty of wiggle room in what they choose to present and how. Financial education can show up in any class, even if it’s only a bite-sized piece of advice.
Parenting is Still as Important as Ever
Teachers should only bear part of the responsibility for a child’s financial education. What parents teach their children from an early age sticks with them forever. There’s all sorts of children’s books about finance basics.
Teaching a child the basics of money management can be the difference between them living in a mansion or under a bridge. Debt is an ugly thing. None of us want our children weighed down under the growing weight of student loans. So let’s do something about it.
Businesses Need to be Involved
When businesses get involved, things happen. Why? Because businesses have the cash it takes to catapult education initiatives to success. Pushing the government to subsidize and provide tax incentives for donations to schools offering finance-focused programs will bring about a massive change in the education system, which will result in a lower student (and overall) debt.
It even makes sense economically. When people have less debt, they have more buying power, and the economy thrives on big spenders. It also makes sense on an emotional level. When people are happy, they work better — there’s no question, people with less debt are generally happier than people plagued by the stress of debt.
Now for the most important factor. You.
You are the most important person to educate financially. Teach yourself how to manage your money effectively; how to avoid debt, and climb out of it if need be. As you learn these things, through reading, classes, debt-reduction clubs — and most critically, life experiences — you’ll begin sharing how you beat student debt with the people around you. Those seeds of knowledge will grow exponentially.
I’m not saying it’ll happen overnight, but we can eliminate this debt mountain, chunk by chunk. It can happen and it will because it must. Our happiness depends on it.
UK Student Debt Chart: Source
US Student Debt Statistics: Source