START A PETITION 25,136,189 members: the world's largest community for good
START A PETITION
x
May 23, 2013

SOURCE

For years there has been also sorts of chit-chat and discussion about how financial literacy will magical cure the woes and troubles of consumers and prevent them from getting into financial trouble. That's just simply wrong.

While financial education course may create more awareness on how to evaluate some financial products, that training is no good if it's not applied. And not everyone is going to be a good financial manager no matter how much training you give them.

It's not like we have an obesity problem in America because people don't know about eating well, portion control, and expertise. And it's not going to be tremendously different in the financial world if we trained everyone about interest rates, contract clauses, and fees.

Even recent work by the Consumer Financial Protection bureau is trying to work hard to dumb-down financial transactions so we can make some sense about getting a mortgage, credit card, or taking out a student loan.

But as one author noticed recently:

When consumers make poor financial decisions, they often do so because they lack information and understanding of product features. Financial literacy and sophistication is shockingly low: About one-third of the U.S. population understands the concepts of compound interest or how credit-card debt works. Such financial illiteracy is correlated with high levels of debt and high fees for financial services, and is greater among people with low incomes and low education, as well as minorities and the elderly.

I've never seen a study that shows the average debt literacy rate among the population. Debt literacy would be the skills, knowledge and experience to properly handle a debt emergency. While a third of the population might be considered to be grossly financially illiterate, I would estimate that close to 99 percent of debtors would be debt illiterate.

Studying the issues surrounding debt is just not something people do in advance. instead, rather than become experts on how to get out of debt when they land in trouble they often believe or turn to the first person that gives them a magical solution they want to hear about.

The idea that paying for exceptional advice and an independent opinion from a debt coach is a smart thing to do seems foreign to people in trouble. Yet that professional and experienced advice is just what the doctor would order for a higher chance of a better result.

Debt relief companies are not in the advice business. They are in the widget selling business. Rather than independently evaluate your situation and provide fair, independent or balanced recommendations they most want to sell your their services and the "consultation" is really not more than a closing sales pitch.

Visibility: Everyone
Posted: Thursday May 23, 2013, 7:02 pm
Tags: what good about blog debt solutions financial associates advicebradley [add/edit tags]

Group Discussions
Comments
Or, log in with your
Facebook account:

Author

Kamilla B.
female, age 26,
Germany
KAMILLA'S SHARES
May
30
(1 comments  |  discussions )
http://fox6now.com/2013/0 5/28/timeshare-fraud-more -prominent-in-challenging -economy/ MILWAUKEE (WITI) — Katina Pendleton is angry and she has a right to be – she recently lost thousands of dollars in a timeshare resale scam. Pendleton f...


SHARES FROM KAMILLA'S NETWORK
No shares


MORE MEMBER BLOGS
Mar 31
Blog: How to Extend the Life of your TRIAD Boilers by Kayleigh L.
(0 comments  |  discussions ) — How to Extend the Life of your TRIAD Boilers   Corliss Engine Review Every user desires to prolong the life of a unit. TRIAD assists their clients in achieving this important objective by informing them of ways they can avoid problems and sh... more
Feb 27
Blog: Dr Oz Weight Loss - The 100% Natural And Very Efficient Diet Pill by Debra S.
(0 comments  |  discussions ) — Yes, Dr. Oz called Garcinia Cambogia Extract (HCA) the Holy Grail of Weight Loss. He went on to say, “Anytime I see a scientist get this excited about something like Garcinia Cambogia Extract and when I looked through some of this research and ... more
Blog: My Favorite Websites by krysta I.
(0 comments  |  discussions ) — IFAW: www.ifaw.org OCEANA: www.oceana.org PETA: www.peta.org EARTH 911: www.earth911.org ANIMALs ASIA: www.animalsasia.org more
Feb 21
Blog: testing one two three by Geoff M.
(0 comments  |  discussions ) — hello world more
Blog: Garcinia Cambogia Reviews From Actual People Garcinia Pure Extract Is A Huge Success February 20 by Dany M.
(0 comments  |  0 discussions ) — Garcinia Cambogia Reviews From Actual People Garcinia Pure Extract Is A Huge Success February 20 Garcinia Cambogia System The Dr. Oz Lose Weight Quick Process Without Having Side Effects He went on to say, “At any time I see a researcher get ... more
 
Content and comments expressed here are the opinions of Care2 users and not necessarily that of Care2.com or its affiliates.