Conclusion
During the period beginning in 1970 until current day, the number of households with credit cards that had revolving, unsecured, credit lines increased by 350%. Deregulation of banking during that time period increased competition among banks, and the growth of technology lowered the transaction cost with which consumers could obtain credit. Needless to say, credit access and use exploded. Bankruptcies increased during that time period by 507%, and debt-to-income ratio among Americans more than doubled.
Times of unprecedented growth in the U.S. have often ended in a huge bust. It seems to be the nature of the business cycle. Recent years have been no different. However, one thing that was different about this last bust was …show more content…
Given the current state of the U.S. school systems focusing on standardized testing and increasing scores in math and science, financial literacy is fighting for a spot in the classroom. Many would argue that it has no place in the classroom, especially considering the larger impact that socialization has on personal finance.
However, this paper has shown that more has to be done than relying on personal finance to be taught at home. Many Americans do not even understand their own retirement plans, and many students do not have the support they need at home to learn the concepts. The students should become the true focal point. If they are not reached through some sort of formal education, the perpetual cycle of financial hardship will march on.
Ultimately, the proper mix of learning about financial literacy through socialization, work, formal schooling, and decision support appears to be the best answer in teaching students to become more financially literate. Today’s market has the largest access to credit ever. That is a great thing for our future economic growth. However, students must know how to utilize these credit options without hurting themselves financially and causing adverse long-term
During the period beginning in 1970 until current day, the number of households with credit cards that had revolving, unsecured, credit lines increased by 350%. Deregulation of banking during that time period increased competition among banks, and the growth of technology lowered the transaction cost with which consumers could obtain credit. Needless to say, credit access and use exploded. Bankruptcies increased during that time period by 507%, and debt-to-income ratio among Americans more than doubled.
Times of unprecedented growth in the U.S. have often ended in a huge bust. It seems to be the nature of the business cycle. Recent years have been no different. However, one thing that was different about this last bust was …show more content…
Given the current state of the U.S. school systems focusing on standardized testing and increasing scores in math and science, financial literacy is fighting for a spot in the classroom. Many would argue that it has no place in the classroom, especially considering the larger impact that socialization has on personal finance.
However, this paper has shown that more has to be done than relying on personal finance to be taught at home. Many Americans do not even understand their own retirement plans, and many students do not have the support they need at home to learn the concepts. The students should become the true focal point. If they are not reached through some sort of formal education, the perpetual cycle of financial hardship will march on.
Ultimately, the proper mix of learning about financial literacy through socialization, work, formal schooling, and decision support appears to be the best answer in teaching students to become more financially literate. Today’s market has the largest access to credit ever. That is a great thing for our future economic growth. However, students must know how to utilize these credit options without hurting themselves financially and causing adverse long-term