Are we getting dumber about money?
Meg at All Financial Matters bemoans her friends’ and associates’ lack of knowledge about managing money.
“Every single one of my friends and peers, it seems, are people who couldn’t explain compound interest if they had to, ignore the 401(k) matches offered by their employers (despite my pleas), are comfortable having debt, and spend like they all have huge inheritances coming to them,” she writes, adding, with hyperbole, we hope, “And these are my college-educated peers. Fellow finance majors, for crying out loud.”
Meg wrote about financial illiteracy and its possible impact on the future after reading MP Dunleavey’s “Will our kids be dumb and broke?” at MSN Money. Meg isn’t sure about the answer to that question, but she does have some observations. Among them:
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Young adults probably don’t know less about finance than previous generations did, but those folks had fewer financial complications. “They had pensions, they didn’t have credit cards, and no lender would give them a loan they couldn’t afford to pay back. You had no choice but to live within your means,” she writes. “That is obviously not so today.”
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Lack of knowledge doesn’t stop with personal finance. Today’s young people are masters of video games, not books, and seem to know less about things like literature, history and science.
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A large number of uneducated people negatively affects a nation’s productivity and well-being.
“I realize every generation probably goes through some sort of ‘we’re going to be the end of civilization as we know it’ crisis, and maybe I’m just pessimistic,” she says. “But is it just me or are things actually getting worse — at least for Americans?”
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