Recently President Obama declared April as National Financial Literacy Month.
In recent years, our Nation's financial system has grown increasingly complex. This has left too many Americans behind, unable to build a secure financial future for themselves and their families. During National Financial Literacy Month, we recommit to teaching ourselves and our children about the basics of financial education.
I've always felt that financial education should be taught in high school. I'm not talking home-ec, at least not the the home-ec I attended at Hazen High School where I grew up in Renton, where we made up incomes and came up with a rough budget. I'm talking about a detailed course where students would focus on the benefits and consequences of credit and debt.
I think it's great that the President is bringing attention to Financial Literacy. During the subprime era of mortgage, I met with people who wanted to buy a home because their friend or co-worker just did. They had no idea what financial responsibilities coincide with owning a home. They often wanted to buy as much as they could be qualified for based on guidelines at that time even if the mortgage payment or program was not suitable.
More from President Obama's proclamation:
The new Consumer Financial Protection Agency I have proposed will ensure ordinary Americans get clear and concise financial information…. While our Government has a critical role to play in protecting consumers and promoting financial literacy, we are each responsible for understanding basic concepts….
I wonder what is an "ordinary American" and what if you're not an "ordinary American"? In his proclamation, he also talks about how our "recent economic crisis was the result of irresponsible actions on Wall Street and everyday choices on Main Street" and includes "large banks [that] speculated recklessly". His list of who's at fault no where includes our Congress who mandated that Fannie Mae, Freddie Mac and FHA create programs or different guidelines to help more Americans buy homes.
From the Wall Street Journal:
Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.
But I digress…
President Obama is promoting a website they've created for financial literacy which appears to be an assortment of various government links organized on one site. It' looks like it's well meaning advice but I'm not sure it's the best or most practical advice–very similar to HUD's book on buying and financing your home. The site also has information that is very biased, in my opinion, about financial tools such as reverse mortgages, which are not right for everyone but when used in the right situation, can make a huge difference for the better in a seniors life. I also found some information about credit repair that would potentially provide the result a consumer would be looking for.
I highly recommend that you subscribe to Get Rich Slowly. This is a fantastic blog that is packed full of common sense financial information on getting out of debt and building your savings. J.D. Roth's blog was recently named the most inspiring money blog by Money Magazine.
Washington State's Department of Financial Institutions also has a blog that you may find interesting: Money Talks. I'm a new subscriber to this blog and so far, the information seems very good. In fact, it was from DFI's blog that I learned about the Twitter hashtag for April's Financial Literacy Month: #FinLit10.
Of course I hope you're a subscriber to my blog, The Mortgage Porter. I don't only write about mortgages or post interest rates on my blog, you'll also find quite a bit of information about credit scoringwhich impacts your life every day. I cover other topics too. You can subscribe in the upper right corner by entering your email address and you can un-subscribe anytime.
During April, I'll share information in recognition of National Financial Literacy Month…actually I hope that's what I've been doing at Mortgage Porter for the last couple of years!