Why You Should Take Charge of Your Financial Education

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Too many times, people leave their financial education in the hands of happenstance, circumstance, life lessons or in the hands of limited sources of education. As I learned from personal experience (by having to re-train my mind from the worst financial advice I ever received), it’s a dangerous move to leave the details of your financial education completely in the hands of others – unless you know who those others are and what they believe.

There are hundreds – maybe even thousands – of personal finance books on the market that claim that they will teach you about money how-to and management. They all claim that their path to financial education is the “best” path. But is it?

A Financial Education that Works

Years ago, when I worked for a large banking chain, the “experts” at the company did a great job of “teaching” me that credit allows consumers a pathway to a so-called better life. Being committed to learning and education, and allowing the bank to be my sole source of education on money. After all, they were a large lending company – why shouldn’t they know what was best in terms of money management and lending?

I believed what I was taught and became one of the best sales staff in the statewide area. My boss and I performed very well for a number of years, being among the top mortgage sales staff in the state until the housing bubble started to deflate. We thought (and were taught) that we were doing consumers a favor. But what we were really doing was getting them into debt. Was that the best thing? Maybe for some of them, but for the majority of our customers, probably not. Too many people pay much too much money in interest on their debts when there’s a lower interest rate available.

My boss and I really worked hard to give good service to our customers. Our hearts were in the right place. But because we’d not taken charge of our financial educations, we believed what the banking big shots were telling us as sales reps about how we were doing consumers a “favor” by getting them approved for the maximum mortgage amount they could qualify for, hooking them up with various loans, opening new credit cards for them, etc.

Take Your Financial Education into Your Own Hands

Instead of taking my financial education into my own hands, I learned and believed what the one source I had was telling me. The problem with that is that my “one source” had ulterior motives: to make money off the interest payments of borrowers. They told me that their goal was to provide the best service to customers, but was that really their goal? The liberal mortgage lending rules of the 90’s and early 2000’s says otherwise. My mistake was not looking further into what I was told and doing my own independent learning on the ways of money management.

Your Money, Your Choices

This isn’t intended to be an anti-banking rant, rather, the goal is to stress the importance of taking one’s financial education into their own hands. Read what you can from the many different sources about money management, then weigh and analyze what you’ve learned and see if those sources and what they teach hold any validity or wisdom. ┬áBy educating yourself about money management, you can make choices with your money that best suit you and your family’s financial values and goals.

By taking charge of your own financial education, you can help ensure you’re making the right financial decisions for yourself and/or your family.

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2 responses to “Why You Should Take Charge of Your Financial Education”

  1. Brian @ Debt Discipline says:

    Great point, Laurie! Now that I have my own financial education updated and under control, I’m teaching my children as much as possible. These are things that they are not learning in school. Beyond that, I’m working with my local community to help spread the financial literary message. The more people that become self-aware the better.

  2. Fervent Finance says:

    Yahoo Finance just had an article that asked 3 basic finance questions to 20-somethings and the average score was only 1.8 questions correct. Part of my goal of being part of this online financial community is to understand why people don’t want to take charge of their finances just as you put it in your post. From personal experiences I’ve found people don’t want to learn about their finances because it’s too scary, too confusing, I’m too young, etc. I guess doctor’s would have the same feelings as us when it comes to people exercising and eating right. Here are the 3 questions below:

    (1) Do you think that the following statement is true or false? Buying a single company stock usually provides a safer return than a stock mutual fund.

    (2) Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow: More than $102, exactly $102, or less than $102?

    (3) Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account?

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