The Very Real Problem of Financial Illiteracy

  • On : April 24, 2015

Whenever there’s an election coming up, we hear statistics related to education, including those about literacy. However, what the news rarely reports on is how bad this country’s financial illiteracy problem is. The vast majority of people simply don’t know enough about how money works. Just as an illiterate person couldn’t hope to read a book, those who don’t understand their finances are doomed to miss out on opportunities all around them and make the same mistakes over and over.

Take the absolutely terrifying statistic that 30% of Americans are regularly late on making their payments. As a result, banks are estimated to collect $32 billion a year in additional fees. That’s roughly $10 for every single American, including children, per year! Clearly there is something wrong here.

Now, we’re not suggesting the American public doesn’t understand that overdraft fees exist. Rather, we’re saying that there is a very important disconnect happening when more people aren’t realizing what a waste of money that is.

If you’ve been paying attention to the economy over the past seven years or so, it’s evident that private citizens aren’t the only ones who don’t understand how finances work. The recession was due in large part to politicians making risky gambles time and time again.Fortunately, you don’t have to be a part of this cycle. At Baker DMM, we love educating our clients about their finances and helping them to understand their options.

You have a number of options if you want an accounting firm who will take the wheel for you and tell you when your finances get there. However, if something goes wrong, you’ll be left stranded. At Baker DDM, we provide you with top-notch service and a first-rate education in finances, and we’ll be there with you every step of the way.

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