Law Professor Says Financial Education Should Stop
I’ve heard some pretty ridiculous things in my lifetime – short as it has been – but this one takes the cake. And the fact that it came from a law professor, someone who’s supposed to be at least mildly intelligent, makes it worse!
According to Lauren Willis, an associate professor at Loyola Law School in L.A., we should stop trying to teach people about their finances. Apparently it’s a big waste of resources because people just don’t get it. And those who think they do get it have some false sense of understanding that cause them to make worse decisions. Then, after insulting most of the population, she goes on to say that people can’t rely on banks because they don’t have the consumer’s best interest at heart. Bank products and services need to be regulated because they’re bad for the average consumer.
Color me stupid, but how does that make any sense?
First, people aren’t intelligent enough to take simple financial education and make informed decisions with it, but then, they can’t rely on banks to help them make those decisions because banks just want to screw them. Gosh, where are people supposed to turn? Lawyers? Yeah, cause that’s soooo much better than the banking industry.
Oh, and my favorite part was when she talked about how the financial industry is always changing and that’s the reason it’s too hard for people to keep up. She then compares this to sex education. Apparently, even though sex education isn’t working and is a waste of resources as well, it’s justified because, as far as she knows, girls still get pregnant the same way they did when Willis herself was in high school.
WOW!!!
OK, if we’re talking investments, Wall Street, and complicated bonds then I’d say it’s probably a good idea to tell a person to seek advice from someone who has been thoroughly trained in those topics. The average person may not understand investments and with only a little knowledge on the subject, they know just enough to get themselves in trouble with it.
However, when it comes to basics, people NEED to have an understanding of finances. Things haven’t changed that much that the basics of balancing a checkbook, developing a budget, and knowing that you shouldn’t spend more than you make are too far over the average consumer’s head. Gimme a break! I’m still trying to figure out what possessed this woman to say that financial education was a waste of resources and should be stopped.
A basic financial education should include the following, and I’m talking bare minimums here:
- What a checking account is
- What the difference between checks and cash are
- How to balance a checkbook
- How to make a budget
- How to live within that budget
- What credit cards are
- How credit cards work
Those are the basics. The bare minimums that I think every high schooler should know when they leave school. Those things haven’t changed. Last I checked, we all still balance a checkbook pretty much the same way. Sure, we have our own ways of recording stuff, but balancing pretty much works like it always has.
This woman’s idea that financial education doesn’t work because things are constantly changing is crap – at least when it comes to the basics. I can understand her point about insurance products and investments, like I said, but when it comes to banking 101, people need to be taught and I think it should be a required class in high school.
We’re a nation crippled by our debt, both in the government and on a personal level. Willis says the government needs to step in and regulate these banking products to help consumers, which in some cases is true. But, the government can’t even regulate their own spending. We’re owned by several different countries that certainly don’t have our best interests at heart and the average household has about $30,000 in debt. Knowing that, she honestly believes the answer is to stop financial education? Yeah, ok.
This kind of stuff really irritates me. I don’t spend my days trying to turn people in financial planners, but I do think consumers should have enough financial knowledge to make informed decisions and take responsibility for their financial futures. I think it’s totally contradictory of Willis to say that financial education doesn’t work; they should seek the help of professionals, but then turn around and say those professionals are sharks.
She doesn’t offer any real solution to the problem, she only states that statistics show financial education doesn’t work; therefore it’s a waste of resources. Well, to use her own example, sex education doesn’t work either. Girls are getting pregnant earlier every year. That doesn’t mean I think the program should stop. It’s still important that these girls know the basics. Same is true of finances.
My goal in banking is to help people avoid the mistakes that I made. That’s why I got into banking. That’s why I write for this blog. To EDUCATE people because I’ve been there and made the mistakes. It makes life a lot harder. That’s why we have people like Suze Orman and Dave Ramsey. I may not agree with Ramsey’s methods, but at least he’s educating people. And look at the following that both Orman and Ramsey have. Obviously, people feel financial education is worth it and it’s beneficial to them and their situations. So, I don’t know where Willis got that financial education doesn’t work, but apparently she needs to stick to law and leave finances to those who actually know what they’re talking about!
What do you guys think? Is financial education something we as a nation should abandon?
(I’ve never left comments on posts, and this is my second one!)
How can anyone in their right mind make a statement such as this one? As a society and as decent people, we must make every attempt to educate everyone about everything. What a person chooses to do with that knowledge is ultimately their responsibility. By not educating anyone about anything is the quickest way to have blame laid at our own feet. Individuals do not take accountability and responsibility for their own actions, especially when “no one told them” something. By ensuring education of any kind, is made available and accessible to the “masses,” leaves blame squarely on those that chose to ignore it or not read it to begin with. I sure as hell wouldn’t want Ms. Willis to ever represent me in a legal environment. If she can make such a broad and ignorant statement such as that, I can’t imagine she’d be a very good lawyer. She’s the type that give lawyers a bad rep. If I have wisdom and knowlege to pass along, I feel it’s something I have to impart to others. They can do what they want with it, but to make such a statement that “they just don’t get it” is insulting and makes us all sound stupid. Some learn from their financial mishaps and others don’t. It doesn’t mean we shouldn’t continue to provide information, ways to understand debt and ways to get out of debt. I’m no financial wizard, and I’ve only been reading PF blogs for a few short months, but the things I’ve learned in that short time makes me wish I could get a “PF do over” so that I could be a smarter finance person. I’d feel worse off if the information wasn’t there for me to utilize. I may not “always get it,” but at least I would have myself to blame.
I think the bigger issue is parents should have the responsibility to pass the mistakes they made to their children so they do not repeat them. Today generations are saving less money and generating more debt. And the problem is not stopping. The last time we saw this was the Great Depression.