Becoming Financially Smart
The Obama government has created a new Bureau of Consumer Financial Protection containing an Office of Financial Literacy. This follows the President's Council on Financial Literacy that was established by George W. Bush in 2008. Meanwhile, the Treasury Department, SEC and 20 government agencies joined forces six years ago to create a website that has loads of financial information to educate and help us: MyMoney.Gov.
OK, so we have bureaus, offices and sites that are supposed to provide and protect financial literacy for all, but will a government Financial Literacy Office fix our current money problems and increase our financial acumen? Maybe yes, maybe no.
In reality, from childhood to adulthood each person develops certain habits and behaviors to deal with his or her financial situation on a daily, monthly and yearly basis. Bad habits are hard to break and new behavior is hard to learn.
When things are going well - income is good and net worth is increasing - expenses aren't tracked as closely and strategic saving is less of a concern. You think this cash flow will last forever so there isn't much need to plan for two year’s worth of rainy days.
But if the underlying economic rules or assumptions change causing a serious negative impact on your finances, harmony goes out the window and the desire to financially survive comes to the forefront.
Talking about money and your financial situation is tricky. It's a very personal and emotional topic filled with ego. Many married couples haven’t had an open financial dialogue with each other from the beginning of their relationship, so when finances become strained the topic of money becomes hypersensitive.
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