TIME Personal Finance

Jacking Up Your Crippling Debt Just Got a Lot Easier

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Now you can instantly own the things you see on TV and read about in magazines

Americans haven’t been much good at waiting for things since banker A.P. Giannini popularized consumer credit a century ago. But what began as productive acceleration—a home to live in and build wealth; a car to get to work in and get ahead—has turned into alarming warp-speed consumption. It’s one thing to instantly hail a cab through the Uber app on your smartphone or get a meal delivered in 45 minutes via Seamless. You may actually need those things. But what about a pair of fetching high heels you read about in Vogue or the trendy home décor you see on a TV show?

Through technology you can have those things right now too. Yet things you want—not need—rightly belong in another basket, one that you consider for more than a nanosecond and for which you have put away money rather than purchase with plastic. This is the new world we live in, though. The cable station TBS and the retailing giant Target have just teamed up to allow viewers of Cougar Town, a popular sit-com starring Courtney Cox, to instantly buy dozens of items they see while watching the program. Check out the first shoppable episode archived at TBS.com/Target.

In another blow to delayed gratification, MasterCard and publisher Conde Nast last fall unveiled technology that will allow anyone reading Wired, and eventually Vogue, Vanity Fair and other magazines on a tablet to instantly purchase the items they read about by tapping their screen. This isn’t just for advertised goods, but for items described in editorial text as well. You can own that little black dress before finishing the sentence.

eBay and Amazon are testing same-day service. Wal-mart is looking at the concept. Google Shopping Express has a pilot program and hopes to deliver goods within hours of ordering from the likes of Walgreens and Toys ‘R’ Us. As Matt McKenna, the founder and president of Red Fish Media, a digital and mobile marketing agency, told The New York Times: “The whole world right now is about instant gratification.”

MasterCard is in hearty agreement. In announcing the deal with Conde Nast, Garry Lyons, chief innovation officer, said, “Today’s consumer should not have to think about the shopping process. When they see what they want, they should be able to get it as quickly as possible.” Let’s allow that to sink in for a moment. Do we really want impulse shopping at the speed of light?

Certainly, this isn’t what Giannini had in mind when he opened the doors to broader consumerism. The convenience of instant purchase cannot to be denied, but neither can the likely negative impact on individuals’ finances—and in the case of young consumers, their raw ability to develop sound money skills.

Decades of research show that impulse buying leads to difficult levels of personal debt, and that delaying gratification is among the most fundamental building blocks of smart money management. As this study shows, items you don’t need become less attractive with each day that you avoid them. Live by the rule that you’ll wait 24 hours before any non-essential purchase and you will wind up spending much less money—and not missing many of the things you didn’t buy.

Finally, how can I write about the importance of delayed gratification without mentioning the famous Stanford University marshmallow study in the 1960s? This bellwether study, repeated often and captured here in precious fashion, offered a group of youngsters a marshmallow and a choice: wait 15 minutes before eating the treat and they would be rewarded with a second marshmallow. Some kids caved quickly; others waited and earned the extra marshmallow.

Researchers tracked these kids for years and found that those who were able to wait for the bonus marshmallow had fewer behavior problems, lower stress, stronger friendships, and higher academic aptitude. Think about that the next time you are scrolling an article on your iPad and, right now, simply must have a fabulous new hat described in the text.

TIME Retirement

Even More Proof Americans Think It’s a Great Time to Retire

Jonathan Kitchen—Getty Images

A new survey by the Employee Benefit Research Institute finds that 18 percent of Americans are "very confident" they'll live comfortably when they retire, up 5 percent from last year, thanks to planning like a 401(k) plan or IRA

The evidence keeps pouring in: last year’s torrid stock gains have revitalized the retirement dreams of many Americans. After five years of rock-bottom readings, new data show that confidence in a secure retirement has lifted for workers and retirees alike.

Among workers, 18% now say they are “very confident” they will live comfortably in retirement, up from 13% last year and similar readings each previous year since the recession, according to the 2014 Retirement Confidence Survey from the Employee Benefit Research Institute. Some 37% of workers are “somewhat confident”—also a post-recession high-water mark.

Among retirees, 28% now say they are very confident about maintaining their lifestyle, up from 18% last year; 39% say they are somewhat confident. For both workers and retirees, confidence remains short of peak levels reached before 2007. For example, 79% of retirees were very or somewhat confident about their future just before the crisis—a difference of 12 percentage points.

The reversal is heartening news and ads heft to recent reports showing that retirees, especially, are feeling better than they have in years. Fewer are postponing retirement and more say they believe the stock market will continue to rise and that interest rates will rise as well, providing a higher level of secure income.

But let’s not declare victory over hard times just yet. Two distinct sets of savers seem to be driving the gains in confidence: those with high household income and those who participate in a formal retirement plan like a 401(k) or IRA, EBRI found. This uneven advance may help explain why the percentage of the most forlorn workers and retirees–those saying they are “not at all confident” about retirement security–remains stuck at recession levels.

Nearly 50% of workers without a retirement plan are not at all confident about their financial security, compared with about 10% of those with a plan. Workers in a formal plan are more than twice as likely to be very confident (24%, vs. 9%) about retirement, EBRI found.

The biggest impediments to saving seem to be the high cost of day-to-day living and accumulated debt, the survey found. More than half of workers say daily expenses consume all their income. Meanwhile, only 3% of workers that describe debt as a major problem feel comfortable about retiring while 29% of those who have few debt issues say they are confident in their ability to retire comfortably. That’s hardly a surprise. But it drives home the importance of getting control of your debts before retiring.

TIME Personal Finance

U.S. Millionaires Club Grows To Almost 10 Million

A record 9.63 million households had a net worth of $1 million or more last year, a 58 percent increase from 2008. The number of affluent households worth between $100,000 and $1 million also went up in 2013

There was a record 9.63 million households in the U.S. with a net worth of $1 million or more last year, according to new market research.

The number of millionaire households surged 58 percent from a dip in 2008, when there were 6.7 million households worth $1 million or more (not including primary residences). In 2007, there were 9.2 million households worth that amount, reports market research firm Spectrem Group

At the wealthiest levels, there were 132,000 households with a net worth of $25 million or more, up from 125,000 in 2007, before the recession.

The number of affluent households worth between $100,000 and $1 million was also up in 2013 from a year earlier. There were 28.97 million households in that category last year, a jump of 500,000 from 2012.

TIME Careers & Workplace

The Huge Mistake Millennials Are Making Now

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skynesher—Getty Images/Vetta

Young workers rate international opportunities dead last when it comes to what makes a job attractive. Why travel when you can get all the foreign experience you need via FaceTime?

Millennials are taking telecommuting to a whole new level. They view virtual foreign work experience as having equal career value to a true stint overseas, a new report reveals. As a result, many are passing up foreign assignments that, in a global economy, could help them advance more quickly.

International experience ranks dead last among 15 factors that make a job attractive, according to Millennial Compass, a study of work-life attitudes by MSL Group and researchers Dr. Carina Paine Schofield and Sue Honoré at Ashridge Business School in the U.K. Ranking second to last in importance: working in a multi-cultural environment.

Who knew that twentysomethings were such homebodies? This would seem to come as a shock to an entire industry that has sprung up to facilitate overseas internships and work experience, as well as to global corporations that need boots on the ground in many different cultures. Still, while the younger generation of workers may prefer their iPad to a suitcase, don’t call them insular.

Millennials say they are missing out on nothing. They believe they are gaining international experience through social media, personal networks and technology. Growing up in a world where the Internet has erased geographic boundaries, many young workers are confident in their ability to run business in a new way. As one respondent put it: “The place I get hung up on is the actual, physical overseas part of it. In such an interconnected world, I don’t necessarily think you need to literally travel across the ocean to get overseas experience.”

We’ve known for years that this generation values work-life balance and a meaningful job experience, teamwork, and job mobility above rapid advancement. I respect these priorities and young workers who get the job done on their own terms. I also accept their ability to forge real bonds and relationships over the Internet. But for a group that came of age in a global economy, it seems odd that young folks would dismiss physical multi-cultural experience so readily.

In the U.S., just 18% of Millennials intend to work overseas in the next five years—and that’s mainly to gain personal, not career experience, the study found. The numbers are low in the U.K (29%) and France (28%) as well. Millennials in nations such as India, China and Brazil have a higher regard for international experience. For example, 70% in India and 61% in China say working overseas for a while is important.

So guess what? Those countries are where global companies will step up recruiting. “Millennials in countries such as the U.S., U.K. and France are lowering their chances for exciting career opportunities in global corporations when they show less interest in moving far beyond their native geography, family and friends,” says Brian Burgess, global co-leader of the employee practice at MSL. “Millennials should not confuse global social connections with real global experience.”

The good news is that young Americans willing to tear themselves away from their family and friends for a few years can stand out and reap significant career benefits. In time, the millennial generation will be in charge and the companies they run may be more accepting of workers who see no difference between Skype and a handshake. But for now—not that Millennials care—this stay-in-my-comfort-zone attitude threatens to hold them back.

TIME Financial Planning

The President’s New Mission: Teach the Children (About Money)

President And Mrs. Obama Depart White House For Florida
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The President’s Advisory Council on Financial Capability for Young Americans opens for business Monday and is squarely focused on kids in the effort to empower Americans to take charge of a better financial future

Shakespeare asked: what’s in a name? His point was that names do not define the person or entity. But I would argue otherwise, at least as it relates to a top authority advising the President on how to empower Americans to take charge of their financial lives.

On Monday, the President’s Advisory Council on Financial Capability for Young Americans meets for the first time. The name itself is a mouthful; the acronym PACFCYA looks like it’s been Travoltified. Still, a lot can be read into this name, which promises to set a smart new course for financial education in the U.S.

American presidents have been on the financial education bandwagon formally since George W. Bush authorized a President’s Advisory Council on Financial Literacy in 2008. Bush’s famous vision was of an ownership society. “We want people to own assets,” he said in authorizing the first council. “We want people to be able to manage their assets.”

His lofty goal was to equip everyone with the financial know-how needed to parse complicated terms and fees, and generally get ahead by fending for themselves in the free marketplace. The hope was that a population smarter about its money would reduce odds of a repeat financial crisis. As chairman of the council, Charles Schwab, wrote in the first report: “The charge was simple, yet daunting: improve financial literacy among all Americans.”

The mission took on a new look under President Obama, who in his first term reconstituted the board under the new name: President’s Advisory Council on Financial Capability, swapping “Literacy” for “Capability.” As I wrote at the time, the simple word change spoke volumes about the new council’s approach. This group was more about equalizing access to key financial products like checking and savings accounts. A big part of its mission, as stated in the charter, was to “take into consideration the particular needs of traditionally underserved populations, such as youth, minorities, low- and moderate-income Americans, immigrants, and low-literacy adults.” Meanwhile, regulators would set up vast new protections so that a deeper understanding of money issues wasn’t critical for most people.

Both approaches have their virtues. Certainly, it’s good for consumers to understand and be able to fend for themselves rather than rely on regulators to keep the financial bad guys at bay. But not everyone gets it when it comes to personal finance, and those who don’t would clearly benefit from common sense dictates like simple financial statements and plain vanilla mortgages.

Now we come to the third iteration of this important body, and “for Young Americans” has been tacked on to the name. Teaching kids about money has always been part of the council’s mission. But now it is the sole focus, which puts the emphasis where it ought to be. Solving financial illiteracy is a long-term project that should begin with young people, and by that I mean students in first grade.

“The last council was for people of all ages,” says Beth Kobliner a financial author reappointed to the new council. “Now, the entire council is about young people.” She believes the new name provides absolute clarity of the mission and that there will be little tolerance for indecision. “Action is going to be the buzzword,” she says. “It’s no coincidence that President Obama declared ‘a year of action’ in his State of the Union address.”

Another reappointed member, activist John Hope Bryant, founder and CEO of Operation Hope, echoes Kobliner’s view, writing in his blog that “this new Council will be different. It’s primary focus will be action, moving the needle, and getting things done…this Council will be more innovative, more solution seeking, more impactful.”

Research shows that early and frequent financial education works. Indeed, the council can expect a dose of data on this point at its first meeting. “This group will be able to show the country how to truly make a difference in the financial capability of our children,” says another reappointed member, Ted Beck president and CEO of the National Endowment for Financial Education.

In many ways, the financial education movement in the U.S. has stalled. There has been little progress, for example, in states making personal finance a required line of school study. The mission has been bogged down with handwringing over what works and what doesn’t, and where to best target resources. The PACFCYA seems determined to break the logjam by zeroing in on what works with kids. That may be reading a lot into a name. But then I’m no Shakespeare.

TIME Retirement

Inflation? Hooey, but You Still Need Protection in Retirement

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Just as economists and bond traders missed the reversal from inflation to disinflation three decades ago, a new generation lulled into a new reality will miss it again when consumer prices push higher in a sustained way.

Betting on the return of inflation has been a fool’s game for more than two decades. But that doesn’t mean inflation has been whipped forever, and even a moderate sustained rise in consumer prices can have devastating impact on unprepared retirees.

Consider that at just 2.5% inflation, prices would double (and your buying power would be cut in half) over a 28-year retirement. At 4%, prices would triple over that period and your buying power would fall by two-thirds. This is brutal math for any retiree in good health and living on a fixed income.

Economists like Paul Krugman at the New York Times argue there is little to fear. He believes a wrongheaded inflation obsession, chiefly among policymakers, is holding back the economic recovery. Certainly, inflation has been tame; there hasn’t been an annual reading over 4% since 1991 and most readings have been below 3%. Last year came in at just 1.5%, sparking more worries about falling prices than about rising prices.

But others argue that just as a generation of economists and bondholders accustomed to soaring inflation during the 1970s were caught off guard by 25 years of disinflation, today’s generation similarly will be caught off guard by a reversal—and the return of more rapidly rising prices. As the noted economist David Rosenberg at Gluskin Sheff recently wrote:

“We have an entirely new crew of bond traders on the desks, the sons, daughters, nephews and nieces of the old guard, who have only known disinflation, deflation, lower (minuscule) bond yields and radical Fed easing cycles. That is all they have known for their entire professional lives. Their elders didn’t see the great deflation coming, and the offspring don’t see the remote prospect of a moderately higher inflation environment coming at any time on the forecasting horizon.”

To be clear, almost no one is suggesting anything like the 1970s is in store for as far as the eye can see. But health care costs are rising a little faster, rents are going up, and labor may at last be gaining some leverage on wages in the improving economy—all potential harbingers of higher inflation down the road.

“This should scare the hell out of those of us who are retired and living on (at least partly) fixed incomes,” writes the economist Lewis Mandell for PBS. Just to be safe, you may want to inflation protect your income. Certain assets like gold and real estate serve as an inflation hedge but come with drawbacks. Gold produces no income; real estate can be fickle and difficult to sell. Happily, Social Security benefits rise along with consumer prices. So that portion of your security blanket is fine. But almost no other income-oriented investment, including most traditional pensions, automatically adjusts for inflation.

Protecting retirement income is not cheap. Mandell estimates that an immediate fixed annuity with an inflation adjustment initially generates about a third less income than one without an adjustment. So you don’t want to over do it. Still, if you can afford to sacrifice some income now such an annuity with a portion of your savings may offer peace of mind.

Another way to protect your retirement income from inflation is through Treasury Inflation-Protected Securities, better known as TIPS. These T-bonds adjust for rising consumer prices over the life of the bond, which may go out 30 years. They aren’t perfect, or cheap. But TIPS may afford the best income protection you’ll find.

Let’s say you want to protect $10,000 of annual income for the next 30 years. According to Mandell’s calculations, if inflation averages 2% over that period an investment of $52,257 in TIPS would offset any purchasing power loss due to inflation. If inflation over that period hewed to the 100-year average of 3.43% you’d need $79,553 in TIPS. At 4%, you’d need $88,703.

This exercise helps make clear the impact even modest inflation can have on your ability to pay for things with a fixed income over many years. Serious inflation probably isn’t in the cards anytime soon. But with a long runway still ahead, young retirees are at risk of losing their lifestyle unless they protect at least some of their income from the effects of inflation.

MONEY

A Clean Start: From Real Estate Exec to Laundromat Owner

If Louise Mann had kept her dirty laundry to herself, she might not be where she is today.

One day in late 2007 her washing machine gave out, forcing the mother of two to go in search of a laundromat near her home outside Austin. She discovered a business idea in the process.

“All the places were dirty and dark, and the people inside didn’t look happy,” recalls Mann. “I started thinking, ‘It can’t be that hard to make laundromats more inviting.’”

At the time, Mann was a senior regional sales manager at a worldwide temporary-housing provider, but changes in the commission structure there had left her feeling discontented. So she was especially motivated to spend her off-hours developing a business plan for a better laundromat — one that would be clean, bright, and environmentally responsible.

Her store would have planet-friendly features like energy-efficient machines and solar blinds, along with customer conveniences like free Wi-Fi and TV.

Related: Baby on the Way? Time to Make a Budget

She soon shared her idea with a neighbor, a general contractor whose partner had worked in dry cleaning. The three joined forces — and by the end of 2007, Mann had quit her job to work on launching Wash Day Laundry. “When you have a business idea, you just want to jump in and do it overnight,” she says.

An equipment vendor helped Mann and her partners find a storefront in a promising location: near several apartment complexes and miles away from the nearest competitor.

While the former liquor store was being retrofitted as a laundromat, Mann began promoting the business through social media, newspaper ads, bilingual fliers, and direct-mail coupons.

Launched in March 2009, Wash Day was an immediate hit: It reaped $275,000 its first year, which motivated the group to open two more laundromats in 2011.

Related: Ace Your Annual Review

“When it’s your own business, you don’t stagnate,” says Mann, who now earns $60,000 a year from the stores. “You learn all the time.”

BY THE NUMBERS

$300,000: Amount she invested.

Most of it went to equipment and renovations for the first store. Mann, who was widowed in 2001, kept her family’s living costs low (moving to a smaller home, for example). Since remarrying in 2011, she says, “I now have the safety net of a second income.”

51%: Her share of the first store.

Her partners, both men, each claim 24.5%. (“For government contracts, it could help us to be woman-owned,” she notes.) She owns 49% of the second unit, and a third of the third, in which she invested $10,000 while her partners put in $30,000.

2015: Year she expects to take home six figures.

The company financed 75% of the equipment for the first unit; once that loan is paid off in 2015, about $12,000 a month drops to the bottom line. With the stores expected to bring in a combined $800,000 by then, Mann thinks her income will reach roughly $100,000, not far off from her old salary of $120,000.

TIME Personal Finance

Americans Are Taking on Debt at Scary High Rates

People walk along Broadway on December 2, 2013 in New York City.
People walk along Broadway on December 2, 2013 in New York City. Spencer Platt—Getty Images

Overall debt levels rose at the fastest rates seen since 2007, according to a new study by the Federal Reserve of New York

Americans are known risk-takers when it comes to their personal finances. While consumer spending has traditionally been one of the great engines of the U.S. economy, it also helped get the country into the Great Recession. So after five years of economic turmoil we’ve presumably become a little better at keeping track of our debts, right?

Not really. Data released Tuesday by the Federal Reserve Bank of New York show that at $11.52 trillion, overall consumer debt is higher than it has been since 2011. And more unsettling, debt is rising at rapid levels. Americans’ debt—that includes mortgages, auto loans, student loans and credit card debt—increased by 2.1%, or $241 billion in the last three months of 2013, the greatest margin of increase since the third quarter of 2007, shortly before the U.S. spiraled into recession.

And on an individual level, many Americans are in a precarious financial position. According to a survey released Tuesday by the financial monitor Bankrate.com, 28% of Americans have more credit card debt today than they have in a savings fund. That means that if one quarter of Americans even wanted to use their savings to pay off their debts at this moment, they wouldn’t be able to. Just 51% of Americans have more emergency savings than credit card debt, the lowest percentage since Bankrate begin tracking the issue in 2011. According to the Federal Reserve, overall credit debt increased by $11 billion in the fourth quarter of 2013 to $683 billion, the highest levels since 2011.

That data is part of a disheartening series of figures that show Americans haven’t become much better at keeping track of their personal finances since the recession began in 2008, when homeowners’ risky mortgages and freewheeling interbank lending brought the financial system to its knees. “This is not moving in the right direction,” says Greg McBride, chief financial analyst at Bankrate.com. “American consumers are not showing improvement in these areas. ”

And despite consumers’ iffy savings records, banks are loosening up their credit card limits to levels not seen since the depth of the recession. Banks are increasingly comfortable with high credit lines. Total aggregate credit card limits have increased to $2.91 trillion, the highest levels since the third quarter of 2009, putting banks at increased risk if borrowers default on their debts.

All that does not mean we are on the road to a second recession. In fact, the increase in household debt could also have a lot to do with increased consumer confidence in the economy, which grew at 3.2 percent in the last quarter of 2013. And debt helps drive economic growth as consumers spend more money on the assurance they’ll make it back later. Overall debt levels are still lower than they were when the recession hit, even if they are increasing rapidly; consumer debt remains 9.1% below its 2008 peak of $12.68 trillion, according to the Federal Reserve.

Carl Richards, a financial planner and director of investor education at BAM Advisor Services thinks that one explanation for Americans’ willingness to take on more debt could be the relative improvement of the economy over the past year, when the workforce added 2.2 million jobs over the course of the year. For consumers with extra money in their wallets, taking on more debt in anticipation of a bonus or a raise may not seem so risky. But that could be a big mistake. “We’ve already forgotten 2008 and 2009, and now we’re projecting into the indefinite future and we’re spending based on as if it had already happened,” says Richards. “Our default setting is optimistic, and maybe overly optimistic.”

If consumers aren’t on steady financial ground, it could put Americans at greater risk if the economy doesn’t improve at a fast enough rate. And it doesn’t help that Americans are not very good savers. “People aren’t making substantive progress on emergency savings,” says McBride, referring to Americans’ weak personal savings-to-debt ratio. “Americans have made some progress on debt repayment… but (savings) continues to be the Achilles heel of financial security. And it was never a strong point to begin with.”

The good news may be that many Americans are at least aware of their financially precarious situation. A monthly survey by Bankrate shows that Americans are less comfortable with their levels of savings than they have been in a year. Overall sense of financial security among Americans has fallen as well. Unfortunately, that partly reflects stagnant wages and increasing economic inequality. But it also reflects an awareness among Americans that they should be doing better. Americans “realize they need a lot more than they have, and they realize the progress is slow-going,” McBride says.

TIME Personal Finance

Capital One Wants To Visit You At Home

Bank's new credit card contract reserves the right to pay a "personal visit" to cardholders

“Hello, it’s Capital One, can I come in? I brought lemonade!”

That’s something credit card customers of the Capital One bank are worrying they might hear on their front doorsteps. The credit card issuer said in a recent contract update to cardholders that it can contact customers “in any manner we choose.”

That includes calls, emails, texts, faxes or a “personal visit,” reports the Los Angeles Times. The company has also reserved the right to suppress its caller ID and identify itself however it wants, a tactic known as spoof calling.

Capital One said that, despite the legal language, it doesn’t typically pay home visits to its customers. “Capital One does not visit our cardholders, nor do we send debt collectors to their homes or work,” the company spokeswoman said.

The bank told the L.A. Times it might occasionally “as a last resort” visit a customer’s home to repossess costly goods involved in credit promotions. But the spokesperson added that Capital One is “reviewing this language” in its contracts.

[LAT]

TIME Financial Education

The Economy is Big News–So Why not Teach it?

School
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With the economy on the front page most days the past six years, you might think economics and personal finance would be a prominent subject in our schools. Yet less than half of states require an economics course in high school and little more than a third require one in personal finance, according to a new survey.

The long trend is mildly positive. For the first time, all 50 states and the District of Columbia include economics in their K-12 education standards, meaning they have guidelines for those schools that want to offer such a course. Meanwhile, more states are offering and requiring personal finance courses.

These are the chief findings in the Council for Economic Education’s 2014 Survey of the States report, out today. The CEE, which surveys each state every two years, is a strong advocate for financial education and believes that requiring school courses in economics and personal finance is an important path to progress.

“A more financially capable population can result in a larger and more efficient market for financial products, greater participation in asset building and greater financial stability,” Richard Ketchum, Chairman of the FINRA Investor Education Foundation, states in the report. “It is therefore in everyone’s interest that action be taken to improve the financial capability of all Americans.”

Ketchum notes that young people are entering adulthood saddled with debt: 36% of Millennials have student loans outstanding and 55% say they might not be able to repay this debt. Only a third have emergency savings while about the same share have unpaid medical bills. Nearly half carry a balance on their credit cards.

Financial education in schools is seen as one way to bring such numbers down over time. But first we have to bring up the numbers of states and schools that offer or require such coursework. The sobering numbers related to economic education are especially troubling because virtually every family in America was touched by economic troubles during and since the Great Recession.

While every state is on board with economic standards, just 24 require that an economic course be offered. That’s down one since the last survey. The number of states requiring that an economics course be taken in high school remains constant at 22. These numbers argue that the states are taking a pass on the mother of all teachable moments.

The news is a little better on the personal finance front. Now 18 states require that high schools offer a course, up from 14; and 16 states require personal finance instruction, up from 13 in the last survey. It’s not clear why there’s been more progress in personal finance. In part, the states that have embraced economic education are now picking up on the need for personal finance too. Another explanation is that while the hardships of the past half-decade may be better understood through an economics course, it’s better understanding of personal finance that will allow families to manage their way through tough times.

Despite the progress, these courses remain a tough sell at the state level—and that is where the battle lines are drawn. Unlike in the U.K. and other regions with a federal mandate for financial education, state authorities call the shots in America. They must be convinced one at a time, and they have been slow to respond.

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