Financial illiteracy creates an uniformed electorate

Almost two years ago the St. Louis-Post Dispatch wrote an article called Financial illiteracy threatens Americans' security . "In a survey, just 56 percent of Americans could correctly answer two basic questions about compound interest and inflation" the article reported. I always find these surveys shocking. My mother retired as a vice president at Fifth Third Bank. We were schooled at a very young age about the importance of planning and saving. After working on the recent school referendum, I completely understand how dangerous financial illiteracy is to our communities.

NPD117 had $11 million saved to use towards district projects. It was amazing to me how many people were mad about that money -- and why.

On the one hand there were a lot of people who thought the district should have planned better. This group thought that the district should have a long-term (usually defined as ten year) plan with estimates and time lines. People wanted the district to start saving today to pay for future projects, even if the project was ten years away. This group was angry that the district didn't save more money and needed to ask taxpayers for any part of the construction costs.

The other group of people thought the district should live paycheck to paycheck. They were mad the district had any money saved. When I asked how the district should pay for big ticket items like new roofs or new buses or new parking lots, this group thought the district should pay for it real time. One very angry woman said, "I don't save for things. I pay for them when they happen. If the district has $1 in the account at the end of the year then I want my money back."

I completely understand and side with the group that wants the district to plan for projects and save more money. It's the way we function in our family. I don't understand the group that wants the district to live paycheck to paycheck at all. It's not in my DNA to wait until there's a need to figure out how to fund a project. It's shocking to me that so many people really believe the way to live is to go from paycheck to paycheck without saving anything.

It does explain why we're in such a financial crisis. When people don't understand the basics of earning and spending money they can't possibly understand why it's important to save money. The 2012 Consumer Financial Literacy Survey found that despite the recession, Americans still lack basic money skills. More than half of the 1,007 adults polled for the survey admit to not even having a household budget.

Shocking isn't it? When more than half the households don't even have a budget, how can they participate in financial decisions within a larger community? It's a dangerous trend that threatens more than our local community. It has actually been called a threat to our national security. It's time for people to understand that saving money is more than clipping coupons. It's an important part of our financial security, which is important to our long-term security.