Why is there a need for Smarter Texas?
“Informed financial decision making is also vital for the healthy functioning of financial markets. Like any other businesses, financial service firms will provide better products at better prices when they are subject to market pressures imposed on them by informed consumers.”
—Ben S. Bernanke, Former Federal Reserve Bank Chairman (Before the Committee on Banking, Housing, and Urban Affairs of the United States Senate May 23, 2006) Link
“Research suggests that financial education can help consumers make better choices.” —Ben S. Bernanke, Former Federal Reserve Bank Chairman Link
“ No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you and your family.” —Alan Greenspan Link
“There is a need for students to learn about financial literacy concepts and to develop skills through their educational years if they are going to change their consumption behavior to reflect healthier practices.” —Laura Ewing, President and CEO of TCEE
Why is there a Need for Students to Acquire a College Degree without Massive Debt?
“Student Loan Debt Exceeds Credit Card Debt in U.S.” —September 10, 2010 USA Today article
“The total student loan debt is approximately $850 billion.” —September 10, 2010 USA Today article
Finance is the biggest barrier for college access. Families over estimate cost and rule out education due to lack of funds. Research has shown that families who save money for student’s college are 4 times more likely to go to college and students who have the savings in their name are 7 times more likely to go to college. —Elliott and Beverly in the paper The Role of Savings and Wealth in Reducing Wilt Between Expectations And College Attendance (2010).
Why has Credit Card Debt Hinder Economic Recovery?
(The following statistics published May 21, 2011 by economywatch.com)
1. The total amount of consumer debt in the US is nearly $2.4 trillion in 2010. That’s $7,800 debt per person.
2. Thirty-three percent of that debt is revolving debt (such as credit card debt), the other 67 percent comes from loans (such as car loans, student loans, mortgages and the like).
3. $51 billion worth of fast food was charged to credit cards in 2006, compared to $33.2 billion the previous year.
4. The average credit card debt per cardholder is $5,100, and expected to increase to $6,500 by the end of the year.
5. 1 in 10 consumers has more than 10 credit cards.
6 . The average consumer carries 4 credit cards. While the average household carries $6,500 of debt.
7. 1 in 50 households carry more than $20,000 in credit card debt. That amounts to more than 2 million households.
8. 4.5 percent of cardholders are 60 or more days late in their payments.
9. Roughly 2 – 2.5 million Americans seek the help of a credit counselor each year to avoid bankruptcy.
10. On average, clients seeking financial counseling were $43,000 in debt. Of which $20,000 was consumer debt and $8,500 was revolving debt (such as credit card debt).
11. By the end of 2010, there were 115,000 bankruptcy filings in California alone. Across the US, 1 in every 160 people filed for bankruptcy.
12. 40 percent of households simply spend more than they earn. —Federal Reserve Bank
Resource: http://www.economywatch.com/economy-business-and-finance-news/a-dozen-alarming-consumer-debt-statistics.21-05.html - May 2011.