Learning to stretch a buck

At long last, itís budget time in Chenango County. Hold your excitement.

In the face of financial instability in many parts of the state, municipalities are crunching the numbers to make it through yet another fiscal year, much to the overwhelming enthusiasm of residential taxpayers hardly able to contain their ecstasy. However, budget trends in local government across the county and statewide indicate an imminent threat to the very being of local government; that is, municipalities are threatened by increasing pension and healthcare costs of municipal employees.

State mandates and rising costs have led many New York municipalities to suck their reserves dry, forcing many to refer to banks and other private institutions to borrow money to pay off these requisite dues. In short, many are spending more than they make. I commend the Chenango County board of supervisors for not falling to this resort, at least not yet.

The need for municipalities to borrow money is under scrutiny from taxpayers, which almost seems unwarranted given the spending habits of the average consumer. For me, it brings to mind issue of personal finance, which I think is a much larger issue at hand.

Fair to say deficit spending is a concern for taxpayers, but itís time to put more emphasis on personal finance too, now that U.S. households combined are more than $11 trillion in debt. Upcoming generations donít know how to balance a checkbook, let alone pay off debts. Say what you want about government spending, at least most elected officials know when their in the red, unlike the average American consumer.

Recent findings from the Federal Reserve Bank of New York show that the average American U.S. Household debt tops $672 billion in credit card dues. We owe $750 billion in auto loans, $914 billion in student loans, and in mortgages and home equity loans we owe an astounding $837 trillion (thatís right, trillion).

Americans have a spending problem. So many people are oblivious to the money they owe. I would even go so far as to say some people believe if they ignore their debt, it will disappear.

Is it any surprise that Americans are so in debt? Weíve raised a nation of consumers to believe if they want something, they can have it. After all, that is the American dream, right? Sure it is ... so long as those wants are acquired through hard work, but thatís become one of those fine-print stipulations that we overlook. Weíve put so much emphasis on the acquisition of stuff that weíve forgotten to teach young people about financial responsibility, work ethic and consumer education in general. Now, being in debt is just as American as apple pie and baseball.

Of course, I canít say that the average household debt is altogether unavoidable. I still owe money for my car (way more than what itís worth I might add) and I owe more in student loans that I care to admit. I do, however, feel that we could do a better job of showing financial responsibility to a forthcoming generation currently being raised to believe credit cards arenít money, loans will always be available, and there are ways to abuse state and federal assistance.

There are a lot of people that say consumer education should begin in the younger grades, somewhere between long division and algebra in elementary school, and then continue from there. This might help prevent a generation of people who donít know what compound interest is, how to balance a budget, how much money should be put toward necessities like food, gas, and utilities, and how much should be used to pay off debts.

It seems like a relatively easy answer to a potentially devastating problem. Spend less than you make. Yet itís not being done. And we wonder why so many people are turning up broke. Incredible.

Follow me on Twitter ... @evesunshawn.

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