In our talk story Friday, Tom Ehrenfeld mentioned how something really bothers him:
“”the creation of a new class of people who are in permanent debt. Between the relaxation of standards for credit card companies (which now charge usurious rates and an ever-escalating array of fees and penalties), the changes in bankruptcy laws, and the conversion of the debt counseling field from one of small local charitable agencies to virtual storefronts for for-profit hucksters, it’s bad. There are already alarming discrepancies in this country in the allocation of wealth, and the credit epidemic is eviscerating what’s left of the middle class. Obviously I believe in free markets and in enterprise, but not to the extent to which we’re producing debt peons.”
Well Tom is certainly not alone in his concern. This morning, I saw this headline in our Honolulu Advertiser, pulled from the Associated Press:
Experts see crisis in growing U.S. Debt
By journalist Robert Tanner
You owe $145,000. And the bill is rising every day.
That’s how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor.
And it’s not even taking into account credit card bills, mortgages — all the debt we’ve racked up personally. Savings? The average American puts away barely $1 of every $100 earned.
Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society we spend $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services.
One of the ways Tom has influenced my thinking a great deal in recent weeks is with the topic of financial literacy. More and more frequently my thoughts turn to the responsibility I must accept in my own coaching and in speaking on various Managing with Aloha topics as they relate to income generation, financial freedom, and reducing money-induced stress.
On a personal front I’ve taught myself to keep only two credit cards (one for my business, one for anything else) and they are usually in a drawer and not my wallet; I only use them if I know I can pay them off when the bill comes. I will not incur any long-term debt other than my mortgages, including paying for my kids’ college educations. I’ve learned to be generous with those sort of “free tips” on what I do being freely suggested to my clients. Those simple strategies which enter over coffee, or as “by the way” asides/ conversation openers in productivity or business budgetary discussions, will continue as, “Now, how would you apply this same sort of thinking to next year’s budget? … How will you communicate this to your team in those strategy sessions you have scheduled for next week?” These times will often throw wide open the door to our coach-client relationship being turned up a notch in both content and candor.
I coach managers to be financial coaches for their staff, both as business partners, and as caring, concerned mentors:
“Today, I often recommend managers suggest The Automatic Millionaire by David Bach (Broadway Books, 2004) to their employees who need help with managing their finances and breaking out of the stress that money can create.”
—Managing with Aloha, page 138
Yet those things are easy; I need to do more.
I had begun to do so several months ago when I wrote the Managing with Aloha manifesto for ChangeThis.com, and shared my thoughts therein on realistic business models. However I barely scratched the surface of the discussion (I’m referring to the section which starts on the bottom of page 4 of my manifesto.) Reading this AP article today, and having the benefit of hearing Tom’s passion, I know I must do more.
What are you doing? What more will you be doing? Let’s talk story and share our ideas.
More from Robert Tanner’s article:
David Walker, who audits the federal government’s books as the U.S. comptroller general, put it starkly in an AP interview:
“I believe the country faces a critical crossroad, and that the decisions that are made — or not made — within the next 10 years or so will have a profound effect on the future of our country, our children and our grandchildren. The problem gets bigger every day, and the tidal wave gets closer every day.”
With this post, I am starting a new Talking Story category called Financial Literacy. However take a look at all the others I so easily added it to as well; gives you pause to think of all the connections, doesn’t it.