Simple financial steps are the things that matter.
I can show someone how to calculate internal rates of return. I would be much happier if I could get that same person to rip up their credit cards. Internal rates of return calculations require knowledge.
Getting rid of credit cards means altering how you live. Lifestyle changes are a lot harder. You can have all the knowledge in the world, but if you are paying 24 percent interest on credit cards, you are never going to get ahead.
Until I got out of college, my formal education in personal finance was zilch. I learned from my parents and the school of hard knocks.
Thirty years ago, no one gave college students credit cards. You lived on what you had in the bank.
I was lured by other college temptations, like girls, beer and fast food. If credit cards had been available, you could have added them to the list. My lifestyle was dictated by lack of funds. Since all of my friends had the same limitations, I never felt social pressure to keep up. I worked during summer vacation and spring breaks. My car cost $700. College was fun, even if I didn't wear designer clothes.
Now, it seems like an expensive spring break vacation is mandatory for college students and high school students, too. Skipping spring break automatically brands you as a loser.
To paraphrase Tom Petty, (a singer from my college era), it could be that the "losers" are the ones getting lucky. They aren't coming out of college with a ton of credit card debt. Some people are paying for that week in Panama City 15 years later.
I live in a college town and interact with lots of college students. Most are loaded with credit card debt and have monster student loans to boot. They are going to be enslaved by debt for years.
There are two solutions. One is to not issue credit cards to students who don't have income. The second is to teach people about money so they know how to avoid easy credit in the first place. Neither are simple solutions.
Legislating against credit card companies seems futile. The credit card companies have their arms around Congress. That was evidenced by the "Bankruptcy Reform Act" of 2005 that was really a welfare bill for credit card companies.
Even though there has been insurmountable evidence that the "bankruptcy reform" hurts consumers, there has been no call to repeal it. The credit card companies have better lobbyists than consumers could ever dream of.
Educating college students is the second battle. Sending students into the world to make stupid financial decisions seems like a waste of a college education, but I don't see any movement toward making personal finance a requirement.
Colleges ought to think about requiring personal finance, if only to protect their long-term interests. Alumni overwhelmed by debt are never going to drop big dollars in the endowment fund.
Colleges need to train people to think about money the way Warren Buffett thinks about money. They might be in line when someone gives a vast fortune to charity like Buffett did.
Graduates will be coming out to face the worst economy in recent memory. While in school, I hope they can say no to credit cards and easy credit. It will be the best graduation present they ever give themselves.
Don McNay will be signing his new book, "Son of a Son of a Gambler," at the Perkins Building on Eastern Kentucky University's campus, on Wednesday, Jan. 23, at 7 p.m. All proceeds will go the Society of Professional Journalists. You can write to email@example.com or read other things he has written at www.donmcnay.com