Many people have a difficult time dealing with financial matters. In most cases this can be traced back to a lack of education in basic finances for the home. Just understanding how to balance a checkbook or how compound interest works frustrates many people. If they had a class in high school about basic finance and economics they would probably be in a better situation to control their own household income.
One area that many struggle with, and I see this see over and over, is understanding how credit cards work and how interest payments will lower the amount of spending power your household income has. Some people just go for every credit card that is offered to them or think that moving credit card balances around is somehow making them better off. They need to read the fine print on those 0% apr balance transfer offers.
Last week a woman came into our office looking to get a land loan and I had to explain to her that this was much more difficult than a traditional mortgage loan especially in the current economy and situation with real estate. She didn’t follow what I was saying after the first sentence and it was probably just a lock of understanding in basic finances.
