Financial problems bigger than personal problems

In April, the Georgia legislature ordered financial skills to be taught to high school students beginning in the 2024-25 school year. Students in grades 11 and 12 must take at least a half credit course in financial literacy to graduate. In December 2021, the state school board changed the title of the economics course currently required for the degree to “Personal Finance and Economics”, which is to be implemented in the coming school year. The course covers 10 standards classified as “Personal Finance”.

I’m not against students learning about personal finance, but I’m against blaming 42-year-old adults like Swope for problems they didn’t create by telling them they need better money management skills .

I know what it’s like to budget carefully, live modestly, and still feel like you’re going nowhere financially. After selling my condo—the first house I ever owned—I bought my current home in 2017. If I hadn’t done it then, I might not be a homeowner today. The fact that I can even claim home ownership puts me financially ahead of so many people who don’t have that opportunity.

I have friends in their mid-40s who make six figures who are praying for President Biden to keep his promise of federal student loan debt relief. They don’t want to live the high life. They just don’t want to feel like they’re barely making ends meet each month. I know other locals, even in six-figure households, who have been financially ruined by a health crisis despite having employer-provided health insurance.

These are not problems caused by a single economic event or a person’s lack of financial knowledge. They are the result of broken systems in dire need of repair.

The very concept of upward mobility rested on the shoulders of a middle class that for years had been trying to hold on to a rapidly descending rung of the social ladder. Unfortunately, this struggle has also become the basis for the divide, as each struggles to maintain a socioeconomic position that they believe is either slipping away or just out of reach.

The SME slide does not only affect SMEs. A 2013 study of social mobility by the Center for American Progress found that the size of a region’s middle class was highly correlated with the probability of the rise of a child born poor in this region.

From 1971 to 2021, the number of adults living in middle-class households fell from 61% to 50%. In the Atlanta metro area, 53% of households are middle class, while 23% are upper class and 29% are lower class.

Among this middle-class majority, there are many families like the Swopes who feel they are not doing well financially.

In May, home prices in the greater Atlanta area rose 11.2% year-on-year. Houses sell for an average price of $456,000, according to real estate agent Redfin.

Rents are also on the rise, up 15.33% in May yoy. The average rent for a one bedroom apartment is $1,862 based on data from ApartmentList.com.

The rapidly increasing cost of housing would be reason enough to be concerned, but we are also seeing our purchasing power steadily declining.

The consumer price index for the greater Atlanta area rose 1.9% from February to April, up 10.8% year-on-year.

At the same time, workers’ wages have not kept pace with inflation. According to data from the Bureau of Labor Statistics, from March 2021 to March 2022, Metro Atlanta experienced the smallest increase in salaries and wages (3.4%) compared to other metro areas (the national average is 5%).

With nearly all living expenses exceeding salary and wages, it’s no surprise that Swope told Time Magazine he’s considering taking a part-time job.

So while we really should make sure we educate young people about it personal finances, we should also stop blaming victims.

The financial issues faced by middle- and low-income residents go well beyond the personal. To better enable upward mobility, lawmakers must enact policies that address the larger economic issues we face as a nation.

Read more on the Real Life blog (www.ajc.com/meinung/real-life-blog/) and find Nedra on Facebook (www.facebook.com/AJCRealLifeColumn) and Twitter (@nrhoneajc) or email her at nedra.rhone@ajc.com.

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