Creating a Sound Financial Future

There has been a lot of discussion in the media lately about proposals to require a minimum down-payment on all home purchases of 20%.  Personally, I think this will keep young adults from becoming homeowners for far longer than necessary. As a young about-to-be-married couple, my husband and I purchased our first home with a 5% down payment. I had to leave settlement to go pick up my paycheck because we were a little short of cash (in the days before auto-deposit). We were a great credit risk; we had secure, well-paying jobs and bright futures.  We went on to sell that house and with each subsequent house we purchased, we put more money down.  Our last home was purchased with well over 20% down.

In a recent Washington Post article , Michelle Singletary wrote of the unintended cosequences of changing this law in her article,  Proposed 20% down payment rule could put owning a home out of reach for many. A 20% down requirement in 1987 would have put home ownership out of reach for my husband and me. Thankfully, we were able to stretch a bit and begin creating a financial foundation for our family.

Today, I read another article with concrete ways that young adults can begin creating a life of financial independence and strength. It has some really good advice on specific things that 'real' adults  (as opposed to training-wheel adults, as college students often are) can do to establish good habits and begin saving money: The ‘Real-World’ Money Rules for Recent College Grads: 11 Ways to Save More and Spend Less When You’re Starting Out.

Fairfax County Public Schools are implementing a requirement, beginning with 2012 high school freshman, that students must have one credit of Economics and Personal Finance. I know  parents  who feel like this will take away from more rigorous academic courses, as it is not optional. As someone who speaks with adults daily about their financial picture and goals, I think that teaching our children these skills will make them better consumers and encourage greater personal financial responsibility.  For years I have watched as people took out loans that they did not bother to try to understand because they were uncomfortable with the topic of money and the costs of borrowing. If we can make this more comfortable for our young adults, we will have a generation of consumers and home buyers who understand the costs of the money they are borrowing--and who will be in a better position to borrow this money.

This knowledge is important for all students--both those who plan to attend college and those who don't. Understanding how to responsibly handle money is something we all must understand. This is something we as a society have neglected to consider a priority and I am glad to see it getting more attention.