No More Mortgage: Budgeting skills should be taught early on rather than after many have already paid the price.

No More Mortgage on Budgeting

It would make sense that we spend a great deal of time learning how to budget when we're learning math as we grow up. But that's not how they did it when I was in school. And it doesn't seem to have been the case for many others either. And many have paid the price.

We're called consumers for a reason. We spend, build up debt, and don't save enough for retirement. If we learned better budgeting skills earlier in life and were more prepared, much of what goes wrong financially for people could be avoided or at least mitigated.

The financial goal should be planning for a retirement with no more mortgage or other debt payments and spending time doing the things you want to. Yet people don't take the repercussions of their financial choices seriously enough or soon enough.

We're once again seeing record numbers of personal bankruptcy applications. Who has been filing?

Let's look at some figures for 2008 from Who's Filing For Bankruptcy

• The largest age group filing was 35-44, with the levels tapering down as the age groups went up.
• Highest education level was "Some college" with levels falling as education level increased.
• Income level showed filings decreased as income levels increased.
• Employment status for highest % of filings was "Unemployed"

What could we be seeing based on these stats?

As they hit the 35-44 year old age group, people are often making a stable income and are a huge purchasing group. They're buying homes, cars, tv's, and using their credit cards without enough regard for the debt they are building up. After all, you figure you have plenty of time to pay it all off. As they get older and have gained some experience in handling or mis-handling their finances they are less likely to file for bankruptcy. They've learned to do a better job with their finances and are starting to look ahead at their future more as it's a lot closer than it was previously.

As levels of education rise the number of filings decreases. That makes sense. Most of those are exposed to higher education on finances and business.

As income levels rise the percentage of filings goes down. Part of that could be that they are making more and are able to stay above water longer and eventually gain enough control of their finances to get by. It's interesting how as people earn more money they often start spending more money and don't start saving more money. They buy a lot of the same things as those who earn less but pay more for the bigger house and more mortgage, the nicer car, the bigger tv, etc.

The largest % of filers were unemployed. If they had enough debt to need bankruptcy then they must have been working and earning a living before. But they obviously didn't save enough for an emergency and eventually found themselves unemployed.

Read more in Part 2 on Budgeting Basics should be taught earlier.

Your Friends at No More Mortgage.

Related articles online.

• Tip of the Day: Living on a Budget (abcnews.go.com)