Solving the Foreclosure Crisis

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Recommended: The impact of financial literacy education on subsequent financial behavior

I’ve thought long and hard about this question – actually, the financial crisis in our country, not just the foreclosure crisis – and while I’d like to think I have some incredible revelation about how to solve the problem, I keep coming back to the basics: people just need to be taught good money management, early on, so it becomes part of who they are. I have dear friends who have moved from one foreclosure to another – several over the past couple years – and quite frankly, they shouldn’t keep getting loans with that history! They need someone to step in and say, “You can’t afford this, try a cheaper alternative.”

My family has recently become involved with a local homeless shelter that focuses on homeless families with children. This shelter, which has been operational in my home town since 1992, has helped more than 750 families and over 2,000 children break the cycle of poverty and homelessness – and fully 95% of the families who go through the doors of this shelter NEVER return to homelessness. What’s their answer? Financial education – classes taught twice a week that are required of all residents. Sounds simple, I know, but I’m discovering that simple is usually best. Just like my teacher used to say, “Work smarter, not harder.” Our country reports that 70% of Americans today are one to two paychecks away from homelessness – that’s a frightening statistic. And the vast majority of those people have never been taught good money management techniques. They simply don’t know any better. This is something we need to change and change NOW.

I firmly believe that when people are equipped with the correct financial information, they can better take control of their lives and their futures – it’s why the program offered at F...

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...cisions made following high school will impact their long-term wealth building skills, and ultimately the nation’s economy. And for those folks trying to get a loan who perhaps don’t have these skills, it will likewise help them be able to maintain their homes and lifestyles through tough economic times. A simple, but neat solution.

I realize this won’t be a “quick” solution. It doesn’t represent a “magic bullet” that erases the foreclosure crisis, but if installed into our nation’s culture, its long term ramifications will be mighty to save future generations from similar fate. Then the United States could once again rise as the world’s economic powerhouse.

Works Cited
Silva, T. L.(2008) Texas Foreclosures Number 9 in US. Retrieved on December 22,

2009 from http://earlybirdaustin.com/2008/11/17/texas%E2%80%99-foreclosure-numbers-a-mixed-bag-report-shows/

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