Financial illiteracy

Do you have a rational way of managing your finances during our troubled economic environments?

I found an article by James Surowickie which is ideal for posting here some interesting parts based on his views for the dangers of modern financial illiteracy.

Your credit - card debt: "It’s like we’ve opened a faucet, and told people they can draw as much water as they want, and it’s up to them to decide when they’ve had enough. But we haven’t given people the tools to decide how much is too much."

Your mortgage: "A study by economists at the Atlanta Fed found that thirty per cent of people in the lowest quartile of financial literacy thought they had a fixed-rate mortgage when in fact they had adjustable-rate mortgages."

Why things get sh*tty for you: "The Dunning-Kruger effect: people who don’t know much tend not to recognize their ignorance, and so fail to seek better information."

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