Lately the thought of how people use their money has been bothering me.  I’ve been taking time to just watch the people around me and how they use their money.  Listening to people at work, friends, family, and just about anybody that I’m around.

From this little experiment I learned a lot about people and their money.  In this post I am going to pose the question, is the way people handle their money and personal finances gotten out of control or do you believe things a pretty much unchanged?

Have The Standards Changed

With all the news on the current recession to the Wall Street scandals, to the government bailouts have the standards changed? 

So I did a little digging and found some current facts to start with. First, foreclosures are up over 55% in the last year effecting Michigan and Ohio the most.   I recently heard on my local news that there is a foreclosure every 30 seconds in the United States. 

Bankruptcy is up nearly four times higher than 2005.  There are over 2,000 bankruptcy filings per day again with Ohio and Indiana leading the pack. 

Unemployment reaching near 10% in some state such as Michigan, Rhode Island, and California.  Though it’s about to get worse with GM just recently shutting down it plant in Dayton, OH.

When you add all of that onto the massive amounts of credit card debts people have built up is it no wonder we are in this situation.  But Bankruptcy, foreclosure, and unemployment are not the only things to blame for us being in this situation. 

When you really look at the big picture and what I have learned form my little experiment is that people are buying more and saving less.  That’s right saving less.  In 1980′s the average American saved 10% of their income.  In the 1990′s it dropped to 5%  and now in the late 2000′s it’s actually gone negative.  Meaning most people are not saving anything.

To say the least we have become a see and buy economy.  Seeing what we like and buying without worrying about the consequences.  This type of lifestyle is what has lead us to are current recession with the mortgage disasters.

The normal standards that the lenders have been enforcing for so many years have gotten sloppy by giving out things such as option arm loans and even handing out loans with 125% financing. 

You heard me.  125%

Not to mention everyone in on the scandal such as the appraisers and title companies.  In fact a few month ago several appraisers in and around my area were arrested for putting out false appraisals and actually stating that properties were actually worth more than there were.

Who Is Teaching Us About Are Money?

In the end we have to look ourselves in the mirror and confront are mistakes because we are to blame for the financial challenges that we face.  Not the government, not are employers, not the lenders or the banks. 

The real question is where do we get are education about money from, school, family, friends, coworkers?  While I’m guessing it’s probably all of the above the truth is the average American does not have much of a financial education. 

To relate from my own experiences from being in financial services only 20% of the families I helped knew a lot about how money works.  Some knew a little while others knew nothing at all.  In fact I’ve been recently been running a pole on the front page of my blog to see how many people actually have a financial planner and as of this post is about 50%. 

How To Change The Situation?

While I can’t speak for every family out there I can speak for my own.  If your want to reverse the outcome that economy has given us start with yours first.  Get your families finances in order first.  Then spread the news by helping others.  Think if you could help one other family with their finances just as you have with yours.  The effects would be staggering.

This is the very essence of Stumble Forward.  To help those get on the right track by helping families make better financial decisions.  If that sounds like you subscribe to my RSS and get your family on the right track.

This post was recently featured in the carnival of money hack #47 hosted by Money Beagle.