I remember the day my father bought his first car in America. This was a day of freedom, a step towards achieving the American dream. No longer would we be confined to the city life of Buenos Aires where traffic congestion made public transportation more convenient than driving. In the suburbs of Miami, where sidewalks and public transportation are virtually a fantasy, driving is everything.
As my 5 year-old-self followed my father across the dealership, the salesman presented the newest models on the lot. Disinterested, my father asked to see cars with more reasonable prices. This was clearly a bargain strategy, I thought. My father was going for the nicest car but with a lower price.
We drove off in a used, dark green, Chrysler minivan that seemed like it belonged in an antique car exhibit. For years, I was subjected to this ancient van while his friend drove a fancy BMW.
Imagine the anger when I found out that his kids watched SpongeBob on a flat screen TV while my father brought in a heavy, old set. I wondered why my father never bought nice things like that. My thought was that he was too cheap.
A few years later, my father's friend declared bankruptcy. After years of lavish spending, he and his family were forced to compromise their hopes and dreams in order to keep what little they had left. They sold their cars to pay for their groceries.
But no one ever taught them not to buy things with money they didn't have. No one was there to tell them that they should have bought an old Chrysler instead of a flashy BMW. That maybe three trips to Europe in a year was too much. Or that saving was important because you never know when the unexpected can happen.
The tales my father used to tell me of people who didn't learn how to save had suddenly become real. Seeing someone I knew suffer so much made me realize the importance of financial education.
To this day, his bankruptcy still haunts him. Had he been financially educated, he would have known to save and spend wisely. Good financial education starts with prevention. To learn more about financial education, visit www.dosomething.org/issues/financial-education.