Americans are absolutely horrible at financial literacy. They take out college loans to learn skills that are practically worthless. They avoid using flexible spending account civilly because they don’t understand them. Even things as simple as a gym membership are often huge wastes of money simply because people don’t sit down and do the math.Here’s another example. This proves that the average American is horrible at math. Look at how many people are excited about the concept of a debt snowball. A debt snowball is where you pay off your smallest loans first and then keep applying the payments toward progressively larger loans. I’ve seen people nearly crying with joy at the idea of following this simple idea. But it’s bad math. You should pay off your loans with the highest interest rate first. If you simply pay off the smallest loans you’re going to pay far more in interest than you would if you pay down the higher interest wants first. All the excitement that has gone into this stupid way of managing your finances and getting out of debt just goes to show how dumb the average American is when it comes to financial matters.I think it’s admirable that so may people are trying to get out of debt. But if they’re doing it by following bad math advice it’s likely they’ll end up back in the same place within a very short time period. If you really want to get out of debt you need to understand the math behind financial decisions. If you continue to make decisions that are based on bad mathematics and unwise financial choices the chances of you staying out of debt long-term are very slim.
