The education bureaucracy has really done us a disservice by failing to teach students two important things: economics and how to handle money. Most parents can't teach their children how to handle money because they were not taught themselves. This is a vicious cycle, and it needs to stop. Someone, either the schools or the parents, need to teach children how to stay out of debt and how to handle their money. They also need to teach children about economics.



Without a good understanding of economics people will believe whatever the government or the media tell them about why taxes need to be raised, or why we need to impose unfair tariffs, and so on. No matter what you think about Reagan as a president, he was right about his economic policy: let people hold onto more of their money and the taxes collected will actually increase.

If you were born in the 1960s or before you probably remember the terrible economic conditions in the United States in the late 1970s and into the early 1980s when there was a period of incredibly high inflation, a weak economy, and low morale. Remember the term "malaise?" The whole country was described as being in a malaise.

Then Reagan became president and lowered taxes, encouraged us to work hard and invest in IRAs that earned 10% tax free interest, and told us to be proud to be Americans. It worked.

The country turned around so dramatically that Reagan won the 1984 election in a landslide. Even the media couldn't deter people from voting for Reagan. He won 49 states, losing only in Minnesota, which was his opponent's home state.

What does this have to do with money management and economics? For one, it showed how lowering taxes really does increase tax revenue. It showed how if the government lets Americans keep more of their hard-earned money they will invest it wisely and create wealth.

Americans took their money and invested in businesses. That in turn created more jobs for the low and middle classes. During the 80s people increased their giving to charity, which helped the poor.

So what does this history lesson teach us about handling money? It instructs us that it is a good thing to lower taxes. It teaches us that living within our means is necessary to keep out of debt. And it teaches us that it is good to be generous and help others.

Today we have grown accustomed to paying for everything with credit. We buy our cars, our vacations, and our toys on credit. We even pay for our education on credit. Then each month when the bills come due we struggle to pay the minimum amounts due.

It's not easy to get out from under a lot of debt, but it is possible. It requires a lot of discipline. It might require selling the new sports car or the new 4x4 to get an older vehicle. It might even require selling the house with the super-big mortgage and buying a smaller home that you can better afford.

Selling your home might not be such a bad idea. Sell the home that takes up so much of your income and buy a duplex or fourplex. Then, you rent out all the units but the one that you live in. That way other people are paying your mortgage.

In closing, keep this in mind: If the minimum payment on your credit card debt requires more than 15% of your income, it is out of control. Take care of the problem now before it gets any worse. If you need to, shop around for a good, trustworthy and knowledgeable financial counselor and get help to reduce your debt.

One more thing, don't let this problem destroy your marriage. This is a temporary set back and there is no need to blame the other person. Work together and start digging your way out of debt.

If you can stick with it and succeed you will be stronger and wiser for having lived through it. You can then teach your own children how to not make the same mistakes you made.