Finances & Money

Synchroblog: How to improve the middle class financial health

Welcome to my first “synchroblog” in which I, and about a dozen other bloggers answer one question in unison. I invite you to check out the other answers listed at the end of this article as we all have different perspectives on the question. And what’s the question?

What is the single most important initiative that the next administration should undertake to improve the economic health of the U.S. middle class?

Wow, that’s a tough question! First, I have to look at all the various needs of our American middle class, and recognize that the “middle class” spans a wide range of personalities, experiences, and traditions. If there was one thing that could help an entire population of people, I think it would have been implemented, but you’ll never make everyone happy.

But I won’t use all that as an excuse to back out of this challenge.

One Way to Fix the Middle Class’ Finances

My answer: Accountability.

The concept of accountability isn’t new here at Clever Dude. I identified who is responsible and accountable for your finances earlier this year, and I’m standing by it, especially in these turbulent economic times. With the bailout plan signed into effect (much to my dismay), it reinforces America’s reliance on others to make their decisions for them.

While we sit here complaining about why the government isn’t putting more money into our pockets, we could be starting our own business or blog, getting a job or second job, obtaining a college degree or just about anything else other than sitting in front of the TV or buying scratchoff lottery tickets. Instead of doing proper research into our real estate or investment purchases, we figure that someone else will cover up our mistakes.

But at this point, reversing the bailout plan is a slim probability, so I can’t use that option as a way to teach our American middle class the concept of accountability. Therefore I propose the following methods to teach responsibility and accountability for your own finances:

  • Education: Financial lessons should start at an early age. Therefore, the feds should create an education program to teach financial responsibility in schools. And I don’t mean just one class in 12 years; I mean every year! Even through college (at least in public schools). And I don’t want just “how to balance your checkbook” stuff. I want real lessons like frugality (not wasting), investing, credit/debt, loans and mortgages, taxes, insurance and all that other stuff that hundreds of personal finance blogs just like mine publish on each day.
  • Financial planning tax deduction: Make it cheaper and easier for people to hire a certified financial planner. You can’t force people to get educated once they graduate, but you can make it easier for them to find the resources that can advise them on a personal level about their own financial situation.
  • Reward those who save: I know our economy is strong because we spend money, but when we currently have a negative savings rate, that’s just bad. Somehow reward those who save, perhaps through higher interest rates on savings accounts, pretax savings accounts (basically a pretax CD option), and maybe even tax deductions based on savings contributions each year (less withdrawals). I don’t know, I’m just throwing out some options here.
  • More real regulation over financial institutions: Providing more real oversight (not just paperwork) over financial institutions like banks and stock markets can help keep our investments and savings more secure. Also, I expect this regulation to require more documentation and educational materials in layman’s terms on the wild investment options that are out there.
  • Cut social programs or modify them: For example, make it less attractive for people to just pop out babies because they know they’ll get more money and not have to work longer. Make people earn what’s given to them, unless they’re truly incapacitated and cannot give back to society. Having worked since age 15, and wanting to have a job before that, I can’t imagine just sitting around, waiting for that government check. I would at least go volunteer in my community if I couldn’t get a job. It’s just not my nature to be idle and not help my fellow citizen. Even if you’re in a wheelchair, you can always help somewhere.

In the end, you can’t expect everyone to really get the hint and take responsibility over their finances, but then again, it’s only the government’s responsibility to protect us. It’s not the feds’ duty to make us a profit, or make our bellies fat and full. We shouldn’t have government run institutions like Fannie Mae and Freddie Mac. It’s not the government’s duty to buy all our crappy investments to “kickstart the economy”. At best, the government should protect us from our own stupidity, but only to the point that we’re threatening ourselves or each other.

By providing more educational opportunities, planning, rewards (conservatively), regulation and oversight and reduction in social welfare systems, the government can allow more personal growth, responsibility and accountability. Like I said, you won’t cover everyone, but that’s not the government’s responsibility. We’re grown men and women and should act that way, including being proactive about our financial health.

Check out the other Syncro-blogs!

I’ve added the basic change outlined by each article below, with a link directly to the article. You’ll notice that a few of us really value education (as do I, as seen above) and think it’s the primary way to get people to fix their finances:

About the author

Clever Dude


  • I’m pleased to read that we think so much alike on the education aspect of this problem. I actually intend to speak to my Congressman about making education a component of any future legislation dealing with the existing crisis.

  • I completely agree with all your points. Lack of personal responsibility has gotten us into this mess and it’s the only way to improve the situation. I mean personal responsibility of everyone: Government, businesses, people… everyone.

  • Social programs need a reform this is true. Anytime someone with children or a family is working towards a valuable 4 year degree (within a reasonable amount of time) the welfare and aid they are getting is a good investment in America.

  • I love #2. I think that makes a lot of sense, and is actually something the government could really get behind. They could even limit the deduction to, say, the first $500 or $1000 to discourage abuse of the deduction. I also agree with #5, although I don’t know how you can practically put it into practice. As a society, we simply need a stronger sense of personal responsibility.

  • Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

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