How to Panic-Proof Your Future

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So what's been in the news lately? Let me give you a very brief overview:

Subprime. Credit crunch. Bailout? Foreclosure. Default. ARMs. Massive losses. Falling housing prices. Layoffs. Rate cut. Markets plunge ...

... Recession?

As the nation's economic situation gets ever more disturbing, we're seeing a flurry of proposals on how to stabilize things. The Fed cut interest rates earlier this week, and is expected to do so again at its next meeting; Congress and the White House have proposed a plan to send rebate checks to taxpayers to jump-start the economy. But it's possible that the best way out of this mess isn't any of these things, but something much simpler:

Education.

Sen. Hillary Clinton (D-N.Y.) recently talked to The Washington Post's Michelle Singletary about her proposed economic stimulus package. Whatever you think of Clinton as a candidate (and I'm by no means endorsing any position), she made a very good point during the conversation:

A lot of people are in over their heads in debt, and it's not just mortgage debt. It's credit card debt. It's consumer debt of all kinds. It's college loan debt. It's medical debt. And what we've got to do is provide as much help as possible to give people a chance to work their way out and get their finances in order short of having to go into bankruptcy.

Clinton's proposal calls for an "emergency support fund" that would, among other things, help pay for financial counseling for troubled households.

Singletary says, "Financial counseling can do more for households and communities than any tax plan," and she's absolutely right. The right financial counseling will do more than just bail people out in the short term. Done properly, it will teach people to build wealth over the long haul. And that will go much farther than any check from the government.

Here at the Fool, we've turned our attention to financial literacy via our philanthropic initiative, Foolanthropy. We're transitioning Foolanthropy into a year-round program, completely dedicated to improving financial education for youth. As Clinton points out in the article, schools once taught home economics as a matter of course; students learned to balance checkbooks, create budgets, and control the money coming in and out of their lives. Nowadays, too few people know even these basic skills.

The current crisis in the economy is a powerful reminder of the troubles to which financial illiteracy can contribute. It's also a wonderful chance to change this pattern. Foolanthropy is dedicated to ensuring that the next generation of Americans will be much better armed against financial shake-ups of all kinds. If this sounds like something you can get behind, please join us in our efforts.