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Home » Education Articles » The Monetary Value Of Education

The Monetary Value of Education

The value of education is hard to define. We have heard from parents, teachers and employers that education is a pathway to a better life. Yet we must wonder how far we must go to achieve the lifestyle that we want. Whether we finish high school and start to work or go to our doctoral degree before entering upon an occupation is a personal choice about your own feelings of self-worth. It is important to look at the statistics.

Over the last couple of decades the children born to parents who do not have a college education are increasingly impoverished (1):

1. The percentage of children in low-income families of parents who do not hold a high school diploma increased from 68% to 73%.

2. The percentage of children in low-income families of parents who have a high school diploma but no college increased from 38% to 43%.

3. The percentage of children in low-income families of parents who have some college decreased from 18% to 15%.

We thus find that the education that we hold has a direct effect on the lifestyles of our children. The lower your education the more chance your children are poor and the higher education you have the lower chance that your children will be poor. Education then becomes paramount to raising children with a chance to succeed.

Adults between the age of 25 and 64 earned an average of $34,700 per year (2). Consider the following statistics (2):

1. High school dropouts earned on average $18,900 per year.

2. High school graduates earned on average $25,900 per year.

3. College graduates earned on average $45,400 per year.

4. Doctoral degrees earn on average $99,300 per year.

The more education you complete the higher your earnings will be. You can tell from the averages that doctoral graduates earn more than 5 times what an uneducated person does in a single year. Over a 30-year working career this could be as much as 2.4 million dollars. The average increase in wealth over your working life far outweighs the initial cost of $50,000 to $100,000 in educational costs. Do you believe that education is an important pathway to a successful life?

And here is another random article you might be interested in...

UK Consumers Start Clawing Their Way Out Of The Financial Debt Pit

Another year ended, and another round of UK debt statistics. CreditAction has just announced the latest summing up of the personal debt situation in the UK.

Their figures show that the end of 2005 has seen the total level of personal debt rise to an astounding £1,158bn, an increase of £100bn compared with the same time last year, and this debt is increasing at a rate of £1m every 4 minutes.

These levels of debt affect everyone in the country, and have become a way of life. The average household debt is £46,863 including mortgages or £7,786 including overdrafts, finance deals, credit cards and unsecured loans, but excluding mortgages.

To break this down further; CreditAction report that the average UK adult owes £4,125 excluding secured loans, or £24,833 including mortgage loans.

The Financial Services Authority (FSA) are seeing distressing signs from struggling consumers, as the rates of insolvencies, late credit card payments and mortgage repossession orders are all increasing. The Citizens Advice Bureau and Consumer Credit Counselling Service have both received record numbers of people calling their debt advisory services after finding they were struggling to pay back what they owe, with 9,310 calls taken during the first nine working days of 2006. One in 10 single people are reported by CreditAction as saying their finances are out of control, and according to a leading mental health expert, Dr Roger Henderson, 43% of the adult population in the UK are affected by money worries with 10.76m people suffering relationship problems because of their money worries.

The surge in those contacting the debt services for help has been put down as a positive effect by the National Debtline, as they have attributed it to an increase in public awareness on financial matters and a knowledge that help is available rather than a jump in the general debt levels.

The growth in consumer financial information in newspapers, television and websites like Moneynet (www.moneynet.co.uk) and The Motley Fool (www.fool.co.uk) has helped to raise the public awareness on many financial issues. Consumers can now find guides on financial services and can even quickly compare loans, credit cards, mortgages, insurance and other finance products on a like for like basis to obtain the best rates for services. This is making it more difficult for expensive finance providers to find customers, but as consumers become more finance savvy; many providers are seeking to protect their profits through alternative methods. Many credit card providers have started introducing charges for consumers changing credit card companies in an effort to reduce the threat that "rate tarts" pose to their profits. The credit card and financial services are also cracking down on those who make late repayments, breach overdraft limits or try to repay their debts earlier than previously agreed.

The general pattern however from the most recent data from the Bank of England looks to be that the appetite for debt among consumers appears to be waning, and greater attention is being paid by consumers to their own personal finances. The fact that 2005 saw nearly one in twenty consumers racking up £100+ in financial penalties and charges making up £553m of unnecessary financial wastage going to the lenders, means that there is some way still to go if UK consumers are to regain control of the spiraling debt crisis.

Disclaimer:

All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.

You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

Useful resources:

Moneynet comparisons ( http://www.moneynet.co.uk )

The Motley Fool (www.fool.co.uk)