To reduce evictions and foreclosures, teach teens personal finance

The Real Deal didn’t cover Gov. Kathy Hochul’s consumer-protection announcement Tuesday.

It was newsworthy that she’s trying to save New Yorkers from buy-now, pay-later schemes and other ripoffs, but it wasn’t a real estate story.

Or was it?

Consider that 90 percent of eviction cases involve failure to pay rent, and that home foreclosures result from inability to pay the mortgage, property taxes or other bills. When New Yorkers suffer financial blows, it often becomes a real estate problem.

Some crises are unavoidable because of job loss, illness or injury, but many could be averted by improving financial literacy. The real estate industry and its customers — tenants and homeowners — would be spared a lot of headaches if Americans were better at managing household budgets and recognizing traps.

The problem is universal, affecting the middle class and higher earners alike, as well as the poor. But lower earners are at greatest risk because they have less margin for error and are targeted by payday lenders and the like.

Writing about this, unfortunately, often comes off as blaming individuals rather than bad actors or a system that is stacked against the disadvantaged. Inevitably, critics call such commentary classist and condescending, and an attempt to distract people from the real villains.

To be clear: Improving financial literacy is no substitute for reducing income inequality, making housing less expensive and curbing chicanery such as deed theft. We can and should do all of that — but financial literacy is probably the easiest.

It is mind-boggling how few life skills, and financial ones in particular, are taught in school. Kids routinely finish their education without learning how credit works or what a mortgage is. A teacher might stage a stock-picking contest that simulates investing, but will never tell students they could put their earned income into a Roth IRA for kids and enjoy tax-free growth.

It’s hardly surprising that young adults wind up with five-figure credit card debt, or don’t realize that everything they buy costs twice as much after three years of finance charges.

Compounding interest can work in your favor or against you, but virtually everyone drastically underestimates its immense power — if they even know what it is.

What would happen if a teenager took $1,200 from summer jobs and, instead of buying an iPhone 15 Pro Max, put it into a Roth IRA invested in stock index funds that returned 8 percent? At age 60, he would have $35,000 to withdraw tax-free. And 10 years later, $76,000.

Yes, housing is too expensive, but saving early for retirement frees up money for the rent or mortgage once people are raising a family. Unlike the price of housing, that’s something an individual can control.

The tricks that the financial and retail industries use to separate people from their money would be a rich topic for a social studies class, and the formulas and concepts could readily be worked into math courses.

Lessons in household budgeting would go a long way toward keeping people out of housing court, where judges sometimes have to stop tenants from agreeing to repayment plans that they literally cannot afford. Perhaps the subprime crisis would not have exploded as it did if borrowers had been taught about real estate finance and scams.

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Schools have successfully addressed other social problems: Teenagers who receive comprehensive sex education are 60 percent less likely to become pregnant or impregnate someone. Providing free meals to all students improves attendance, test scores and health. There’s every reason to believe that financial education would make a difference.

Housing is the greatest expense for most Americans and goes a long way toward determining the trajectory of their lives. Financial acumen, therefore, is crucial.

We spend lots of energy debating housing remedies such as right-to-counsel, rent control and vouchers, yet almost none helping people avoid the financial mistakes that contribute to the problems we’re trying to fix.

That’s not patronizing. It’s common sense.