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ysabetwordsmithWhen School Taught Me Basic Finance, Badly
The other day I wrote about the question Who should be teaching kids basic finance? Some point to schools and say schools should be teaching it; others point to parents and say it's their job. I noted that one difficulty with asking schools to do it is that they're already overloaded trying to cover basic academics. (And really the reason they're so overloaded on that is public school teachers end up spending, like, 90% of their time trying to manage behavior problems.) I also noted that schools seems ill equipped to teach it because, at least the one time a school I attended did try to teach basic finance, the whole lesson was basically a fail.
I would say that it's useful to teach basic finance BOTH at home and at school. That way if one skips or does a bad job, the other has a chance to pick up the slack.
1) Start with a budget first.
Good idea. But it runs into an instant problem nowadays: most people don't earn enough to live on. So they are forced to make choices, or in some cases are deprived of choices altogether, in ways that contribute to poverty and suffering. This leaves a lesson creator -- who is not the teacher nowadays, they're just narrators -- with two bad choices. A) Set up a realistic problem with numbers that can't be coaxed into an effective budget. B) Set up a completely unrealistic scenario that can be solved with a wise budget, but is nothing like what students will encounter in everyday life.
2) Differentiate needs vs. wants.
Here's another challenge, because finance isn't the same for everyone. Most people don't need a stereo. But a music reviewer needs one as a job tool, some people need one to cover up background noise so they can concentrate on studying or sleep, etc. And then you get into the really ugly part: poor people are allowed no pleasure ever. They don't even have enough to cover survival needs such as food, shelter, and health care. A life of misery is what drives some people to use drugs or risky sex or other unfortunate things just to relieve the misery for a little while. The key here is that you'll have a hard time teaching responsible finance in a system that makes it impossible for most people.
However, I did encounter a useful third category: wishes. Needs are requirements. Wants are things you would like to enjoy which are feasibly in your reach. Wishes are things you'd have to work at saving up over time or maybe catch a windfall to achieve.
3) Cheapest is not always best.
True, and most expensive is usually crap too. Unless my research creates a strong reason to shop at either end, or the middle options are clearly unsuitable, I almost always buy in the middle.
Maybe spend 4x to get shoes that will last for 5-10 years instead of falling apart in 6 months.
Another trap: you can't spend more for a better product if you don't have that money in the first place, or if you can't spare it from crucial things like food and housing. It's one factor that keeps people poor, because they are forced to buy crappy stuff that needs frequent replacement; they aren't allowed access to better products.
This is compounded by today's enshittification of everything. When something breaks, the chance of finding an equivalent product is lower than the chance of finding only inferior ones, or worse, realizing there is nothing that will do the job at all. Capitalism is doing a grand job of unselling itself. After all, if the job won't get done properly, I have no motivation to buy anything; I might as well deal with the not-done issue while my money is still in my pocket. It's why I like shopping in Amish territory; their stuff lasts better.
Another issue, not mentioned in the original post, is how precarious life has become. A budget works best with predictable income and expenses. It cannot compensate for things like job loss or 200% rent increases or a data center jacking up both electricity and water bills. And if you don't make enough to live on, you certainly can't save for emergencies. This is how the middle class is mostly gone. We now have the 1%, the formerly upper-middle-class who are now middle class because they don't have to worry about day-to-day survival, and most of the country is now poor because they are living paycheck-to-paycheck which doesn't cover survival needs reliably. You cannot teach good financial practices, like "Spend no more than 30% of your income on housing," in a situation where they cannot be applied, like how most people spend 50% or more because it is that or become homeless (which is also skyrocketing). Young people know they're getting screwed, and that undercuts your credibility as an educator.
The other day I wrote about the question Who should be teaching kids basic finance? Some point to schools and say schools should be teaching it; others point to parents and say it's their job. I noted that one difficulty with asking schools to do it is that they're already overloaded trying to cover basic academics. (And really the reason they're so overloaded on that is public school teachers end up spending, like, 90% of their time trying to manage behavior problems.) I also noted that schools seems ill equipped to teach it because, at least the one time a school I attended did try to teach basic finance, the whole lesson was basically a fail.
I would say that it's useful to teach basic finance BOTH at home and at school. That way if one skips or does a bad job, the other has a chance to pick up the slack.
1) Start with a budget first.
Good idea. But it runs into an instant problem nowadays: most people don't earn enough to live on. So they are forced to make choices, or in some cases are deprived of choices altogether, in ways that contribute to poverty and suffering. This leaves a lesson creator -- who is not the teacher nowadays, they're just narrators -- with two bad choices. A) Set up a realistic problem with numbers that can't be coaxed into an effective budget. B) Set up a completely unrealistic scenario that can be solved with a wise budget, but is nothing like what students will encounter in everyday life.
2) Differentiate needs vs. wants.
Here's another challenge, because finance isn't the same for everyone. Most people don't need a stereo. But a music reviewer needs one as a job tool, some people need one to cover up background noise so they can concentrate on studying or sleep, etc. And then you get into the really ugly part: poor people are allowed no pleasure ever. They don't even have enough to cover survival needs such as food, shelter, and health care. A life of misery is what drives some people to use drugs or risky sex or other unfortunate things just to relieve the misery for a little while. The key here is that you'll have a hard time teaching responsible finance in a system that makes it impossible for most people.
However, I did encounter a useful third category: wishes. Needs are requirements. Wants are things you would like to enjoy which are feasibly in your reach. Wishes are things you'd have to work at saving up over time or maybe catch a windfall to achieve.
3) Cheapest is not always best.
True, and most expensive is usually crap too. Unless my research creates a strong reason to shop at either end, or the middle options are clearly unsuitable, I almost always buy in the middle.
Maybe spend 4x to get shoes that will last for 5-10 years instead of falling apart in 6 months.
Another trap: you can't spend more for a better product if you don't have that money in the first place, or if you can't spare it from crucial things like food and housing. It's one factor that keeps people poor, because they are forced to buy crappy stuff that needs frequent replacement; they aren't allowed access to better products.
This is compounded by today's enshittification of everything. When something breaks, the chance of finding an equivalent product is lower than the chance of finding only inferior ones, or worse, realizing there is nothing that will do the job at all. Capitalism is doing a grand job of unselling itself. After all, if the job won't get done properly, I have no motivation to buy anything; I might as well deal with the not-done issue while my money is still in my pocket. It's why I like shopping in Amish territory; their stuff lasts better.
Another issue, not mentioned in the original post, is how precarious life has become. A budget works best with predictable income and expenses. It cannot compensate for things like job loss or 200% rent increases or a data center jacking up both electricity and water bills. And if you don't make enough to live on, you certainly can't save for emergencies. This is how the middle class is mostly gone. We now have the 1%, the formerly upper-middle-class who are now middle class because they don't have to worry about day-to-day survival, and most of the country is now poor because they are living paycheck-to-paycheck which doesn't cover survival needs reliably. You cannot teach good financial practices, like "Spend no more than 30% of your income on housing," in a situation where they cannot be applied, like how most people spend 50% or more because it is that or become homeless (which is also skyrocketing). Young people know they're getting screwed, and that undercuts your credibility as an educator.
