Rhode island makes financial literacy classes required for high school students(themorningnews.com)
themorningnews.com
Rhode island makes financial literacy classes required for high school students
https://themorningnews.com/news/2021/06/17/this-public-high-school-is-brainwashing-its-students-to-set-a-monthly-budget/
261 comments
The state is the last institution I trust to design a "life school" curriculum.
Remember, these are the people who require your drivers ed instructor to tell you to go 55 on I95 where the traffic goes 85. They're optimizing for covering their own butts while nominally educating people. They don't really care about truly education people so those people can go do to what will result in the best outcome for them.
They'll do something self serving and asinine like tell students you should make minimum payments on high interest debt rather than ask for a financial hardship extension/reduction for government services/fees/fines (which in many cases are legally required to take that into account).
Remember, these are the people who require your drivers ed instructor to tell you to go 55 on I95 where the traffic goes 85. They're optimizing for covering their own butts while nominally educating people. They don't really care about truly education people so those people can go do to what will result in the best outcome for them.
They'll do something self serving and asinine like tell students you should make minimum payments on high interest debt rather than ask for a financial hardship extension/reduction for government services/fees/fines (which in many cases are legally required to take that into account).
That's funny, because public school is where I learned the difference between letter of the law and spirit of the law. We even did a "compare and contrast" worksheet with speed limits as one of the examples.
Besides, the alternatives to public education are all worse.
Besides, the alternatives to public education are all worse.
The indoctrination is so obvious when statements are made with no justification or even any attempt.
You can hold this opinion without indoctrination. If you believe that inequality in education is wrong you will likely feel this way as creating a private system without inequality seems very unlikely. Not to say that public systems are necessarily equal. Obviously they can fail here too.
Public schooling was created because the government was threatened by catholic parochial education being widely available.
Catholicism has fewer cultural proscriptions than what the predominant waspy culture wanted. For example, Catholic schools in native American reservations didn't seek to undo Indian culture. This state of affairs was not acceptable and there was a chance said children would become catholic.
Thus, the WASPs, unable to organize schooling in their own churches for their children at an affordable price (a problem which still exists today.. catholic schools are empirically cheaper than other christian schools), turned to the government as the only way to combat the papists.
https://en.wikipedia.org/wiki/Compulsory_public_education_in...
I am not anti public school, but I just take issues with the idea that public schools original purpose was for equality. As Thomas Sowell points out in "education in america", catholic schools do better than public ones for minorities even when accounting for socieconomic factors. This is probably why minorities disproportionately favor vouchers.
Public schools leading to equality is today a 'fact' asserted with little empirical data and any attempt at refutation is met with all kinds of accusations.
Catholicism has fewer cultural proscriptions than what the predominant waspy culture wanted. For example, Catholic schools in native American reservations didn't seek to undo Indian culture. This state of affairs was not acceptable and there was a chance said children would become catholic.
Thus, the WASPs, unable to organize schooling in their own churches for their children at an affordable price (a problem which still exists today.. catholic schools are empirically cheaper than other christian schools), turned to the government as the only way to combat the papists.
https://en.wikipedia.org/wiki/Compulsory_public_education_in...
I am not anti public school, but I just take issues with the idea that public schools original purpose was for equality. As Thomas Sowell points out in "education in america", catholic schools do better than public ones for minorities even when accounting for socieconomic factors. This is probably why minorities disproportionately favor vouchers.
Public schools leading to equality is today a 'fact' asserted with little empirical data and any attempt at refutation is met with all kinds of accusations.
> I just take issues with the idea that public schools original purpose was for equality.
I didn't say it was.
> For example, Catholic schools in native American reservations didn't seek to undo Indian culture.
Are you sure about that?
> Public schools leading to equality is today a 'fact' asserted with little empirical data
I know of no person who asserts that fact.
I didn't say it was.
> For example, Catholic schools in native American reservations didn't seek to undo Indian culture.
Are you sure about that?
> Public schools leading to equality is today a 'fact' asserted with little empirical data
I know of no person who asserts that fact.
> are you sure about that?
Yes. Whether it was the California missions or the Jesuit missions of Canada, by far the missionaries were better than the other European authorities. Perfect? No. Better... Yes
This is a good article detailing the original approach of the church before the authorities started getting involved. It's not what you think it is.
https://forheavenssake46778317.wordpress.com/2021/06/08/resi...
Yes. Whether it was the California missions or the Jesuit missions of Canada, by far the missionaries were better than the other European authorities. Perfect? No. Better... Yes
This is a good article detailing the original approach of the church before the authorities started getting involved. It's not what you think it is.
https://forheavenssake46778317.wordpress.com/2021/06/08/resi...
I will read it though I have my doubts regarding the scholastic rigor of a wordpress blog written by what appears to be a catholic apologist (not that that makes them wrong just suspect as is any apologist).
But with all respect, you don't in fact know what I think.
But with all respect, you don't in fact know what I think.
> But with all respect, you don't in fact know what I think.
That's fair. I shouldn't have said that.
Re the blog post... it cites several books and scholarly texts, and mainly chooses which ones to present. Now of course, that's a form of bias, but the books and source materials are explicitly listed and I believe they paint the picture even clearer than the blog post.
That's fair. I shouldn't have said that.
Re the blog post... it cites several books and scholarly texts, and mainly chooses which ones to present. Now of course, that's a form of bias, but the books and source materials are explicitly listed and I believe they paint the picture even clearer than the blog post.
I don't disagree.
There are millions of people who went to charter schools, private schools or were home schooled who would take issue with his last sentence. They got fine educations. I'm a big believer in good parents making up for bad schools but you can't just hand wave away the productivity of all the professionals involved in schooling by saying "their parents cared they would have turned out fine wherever they went" (which is the typical retort).
There are millions of people who went to charter schools, private schools or were home schooled who would take issue with his last sentence. They got fine educations. I'm a big believer in good parents making up for bad schools but you can't just hand wave away the productivity of all the professionals involved in schooling by saying "their parents cared they would have turned out fine wherever they went" (which is the typical retort).
Schools/universities are institutions for mass indoctrination -Noam Chomsky
I'm normally on the "damn gubmint" side of things but in public school we had multiple math teachers who explained why you shouldn't pay minimum payments.
Pretty sure learning about interest was part of the curriculum.
Pretty sure learning about interest was part of the curriculum.
Financial literacy was also taught in school. In fact a lot of "why didn't they teach this school?!?" stuff was taught in school, people just forgot or opted out of that class.
I went to a shitty public school in the middle of nowhere and they taught us to budget, handle bank accounts, etc. We even had fake jobs with fake bills and had to make a household budget. They even offered a class with fake babies that girls had to carry around to teach them parenting skills.
The problem with teaching life skills is that they are not retained if they are not relevant to a person's situation. Kids don't have bills or jobs; money is an abstract concept to them. With this in mind, financial literacy should not be taught in schools, it should be taught to 20-30 year olds who long since left school.
I went to a shitty public school in the middle of nowhere and they taught us to budget, handle bank accounts, etc. We even had fake jobs with fake bills and had to make a household budget. They even offered a class with fake babies that girls had to carry around to teach them parenting skills.
The problem with teaching life skills is that they are not retained if they are not relevant to a person's situation. Kids don't have bills or jobs; money is an abstract concept to them. With this in mind, financial literacy should not be taught in schools, it should be taught to 20-30 year olds who long since left school.
In my (not special) public school in the middle of nowhere, everyone (boys and girls) had to take multiple years of home ec: sewing, paying bills, understanding sexually transmitted diseases, and caring for a (fake) baby you take home.
They were extremely easy classes taught by not-the-best teachers (often gym teachers) but still pretty informative and I did learn how to sew pretty well.
My wife attended well-known private schools in the US and Korea and never learned these skills.
They were extremely easy classes taught by not-the-best teachers (often gym teachers) but still pretty informative and I did learn how to sew pretty well.
My wife attended well-known private schools in the US and Korea and never learned these skills.
Perhaps that is because those skills are stereotypical or political and not actually all that valuable for success in life. I highly doubt that your wife (or humanity in general) would fail to care for babies were it not for home ec classes. However, some groups may, for better or for worse, have opinions predicting what happens to teen pregnancy rates in the face of such experience.
This applies to school education in general. We learn a lot but never get to use it so we do the natural human thing, we forget about it.
On the other hand, I had a social studies teacher giving a… finance? (is that a class in high school? I know it wasn't a government course) class in which he explained that credit cards were the best means of paying for something. But he was big on the "why," which, in his class was "float." Cash was the stupidest way to pay for anything because the money was gone immediately. Checks were only slightly less evil. But if you could just pay with a credit card you could float that money out there and spend more than you had. Bonus if you could pay off one credit card with another, but for reasons he did not explain "that only works so far."
The man showed us his wallet full of credit cards, but I think (and hope) that we were all old enough to understand what was going on and simply feel a little bad for him. The moral of the anecdote, though, is that sometimes the code doesn't run the way you planned it to, and good ideas run through the wrong systems result in strange errors.
My father teaches so long as he stubbornly refuses to retire, and as of 5 years ago was still required to teach about floppy disks. He is in a non-tech field. I'm a product of my experiences, but I skeptically and open-mindedly remain on the 'damn gubmint' side for now.
The man showed us his wallet full of credit cards, but I think (and hope) that we were all old enough to understand what was going on and simply feel a little bad for him. The moral of the anecdote, though, is that sometimes the code doesn't run the way you planned it to, and good ideas run through the wrong systems result in strange errors.
My father teaches so long as he stubbornly refuses to retire, and as of 5 years ago was still required to teach about floppy disks. He is in a non-tech field. I'm a product of my experiences, but I skeptically and open-mindedly remain on the 'damn gubmint' side for now.
How is the school teaching kids to go the speed limit (instead of 30 miles over it) proof that the government is “bad.” School is supposed to teach kids what they need to know and once they have a basic intuition they can further look into things (like hardship extensions, etc.)
This includes financial literacy.
Tbf, I have no idea what the average level of financial literacy is. But I worked in financial services and I can confirm that: having a lot of cash from a job in which you are supposed to have financial literacy (corporate lawyer, accountant, etc.) and/or working in financial services in which you have completed exams on financial literacy...does not mean you have financial literacy/will make reasonable decisions.
It shifts your view of reality significantly when you are in your early 20s, just out of college having to explain basic elements of finance to: a financial adviser managing $100mm of other people's money, a corporate lawyer worth ~$10mm, [insert other horrific situations].
...there is no other way to gain knowledge apart from learning, it is not some innate skill. But that supposes that people designing the course know what they are doing, this is a fairly ambitious assumption given that anyone who has financial competence is, generally, not designing courses for the state govt.
And, ofc, lack of information isn't why people make poor financial choices. One of the flaws of financial regulation (and economics) is assuming that if everyone had perfect information, they would make the same decision. This is equivalent to the guy who has a view on the death penalty and thinks anyone who disagrees with them does so because they don't have the "correct information". The issue isn't information, people know they shouldn't take out the high-interest loan when they have to speak to some sleazy guy in an ill-fitting suit at a strip mall (these heuristics work well). People take out these loans because of poverty and a lack of options (particularly in the US, massive unbanked population, large banks won't deal with poor people, unconscionable level of arbitrary fees that fine poverty). Unless the course teaches people how not to be poor, it is flushing money down the drain.
(A side-note for the target reader: the reason why rich people make bad decisions also isn't bad information...it is usually a combination of greed and studying to get stupid i.e. subjects like economics. Wealthy people only see upside, they will believe utterly ludicrous shit that makes no sense because...hey, they are wealthy, and they got wealthy through those smarts (as an example, every wealthy investor I have ever met has gone through the "goldbug" phase...it is amazing how consistent this is). Again, you can't teach it. Ironically, if you combined the paranoia of a poor person with the risk tolerance of a risk person, you would actually have someone who makes decent decisions...but those two attributes tend not to be found within one individual.)
Tbf, I have no idea what the average level of financial literacy is. But I worked in financial services and I can confirm that: having a lot of cash from a job in which you are supposed to have financial literacy (corporate lawyer, accountant, etc.) and/or working in financial services in which you have completed exams on financial literacy...does not mean you have financial literacy/will make reasonable decisions.
It shifts your view of reality significantly when you are in your early 20s, just out of college having to explain basic elements of finance to: a financial adviser managing $100mm of other people's money, a corporate lawyer worth ~$10mm, [insert other horrific situations].
...there is no other way to gain knowledge apart from learning, it is not some innate skill. But that supposes that people designing the course know what they are doing, this is a fairly ambitious assumption given that anyone who has financial competence is, generally, not designing courses for the state govt.
And, ofc, lack of information isn't why people make poor financial choices. One of the flaws of financial regulation (and economics) is assuming that if everyone had perfect information, they would make the same decision. This is equivalent to the guy who has a view on the death penalty and thinks anyone who disagrees with them does so because they don't have the "correct information". The issue isn't information, people know they shouldn't take out the high-interest loan when they have to speak to some sleazy guy in an ill-fitting suit at a strip mall (these heuristics work well). People take out these loans because of poverty and a lack of options (particularly in the US, massive unbanked population, large banks won't deal with poor people, unconscionable level of arbitrary fees that fine poverty). Unless the course teaches people how not to be poor, it is flushing money down the drain.
(A side-note for the target reader: the reason why rich people make bad decisions also isn't bad information...it is usually a combination of greed and studying to get stupid i.e. subjects like economics. Wealthy people only see upside, they will believe utterly ludicrous shit that makes no sense because...hey, they are wealthy, and they got wealthy through those smarts (as an example, every wealthy investor I have ever met has gone through the "goldbug" phase...it is amazing how consistent this is). Again, you can't teach it. Ironically, if you combined the paranoia of a poor person with the risk tolerance of a risk person, you would actually have someone who makes decent decisions...but those two attributes tend not to be found within one individual.)
know someone paying > $4k a year in car insurance because of speeding tickets from areas like that. Going the speed everyone else is going but over the speed limit. Life lesson I got from that was obey the speed limit even if everyone else is speeding.
Honestly the issue is bad law. Laws are social contracts. So if everyone is breaking the contract then obviously the contract needs to be revisited.
Or the law was reasonable and people actually hurt society by not following it, so we have to enforce it better.
In the case of speeding it is well known that higher speeds leads to more traffic deaths so we can easily calculate the death toll of people going 85 instead of 55 and implement appropriate measures to reduce that.
In the case of speeding it is well known that higher speeds leads to more traffic deaths so we can easily calculate the death toll of people going 85 instead of 55 and implement appropriate measures to reduce that.
Just like prohibition and its sequel, the "War on Drugs," this idea is a dud. When people show you they won't follow your laws, believe them. I mean ostensibly government is "by the consent of the governed," right? Why is your response to "consent denied" to force yourself upon them with renewed vigor?
Just as a counterpoint, drink driving laws were widely disregarded in Australia in the 80's, and only now is it starting to become socially unacceptable.
Just because everyone ignores or despises a law, it doesn't necessarily make it unjust or wrong.
Just because everyone ignores or despises a law, it doesn't necessarily make it unjust or wrong.
I love that in Australia drink driving is socially rejected. Not 100%, but more so than in any other country I’ve seen.
Even with many young men, you are not cool, not a rebel, not “boys will be boys”, not “just this once”, none of that “I live nearby”. You are a bloody idiot, mate, and a wanker.
Even with many young men, you are not cool, not a rebel, not “boys will be boys”, not “just this once”, none of that “I live nearby”. You are a bloody idiot, mate, and a wanker.
I agree with your point in the sense that popularity shouldn't be the overall guide on the law - morality should play a role.
But there is a very practical point that if the "governed" are not listening, than the "governor" had better! Revolutions and civil wars have occurred over such.
Also too often "popular" is conflated with "visible/noisome support". See the gay marriage here in Australia. Lots of noise on both sides, it took a referendum to prove that 61% supported it.
Aside: my experience is it has been socially unacceptable to drink drive for 25+ years for everyone I know. You and I are having different life experiences!
Hope yours is a good one, cheers!
But there is a very practical point that if the "governed" are not listening, than the "governor" had better! Revolutions and civil wars have occurred over such.
Also too often "popular" is conflated with "visible/noisome support". See the gay marriage here in Australia. Lots of noise on both sides, it took a referendum to prove that 61% supported it.
Aside: my experience is it has been socially unacceptable to drink drive for 25+ years for everyone I know. You and I are having different life experiences!
Hope yours is a good one, cheers!
And the same in Oz for littering and mandatory bicycle helmets. People initially disregarded the laws but then the behavior became socially normalized. Nowdays if someone is seen littering they will often be scolded by a random citizen.
[deleted]
It's less well known that traffic deaths increased with the 55 speed limit, because then people would prefer city/rural roads with higher death rates.
Things aren't always so simple when second level effects are accounted for.
Things aren't always so simple when second level effects are accounted for.
I wasn't able to find support for that statement.
Several reports point out that when the 55 speed limit was repealed, traffic deaths increased. Here are a couple of citations:
1) "Rising speed limits over the past 25 years have cost nearly 37,000 lives, including more than 1,900 in 2017 alone, a new study by the Insurance Institute for Highway Safety shows ... For the new study, Charles Farmer, IIHS vice president for research and statistical services, analyzed the effect of changes in the maximum posted speed limit in every state from 1993 to 2017. ... Farmer found that a 5 mph increase in the maximum speed limit was associated with an 8 percent increase in the fatality rate on interstates and freeways " - https://www.iihs.org/news/detail/speed-limit-increases-are-t...
2) "Long-Term Effects of Repealing the National Maximum Speed Limit in the United States" - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2724439/
> We examined the long-term effects of the 1995 repeal of federal speed limit controls on road fatalities and injuries in fatal crashes. ... We found a 3.2% increase in road fatalities attributable to the raised speed limits on all road types in the United States. The highest increases were on rural interstates (9.1%) and urban interstates (4.0%). We estimated that 12 545 deaths (95% confidence interval [CI] = 8739, 16 352) and 36 583 injuries in fatal crashes (95% CI = 29 322, 43 844) were attributable to increases in speed limits across the United States."
But that's after it was repealed.
Going back to when the law was put into place, https://en.wikipedia.org/wiki/National_Maximum_Speed_Law#Saf... states "The limit's effect on highway safety is unclear."
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5005740/ shows "Joinpoint analysis of trends in motor vehicle traffic fatality rates, all ages, by sex, 1968 to 2010" in figure 2 you can see the decrease in fatalities after the law was put into place in 1973, followed by a regression to a decreasing mean.
This is in agreement with Wikipedia's statement "Although the vast majority of states reported fewer traffic deaths in 1974 compared with 1973, there were in fact three states where traffic deaths actually increased ... According to the National Research Council, there was a decrease in fatalities of about 3,000 to 5,000 lives in 1974, and about 2,000 to 4,000 lives saved annually thereafter through 1983".
It therefore doesn't appear that traffic deaths increased with the enactment of the National Maximum Speed Law.
Several reports point out that when the 55 speed limit was repealed, traffic deaths increased. Here are a couple of citations:
1) "Rising speed limits over the past 25 years have cost nearly 37,000 lives, including more than 1,900 in 2017 alone, a new study by the Insurance Institute for Highway Safety shows ... For the new study, Charles Farmer, IIHS vice president for research and statistical services, analyzed the effect of changes in the maximum posted speed limit in every state from 1993 to 2017. ... Farmer found that a 5 mph increase in the maximum speed limit was associated with an 8 percent increase in the fatality rate on interstates and freeways " - https://www.iihs.org/news/detail/speed-limit-increases-are-t...
2) "Long-Term Effects of Repealing the National Maximum Speed Limit in the United States" - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2724439/
> We examined the long-term effects of the 1995 repeal of federal speed limit controls on road fatalities and injuries in fatal crashes. ... We found a 3.2% increase in road fatalities attributable to the raised speed limits on all road types in the United States. The highest increases were on rural interstates (9.1%) and urban interstates (4.0%). We estimated that 12 545 deaths (95% confidence interval [CI] = 8739, 16 352) and 36 583 injuries in fatal crashes (95% CI = 29 322, 43 844) were attributable to increases in speed limits across the United States."
But that's after it was repealed.
Going back to when the law was put into place, https://en.wikipedia.org/wiki/National_Maximum_Speed_Law#Saf... states "The limit's effect on highway safety is unclear."
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5005740/ shows "Joinpoint analysis of trends in motor vehicle traffic fatality rates, all ages, by sex, 1968 to 2010" in figure 2 you can see the decrease in fatalities after the law was put into place in 1973, followed by a regression to a decreasing mean.
This is in agreement with Wikipedia's statement "Although the vast majority of states reported fewer traffic deaths in 1974 compared with 1973, there were in fact three states where traffic deaths actually increased ... According to the National Research Council, there was a decrease in fatalities of about 3,000 to 5,000 lives in 1974, and about 2,000 to 4,000 lives saved annually thereafter through 1983".
It therefore doesn't appear that traffic deaths increased with the enactment of the National Maximum Speed Law.
You have to design roads for certain speeds. Higher speed doesn't lead to more accidents, it leads to worse accidents. Road design decides how frequent those accidents are.
People ignore the sign if the sign doesn't match the road design.
People ignore the sign if the sign doesn't match the road design.
One part of that is mismatch between road and speed limit.
Roads designed for 30, 55 and 85 miles are completely different beasts with different lane width, straight segments length, turn radius, traffic calming elements, etc.
Puting an autobahn and plunking a 50 mph limit there is a recipe for all-out "speeding."
Roads designed for 30, 55 and 85 miles are completely different beasts with different lane width, straight segments length, turn radius, traffic calming elements, etc.
Puting an autobahn and plunking a 50 mph limit there is a recipe for all-out "speeding."
California has an obscure law that says something like if 90% of the people are breaking a law (going over a speed) the state needs to up, or lower, the speed limit.
A lawyer got the county to up the speed limit on a boulevard I drive, after he got mad over a ticket.
(I don't know the details. It's something to do with Speed Traps I think? I remember seeing an angry Lawyer, and felt he had a right to be pissed in a local newspaper.)
A lawyer got the county to up the speed limit on a boulevard I drive, after he got mad over a ticket.
(I don't know the details. It's something to do with Speed Traps I think? I remember seeing an angry Lawyer, and felt he had a right to be pissed in a local newspaper.)
I agree, though I think the "bad law" is the way the roads are designed, and the city planning which lead to the need for those sorts of roads in the first place.
That is, the contract that needs to be revisited is the contract which says that we prefer private cars over mass transit, walking, and bikes; that we prefer zoning over mixed use; that we prefer sprawl over density; that we design roads the encourage people to speed; that we mandate parking minimums; etc.
While I think you think the contract to revisit in the one which says people are breaking the law by following the speed of traffic instead of the speed limit.
That is, the contract that needs to be revisited is the contract which says that we prefer private cars over mass transit, walking, and bikes; that we prefer zoning over mixed use; that we prefer sprawl over density; that we design roads the encourage people to speed; that we mandate parking minimums; etc.
While I think you think the contract to revisit in the one which says people are breaking the law by following the speed of traffic instead of the speed limit.
These are also the same people that gave us the food pyramid.
I agree with this, but there is a big BUT. We need some changes in how we think. Specifically we need to recognize specialization. We often give the excuse of "It is their responsibility to understand the terms and services." But it's all lawyer speak and we need to recognize that not everyone is a lawyer. The same goes for finance. Using these excuses just allows for ample abuse.
As an example of this, when I took out student loans they were sold to me as "fixed interest" (literal words used and it was at the typical point where you have the option to pick a fixed interest or variable interest rate). My dad and I had a conversation about fixed vs variable interests and the risks involved. But to our surprise later we found that it was "fixed interest repayment option" and not "fixed interest repayment rate." I wouldn't say my family is financially illiterate, far from it actually. But there's still predatory behavior like this that preys on more "Swiss-cheese knowledge" that a non-expert would have and a lack of understanding all the legalize (and my dad has a JD).
So I do think we should make people more rounded in their knowledge, but we also need to do more and ensure that we curb predatory behavior. The disadvantage of making people more well rounded is that the excuse of "they should have understood" becomes more powerful. But no matter how good you are you're not going to beat a team of lawyers and psychologists that want to implement dark patterns. But then again, I think if people were more educated then this argument would be less contentious and we'd recognize that a single person is always going to be outclassed.
As an example of this, when I took out student loans they were sold to me as "fixed interest" (literal words used and it was at the typical point where you have the option to pick a fixed interest or variable interest rate). My dad and I had a conversation about fixed vs variable interests and the risks involved. But to our surprise later we found that it was "fixed interest repayment option" and not "fixed interest repayment rate." I wouldn't say my family is financially illiterate, far from it actually. But there's still predatory behavior like this that preys on more "Swiss-cheese knowledge" that a non-expert would have and a lack of understanding all the legalize (and my dad has a JD).
So I do think we should make people more rounded in their knowledge, but we also need to do more and ensure that we curb predatory behavior. The disadvantage of making people more well rounded is that the excuse of "they should have understood" becomes more powerful. But no matter how good you are you're not going to beat a team of lawyers and psychologists that want to implement dark patterns. But then again, I think if people were more educated then this argument would be less contentious and we'd recognize that a single person is always going to be outclassed.
This is a vital point, its not a fair contest if it's me in my spare time vs a team of worldclass layers fulltime.
Any specialist worth their salt can mislead or scam a layman. In some idustries you go to jail, but in others its somehow an accepted practice.
Any specialist worth their salt can mislead or scam a layman. In some idustries you go to jail, but in others its somehow an accepted practice.
Most of these were taught in required courses when I was in school, and I have no reason to believe this has changed:
media competency - part of history class, including evaluating sources, history of yellow journalism, etc.
scientific method - 6+ years of science class
cui bono - this is apparently a fancy term for motive, which was discussed during history class (specifically explaining the judicial branch)
negotiations, assertiveness, how to deal with bullies - a required part of working on group projects for 6+ years of life
mental health basics, mechanics of addiction - health class
Economics 101 is the only one on your list that was missing, and presumably a financial literacy course would cover this.
media competency - part of history class, including evaluating sources, history of yellow journalism, etc.
scientific method - 6+ years of science class
cui bono - this is apparently a fancy term for motive, which was discussed during history class (specifically explaining the judicial branch)
negotiations, assertiveness, how to deal with bullies - a required part of working on group projects for 6+ years of life
mental health basics, mechanics of addiction - health class
Economics 101 is the only one on your list that was missing, and presumably a financial literacy course would cover this.
These do not seem sufficient in my opinion. The reliance of history class to teach media competency in modern times for example very much depends on the quality of instruction. For an average teacher the history class would be filled with historical facts without reference to the modern times.
Similarly, science class tends to teach knowledge (including knowledge of the scientific method) but not actually applying the scientific method to any real-life scenarios. Even with science labs, students might use the scientific method during class only, without extending it to decision making in life.
Negotiations and stuff can be learned from group projects? No way. Group projects are primarily cooperative and students share the fruits of their combined labor. How does that relate to life scenarios like, negotiating a lease agreement with a landlord who has very different incentives? Or negotiating a job offer with a prospective employer when there is a clear mismatch in power between the two? It doesn't.
Similarly, science class tends to teach knowledge (including knowledge of the scientific method) but not actually applying the scientific method to any real-life scenarios. Even with science labs, students might use the scientific method during class only, without extending it to decision making in life.
Negotiations and stuff can be learned from group projects? No way. Group projects are primarily cooperative and students share the fruits of their combined labor. How does that relate to life scenarios like, negotiating a lease agreement with a landlord who has very different incentives? Or negotiating a job offer with a prospective employer when there is a clear mismatch in power between the two? It doesn't.
Given we don't even use the scientific method to determine the best subjects to teach, I don't think there will be a push to teach using the scientific method in real life scenarios.
>best subjects to teach
Best subjects for what?
Best subjects for what?
Whatever we decide we want to prepare kids for. Do we want auto-didacts? Do we want them to just be able to do all citizen things like maintain their house/car and do their taxes? Do we want to have the best researchers? Do we want the best athletes? Do we want citizens expert in our own culture/history?
The school system has always seemed aimless to me until you hit university where the goal more clearly is to either make you a great professional or a great researcher.
The school system has always seemed aimless to me until you hit university where the goal more clearly is to either make you a great professional or a great researcher.
It’s aimless because we (I’m assuming American) have decided to drop the one thing public schools were actually designed for: creating citizens that share a common national identity based on having learned the same things and values. It’s a tool of nationalism, and when you forget or willfully expunge that half of public schools (the other half being the creation of a populace that is decently educated enough to engage in civic society), shit starts to look pointless.
Edit: As an example of this, most Americans can recite both the pledge of allegiance and a canon of children’s rhymes — yankee doodle, mary had a little lamb, etc. Knowledge of which act as an immediate shibboleth to others that you on some level grew up American.
Edit: As an example of this, most Americans can recite both the pledge of allegiance and a canon of children’s rhymes — yankee doodle, mary had a little lamb, etc. Knowledge of which act as an immediate shibboleth to others that you on some level grew up American.
>creating citizens that share a common national identity based on having learned the same things and values.
This is actually very important for a melting pot country of immigrants.
This is actually very important for a melting pot country of immigrants.
Can't we just read what the founders of American education modeled it after and what they said they wanted to accomplish?
People say that schools are failing, but compared to their stated goals they seem to be humming along alright.
People say that schools are failing, but compared to their stated goals they seem to be humming along alright.
I had some decent science teachers in high school. I don’t feel like it gave me a real sense of the scientific method and the labs were mostly technique labs rather than discovery or scientific method labs. I think this was driven by curriculum programming rather than laziness on the teachers’ part.
Are you hearing youself? Do you really believe that a class goup project prepares you to negotiate an employment contract or a morthgage? Does a person coming out of scool understand they rights, where to complain if they employer is avuvsing them, can sue a landlord or can read a health insurance contract and understand what it covers?
Preposterous
Preposterous
> media competency, scientific method, cui bono, negotiations, assertiveness, how to deal with bullies, mental health basics, economics 101, mechanics of addiction and manipulation
These are all, in principle, taught at most public schools. The problem is students don't learn them.
These are all, in principle, taught at most public schools. The problem is students don't learn them.
The problem is that by the time students start being taught them, they've been exposed to years of media and ad messaging influence which undermine them.
I went to a solid Californian public school. Zero anything on mental health or addiction. Got the negotiation but through extracurriculars; the core programme stayed almost intentionally clear of anything remotely commercial.
I have lived in 3 countries, and have never met anyone who learnt their employment rights, unions, health insurance, or how to draft a contract at school.
We had a class called "Career and Life Management" in High School. It was kind of trivial stupid stuff, but then again, it may have been useful to someone who did not get good information from their parents.
Edit: quick google suggests it still exists: https://education.alberta.ca/media/160199/calm.pdf
Edit: quick google suggests it still exists: https://education.alberta.ca/media/160199/calm.pdf
As an older person, the issue i see is most of these aren't really a problem until later in life. E.g. adolescents can eat all kinds of bad food. It will have little real impact until roughly late 30s. Earlier financial literacy will help to a point, but bolsters are needed every decade. Same with family relations. Motivated people like me fine, but many families and people just don't get the right push and it hurts to watch people suffer needlessly.
That’s the problem I have when people argue for the important ace of rigorous high school civics: the useful parts won’t prove to be useful until several years after graduation, so even a motivated student has ample time to forget (and the students know they’ll forget, so there’s even less motivation to learn in the first place)
Exactly. The consequences are too abstract to rate as important.
If you look around you will see more and more far kids these days. It might not kill you to be a fat twelve year old but it can hardly be considered of no real impact.
> E.g. adolescents can eat all kinds of bad food. It will have little real impact until roughly late 30s.
20% of teens in America are obese. I think you underestimate how much of a problem it is. Here's a source https://www.cdc.gov/obesity/data/childhood.html
20% of teens in America are obese. I think you underestimate how much of a problem it is. Here's a source https://www.cdc.gov/obesity/data/childhood.html
Yeah im well aware of that. But teenage obesity is not nearly as much of a problem as e.g. adult diabetes (~33%), breast cancer and colorectal cancer. Teens don't watch their peers struggle in and out of the car in the hospital parking lot for surgery. We need followups to adolescent health education in adulthood.
Adult diabetes is mostly a follow up to teenage obesity though. Being obese is not fun, even if you're just a teen.
> We need followups to adolescent health education in adulthood.
Sure, but having a basis in high school wouldn't hurt.
> We need followups to adolescent health education in adulthood.
Sure, but having a basis in high school wouldn't hurt.
i remember CALM class from my high school, and i remember it being a complete blow-off that was taught by the teacher that obviously got the short end of the stick, and none of the students took it seriously.
i learned a lot more in casual life advice from good teachers than i did from the teacher who was forced to teach a government defined "life advice" course. i wish there was a reliable way to impart that important advice to high-school students, but i don't think a government-enforced cirriculum is the way to do it.
i learned a lot more in casual life advice from good teachers than i did from the teacher who was forced to teach a government defined "life advice" course. i wish there was a reliable way to impart that important advice to high-school students, but i don't think a government-enforced cirriculum is the way to do it.
I definitely agree that this kind of curriculum should be widely offered.
I'm much more doubtful about the scope of the positive impact it would have.
I think it's roughly the idea that lack of culture is caused by a distribution problem. I think internet more than showed that improving distribution works only up to a limit.
There is a theory - the paradox of abundance - that paradoxally after you reach this limit you actually decrease access to the ones that need it the most.
https://perell.com/note/the-paradox-of-abundance/
I'm much more doubtful about the scope of the positive impact it would have.
I think it's roughly the idea that lack of culture is caused by a distribution problem. I think internet more than showed that improving distribution works only up to a limit.
There is a theory - the paradox of abundance - that paradoxally after you reach this limit you actually decrease access to the ones that need it the most.
https://perell.com/note/the-paradox-of-abundance/
I think people forget what high school is like. I had something like what you've described. It was called "Life Skills". Most students treated it like other courses - they didn't care at all and learned almost nothing.
I'm someone who liked school for the most part, and even I treated it as a "just pay attention enough to pass the test" class.
I'm someone who liked school for the most part, and even I treated it as a "just pay attention enough to pass the test" class.
I totally agree. Do people really think a bunch of 16 year olds are going to pay attention to a class where you learn how to do your taxes or learn about the time value of money? The people who need this information the most were also 100% the last people on Earth who'd have paid attention to a class where it was taught, at least at my school. Our focus should be simplifying the way our systems are structured and protecting people from being taken advantage of by corporations who do know what they're doing.
Perhaps kids are bored because scholl is boring. If the school assignment was to find the biggest scam in town and file a lawsuit, way more people would listen.
Part of the problem is also that these courses are devoid of any real informational content. My experience with having been schooled in several countries is that kids -- including 17-year-old highschoolers -- tune in when the substance is there. I can assert with great confidence that the level of content in the average US curriculum is shamefully low. This is true in mathematics, to say nothing of "Life Skills".
While I agree everyone should know those things, everyone also went to math, history, English, and biology yet nobody remembers anything from them either.
None of this content will help if people don't simply learn to appreciate knowledge, and when they do none of the content will matter.
None of this content will help if people don't simply learn to appreciate knowledge, and when they do none of the content will matter.
People remember a great deal from English, History, Biology etc. Anything used regularly like say touch typing sticks around. What they forget is generally unimportant details.
So, most Americans will know the difference between a period and an exclamation mark. That Lincoln was president during the civil war even if they can’t the battles. Mice come from mice not grain. Basically the kind of basic facts that seem inherent until you realize you needed to learn them somewhere.
And of course people who went further into Math, History, etc where building from foundations created in those years.
So, most Americans will know the difference between a period and an exclamation mark. That Lincoln was president during the civil war even if they can’t the battles. Mice come from mice not grain. Basically the kind of basic facts that seem inherent until you realize you needed to learn them somewhere.
And of course people who went further into Math, History, etc where building from foundations created in those years.
A lot of school knowledge is too abstract and removed from life: biology class taught me about cell structure and DNA, not how to do first aid, or the difference between paracetomol and ibuprophere, it doesnt help me choose a health insurance, etc.
People then those same people who supposedly learnt biology become vaccine sceptics: this 'knowledge' is not knowledge that was every used and proved real to them, its just collection of words they remembered and regorgitated in an exam.
People then those same people who supposedly learnt biology become vaccine sceptics: this 'knowledge' is not knowledge that was every used and proved real to them, its just collection of words they remembered and regorgitated in an exam.
There were are ton of things I learned in Psych 101, Phil 101, Econ 101 that all should have been taught in high school. Your list is a great start.
I'd add anger management (though perhaps mental health basics would cover this), practical logical fallacies, sunk costs, and basic law.
I'd add anger management (though perhaps mental health basics would cover this), practical logical fallacies, sunk costs, and basic law.
Every topic added means another must be cut.
What gets cut? P.E? Foreign language? History? Math? Electives? English?
What gets cut? P.E? Foreign language? History? Math? Electives? English?
I would definitely cut PE.
Most of it amounts to moving around for 30 min and you get graded on wether you brought a change of clothes.
Thats not to say PE couldn't be useful. Physical fitness was never my strong suit in highschool and PE did nothing to change that.
After making a good salary in a startup, I worked with a personal trainer and learned about muscle hypertrophy, starting strength and general strategies for conditioning along with diet with particular goals. Maybe if we taught that stuff in PE, it would be worth keeping around.
Most of it amounts to moving around for 30 min and you get graded on wether you brought a change of clothes.
Thats not to say PE couldn't be useful. Physical fitness was never my strong suit in highschool and PE did nothing to change that.
After making a good salary in a startup, I worked with a personal trainer and learned about muscle hypertrophy, starting strength and general strategies for conditioning along with diet with particular goals. Maybe if we taught that stuff in PE, it would be worth keeping around.
My PE class was actually contained a fair amount of that, just wildly out of date now. Just burning off energy/stress is probably a good thing for teenagers though ...
Exercise is good for your brain, cutting PE will make most kids learn less even if the material you learn there isn't valuable.
[deleted]
Cut compulsory foreign languages which for most people is just memorizing lists of data that they forget a month later.
I did not attend a high school, because I went to school in Germany. But in Gymnasium, a rough equivalent to the American high school, we had two compulsory foreign languages. The first one was English, the second one was chosen by you. It was a rare exception that we focused on learning vocabulary. In my first ever English lesson, the teacher entered the room and said "Good morning, my name is Mr. Fleischer." in English. We were shocked, since neither of us did understand a single word. For the first month I wasn't even sure he could speak German at all. Until my graduation, everything, even administrative stuff, jokes, or complaints about homework had to be said in English in English class. It was similar in French class. That is far from "just memorizing lists of data that they forget a month later". Perhaps, the quality of teaching should be improved.
Btw, one of my English teachers, taught us also in Chemistry and did that in English for a year. That was 25 years ago.
Btw, one of my English teachers, taught us also in Chemistry and did that in English for a year. That was 25 years ago.
I did learn to read, write, listen, and speak three foreign languages in high school. Beyond learning vocabulary, there was not much memorizing going on. I still use two of these foreign languages regularly!
I would rather we fix foreign language education rather than just cut it. Besides, why not teach parts of these "life lessons" during foreign language class? Might be interesting to compare home economics in different cultures.
I would rather we fix foreign language education rather than just cut it. Besides, why not teach parts of these "life lessons" during foreign language class? Might be interesting to compare home economics in different cultures.
I also took 3 compulsory foreign language classes and retained maybe 30 words after the exams. I hated it and treated it as a memorization problem. It was a complete waste of my time due to a lack of interest. I don't think you could have fixed it for someone like me. The root problem was my disinterest in learning another language which I don't think is going to change with a different pedagogy. I'm just simply not interested in the prospect of learning that content, and trying to get that content into my brain was a matter of great subjective displeasure.
That's why it should be opt-in. The people that are capable of getting value from it (you) join in and the people guaranteed to get no value due to a lack of interest (me) can do something else.
The same thing shouldn't apply to critical/foundational classes like basic math. But foreign languages aren't that.
That's why it should be opt-in. The people that are capable of getting value from it (you) join in and the people guaranteed to get no value due to a lack of interest (me) can do something else.
The same thing shouldn't apply to critical/foundational classes like basic math. But foreign languages aren't that.
I'd say it shows the weakness of the teaching system, if you can pass by just memorizing. I guess standardized tests are to be blamed for that. In a decent foreign language class, treating it as a memorization excercize should let you fail. And in my experience it did.
I don’t think it’s zero sum, there’s no reason most districts couldn’t add 2-weeks to the school year.
That being said, they fact that reading math scores are so low in many places my pre-supposed “advanced” topics life financial literacy.
That being said, they fact that reading math scores are so low in many places my pre-supposed “advanced” topics life financial literacy.
Adding two weeks to the school year subtracts two weeks from the things kids learn when they're not bored to death and controlled.
That could well be the case - though I think if you looked at most kids, two weeks less of video games could be found in their schedules
Make the school year full time. It would give more time for these classes, make it easier on working parents, and give kids more time to learn.
I would require basic law, accounting, and economics classes.
I would require basic law, accounting, and economics classes.
Maybe? Making good, well rounded, happy humans should be the number one goal. Skipping a bit of everything else working towards that goal wouldn't hurt.
There is definitely some fat to trim. For example, I remember spending almost an entire marking period studying the poems from Edgar Allan Poe. Nothing personal against the guy, but it's largely useless knowledge for the majority of people.
I rebelled internally and hated much of my English courses. “There’s no way the author intended all that secondary meaning.” “I read that whole story and didn’t even find out if the Tiger was behind the door?!” “Who cares about the island kid’s glasses?!”
35 years later, the ability to write English has probably had at least the same amount of positive influence over my career as my ability to write C++ or Javascript. I should probably apologize to my high school English teachers.
35 years later, the ability to write English has probably had at least the same amount of positive influence over my career as my ability to write C++ or Javascript. I should probably apologize to my high school English teachers.
[deleted]
Definitely cut PE; in most primary schools in the US it's just enforced exercise, and there's really nothing educational about it.
I'm torn on foreign language. I think everyone should be bilingual, at least. But how it's taught in US schools is mostly useless. I took Spanish every year from 7th grade through 12th, but my Spanish even just a few years later was conversationally useless. I think kids should be learning a second language pretty much immediately when they start going to school, and there should be an effort to ensure it gets used outside that language class. (Easy if they only teach a single second language, but harder if students/parents get a choice.)
We did have a home economics class at some point in either middle or high school. I don't remember it very well, but I think that could have been a good place to teach some basic financial literacy. What I do remember was a bunch of sewing projects, and while I do think sewing is an essential life skill (I still on occasion hand-sew things), I don't think learning how to sew a stuffed animal is more important than learning how debt works.
I'm torn on foreign language. I think everyone should be bilingual, at least. But how it's taught in US schools is mostly useless. I took Spanish every year from 7th grade through 12th, but my Spanish even just a few years later was conversationally useless. I think kids should be learning a second language pretty much immediately when they start going to school, and there should be an effort to ensure it gets used outside that language class. (Easy if they only teach a single second language, but harder if students/parents get a choice.)
We did have a home economics class at some point in either middle or high school. I don't remember it very well, but I think that could have been a good place to teach some basic financial literacy. What I do remember was a bunch of sewing projects, and while I do think sewing is an essential life skill (I still on occasion hand-sew things), I don't think learning how to sew a stuffed animal is more important than learning how debt works.
Excellent list from both of you. I'd add basic statistical reasoning to it.
Yes! The inability to properly quantify risk has literally killed thousands of Americans and Canadians this past year.
People have been beating this drum for decades. The last time it got big, my state (Illinois) began requiring such a class. It's been required since and people think it doesn't exist. I wonder if such courses have quantum properties of some sort.
The course teaches you things like paying your taxes, writing a check, how to vote, etc.
People still complain it doesn't exist. I still have old classmates that make this same "They didn't teach practical skills in school!" posts. They even took the damn class with me. It's maddening.
The course teaches you things like paying your taxes, writing a check, how to vote, etc.
People still complain it doesn't exist. I still have old classmates that make this same "They didn't teach practical skills in school!" posts. They even took the damn class with me. It's maddening.
I agree. Schools are not teaching actionable kills. Just memorize and regurgitate type stuff. no wonder so many kids find it boring. Little to no applicability to real world or life.
> as it would eventually destroy whole industries and populist voter bases.
That is absolutely correct!
Alas, let's look at the bright side, learning all those topics you mentioned in you "Life School" are only one google search away, free (monetarily); they only require an investment of time.
People learn complex things like playing Fornite and Minecraft or understanding Baseball/Football and other sports the same way.
Maybe it's a matter of twisted modern darwinism?
That is absolutely correct!
Alas, let's look at the bright side, learning all those topics you mentioned in you "Life School" are only one google search away, free (monetarily); they only require an investment of time.
People learn complex things like playing Fornite and Minecraft or understanding Baseball/Football and other sports the same way.
Maybe it's a matter of twisted modern darwinism?
What makes you think high school students will listen?
This is my issue with these topics. Like most classes kids will do the bare minimum to pass and then forget it all.
This is my issue with these topics. Like most classes kids will do the bare minimum to pass and then forget it all.
In 2003 in my high school social studies teacher set aside time each class to do this and tied to world events.
He was getting up there in age and had horrible skin cancer but still literally sprinted down the halls after truants.
He is my all-time favorite teacher, although I actually don't remember that many life skills from him :)
He was getting up there in age and had horrible skin cancer but still literally sprinted down the halls after truants.
He is my all-time favorite teacher, although I actually don't remember that many life skills from him :)
>I smell a non-profit I should do one day…
Do It. I love this idea.
My question is something like, would a non-profit be considered as start up? Think of funding and long term sustainability of an idea.
Do It. I love this idea.
My question is something like, would a non-profit be considered as start up? Think of funding and long term sustainability of an idea.
You don't really need to teach so many things. The only skill one needs to master them all is critical thinking.
To teach critical thinking to the students, you need teachers who are critical thinkers.
It does not matter if you are in USA or Zimbabwe, one thing is common everywhere. Smart people who can think critically are not encouraged or incentivized enough to take up teaching as a profession. As a result we end up with this mess of education systems everywhere. It will probably take some generational changes or visionary political leadership to change this.
To teach critical thinking to the students, you need teachers who are critical thinkers.
It does not matter if you are in USA or Zimbabwe, one thing is common everywhere. Smart people who can think critically are not encouraged or incentivized enough to take up teaching as a profession. As a result we end up with this mess of education systems everywhere. It will probably take some generational changes or visionary political leadership to change this.
I'm torn on this. Do people really need to be spoonfed all information?
Were you born knowing how to draft contract, sue your employer and calculate equated monthly installments on a loan?
No but I can navigate my world and use available resources to figure it out.
It is a fallacy to think it is enough to know how to research stuff. In order to ask helpful questions --- in order to think --- you need facts that you know already. Additionally, you have to train your brain, similar to a muscle in order to use it effectively. E.g. a novice in chess would represent some of the figure on the field in his head at one point in time. Every figure would fill one "slot" of his working memory, whereas a more advanced player might represent certain configurations of figures and their positions in one slot. Even more advanced players might hold trees of possible futures of the current field in one slot. In order to acquire that ability, you have to train your brain and fill it with some knowledge, be it personal experience or theoretical knowledge. Being allowed to Google during a Chess championship won't cut it.
And unless you are reading the original legal texts passed by parliament or filing the lawsuit yourself, someone is 'spoonfeeding' you
Secondly, I can't read a health insurance policy and fully understand all of it's implications, and I doubt you can either unless you have some spesific traiing in the matter
Secondly, I can't read a health insurance policy and fully understand all of it's implications, and I doubt you can either unless you have some spesific traiing in the matter
> media competency
What does this mean, exactly?
What does this mean, exactly?
It bothers me that so many people use the fact that something wasn’t taught in school as an excuse for not knowing it, especially something as obviously necessary as personal finance.
I was dumb in college and graduated with about $4k in credit card debt. It didn’t take a classroom lecture to realize that spending more money than I earned was not a sustainable practice. It’s also not that hard to keep track of how much you spend and make sure it’s less than how much you make.
For almost anything personal finance related there is free information available all over the Internet if you care to spend a couple minutes googling for it.
Likewise with taxes, if you have a regular W2 job, taxes are not hard, just read and follow the instructions. It doesn’t help that people keep repeating the dumb meme that if you make a typo on your tax return the IRS will immediately throw you in jail. They won’t, they just send a letter telling you they corrected it for you (guess how I know).
I was dumb in college and graduated with about $4k in credit card debt. It didn’t take a classroom lecture to realize that spending more money than I earned was not a sustainable practice. It’s also not that hard to keep track of how much you spend and make sure it’s less than how much you make.
For almost anything personal finance related there is free information available all over the Internet if you care to spend a couple minutes googling for it.
Likewise with taxes, if you have a regular W2 job, taxes are not hard, just read and follow the instructions. It doesn’t help that people keep repeating the dumb meme that if you make a typo on your tax return the IRS will immediately throw you in jail. They won’t, they just send a letter telling you they corrected it for you (guess how I know).
So, in general I definitely agree.
But it’s also important to recognize that it’s difficult to know what you don’t know.
My first year in college I was placed into “math in the real world”—the class for kids that can’t even cut it in a 100-level math course.
In of the first lessons the professor asked us how we might purchase something we don’t have money for. No exaggeration: I was the only person that suggested saving up for the item.
Every single person in that class was competent enough to understand basic financial literacy. But somehow they made it 18-20 years before learning about savings, compound interest, etc.
It gets more difficult, too. I bet most people don’t know that overdrawing and other “bad” behavior can lead to you getting blackballed in Chex, making it really difficult to open bank accounts elsewhere. How do you even search for that?
I’ve had to stop and remind people that when you transfer money from a tax-advantaged retirement account you need to make sure to transfer it directly—withdrawing it into your bank account can cause a taxable event.
Stuff like that is easy to look up. People should look it up. But how do you know you need to look it up?
But it’s also important to recognize that it’s difficult to know what you don’t know.
My first year in college I was placed into “math in the real world”—the class for kids that can’t even cut it in a 100-level math course.
In of the first lessons the professor asked us how we might purchase something we don’t have money for. No exaggeration: I was the only person that suggested saving up for the item.
Every single person in that class was competent enough to understand basic financial literacy. But somehow they made it 18-20 years before learning about savings, compound interest, etc.
It gets more difficult, too. I bet most people don’t know that overdrawing and other “bad” behavior can lead to you getting blackballed in Chex, making it really difficult to open bank accounts elsewhere. How do you even search for that?
I’ve had to stop and remind people that when you transfer money from a tax-advantaged retirement account you need to make sure to transfer it directly—withdrawing it into your bank account can cause a taxable event.
Stuff like that is easy to look up. People should look it up. But how do you know you need to look it up?
> Stuff like that is easy to look up. People should look it up. But how do you know you need to look it up?
I kinda agree. For myself, I have formed a habit of searching for "${NEW_THING_I_DONT_KNOW_MUCH_ABOUT} downsides/problems" - helps with atleast the big-ticket pitfalls.
I kinda agree. For myself, I have formed a habit of searching for "${NEW_THING_I_DONT_KNOW_MUCH_ABOUT} downsides/problems" - helps with atleast the big-ticket pitfalls.
Financial health is a lot like general physical health, it's truly simple. Don't spend more than you make, don't eat more than you need. They're also difficult, as evidenced by how many fail.
There are deep systemic issues that stack the deck against the working class financially. There are also plenty of people that make very detrimental decisions when it comes to money and dig themselves into a deep hole, even without any obvious cause.
Both are problems that need to be addressed. The presence of one doesn't invalidate the other, and the solving of one doesn't solve the other. Normally these discussions are people talking past each other as they haggle over the proportion of blame to assign to the individual or system. I say address both simultaneously and let both sides think they're right.
There are deep systemic issues that stack the deck against the working class financially. There are also plenty of people that make very detrimental decisions when it comes to money and dig themselves into a deep hole, even without any obvious cause.
Both are problems that need to be addressed. The presence of one doesn't invalidate the other, and the solving of one doesn't solve the other. Normally these discussions are people talking past each other as they haggle over the proportion of blame to assign to the individual or system. I say address both simultaneously and let both sides think they're right.
>Don't spend more than you make
I'm not trying to crash the party here but globally this is impossible. If someone spends less than they make, someone else spends more than they make. If everyone tries to spend less then everyone will be worse off.
Thus we need an institution that can run a deficit for all eternity. Call it "government".
There are other ways but right now that is just how the current system was built. There is no need to feel sad or worry. I personally worry more about idiots who want to keep the current system and avoid government deficits, now that is truly horrifying.
I'm not trying to crash the party here but globally this is impossible. If someone spends less than they make, someone else spends more than they make. If everyone tries to spend less then everyone will be worse off.
Thus we need an institution that can run a deficit for all eternity. Call it "government".
There are other ways but right now that is just how the current system was built. There is no need to feel sad or worry. I personally worry more about idiots who want to keep the current system and avoid government deficits, now that is truly horrifying.
How is this anything more than passing the ball? Value is finite and doesn’t change so all this can mean is tax the rich to give to the poor. Which still means you have the majority of people spending less than they make because again, value is finite.
Further what system would you replace it with that somehow defied the finite value law? What your suggesting is that $1, or any countries currency, doesn’t represent any value at all and is just arbitrarily assigned a value.
Further what system would you replace it with that somehow defied the finite value law? What your suggesting is that $1, or any countries currency, doesn’t represent any value at all and is just arbitrarily assigned a value.
Yep. They teach maths, they teach reading. That should be enough to do taxes.
Maybe taxes ought to be simpler, rather than require hours upon hours of education.
I agree, let’s make it a flat sales tax and do away with income tax. It can even be 50% and scale with the category of item! Entertainment items taxed at 50% and food and some clothing at 0%
This is great news. I’ve long thought that high school students would be better served if they substituted statistics and finance for pre-calculus and calculus. Most people gain very little utility from Calculus, but a better understanding of Finance and Statistics, especially interest rates, amortization, time value of money, and probabilities.
The lack of understanding of basic finance and statistics is crippling for many people.
I know fairly smart people who understand calculus but just cannot accept that there is a problem with paying interest on all of their purchases.
They simply do not understand that eliminating high interest debt as soon as possible (or never acquiring it in the first place) is essential to ever having financial security.
Honestly it sometimes feels like the normalizing of financial illiteracy is intentional, although I'm willing to accept that the lenders of high interest debt are just taking advantage of the situation they've found.
I know fairly smart people who understand calculus but just cannot accept that there is a problem with paying interest on all of their purchases.
They simply do not understand that eliminating high interest debt as soon as possible (or never acquiring it in the first place) is essential to ever having financial security.
Honestly it sometimes feels like the normalizing of financial illiteracy is intentional, although I'm willing to accept that the lenders of high interest debt are just taking advantage of the situation they've found.
> I know fairly smart people who understand calculus but just cannot accept that there is a problem with paying interest on all of their purchases.
I do not think this is a problem with education. It sounds like they understand, they just do not care. I think that is a different (harder) problem.
You're unhappy that people do not believe it is beneficial to be debt-free. As you note - there are many groups who benefit (profit) from this kind of spend-spend-spend consumption culture.
Frankly, I am astounded that COVID did not bring about a massive economic collapse that would have driven the point about financial security home in a dreadful way. I'm grateful it didn't, though.
I do not think this is a problem with education. It sounds like they understand, they just do not care. I think that is a different (harder) problem.
You're unhappy that people do not believe it is beneficial to be debt-free. As you note - there are many groups who benefit (profit) from this kind of spend-spend-spend consumption culture.
Frankly, I am astounded that COVID did not bring about a massive economic collapse that would have driven the point about financial security home in a dreadful way. I'm grateful it didn't, though.
Well there’s a difference between high interest debt and just debt. And agreed don’t get into high interest debt to begin with and pay it off ASAP if you do anyway. But avoiding interest all together is a massive oversimplification and shows you don’t understand that cash in hand (and the ability to earn more from it) can be better than a low interest loan. If you make 10% from cash on hand and have 5% loans then you got free money and 5% gains.
I taught middle and high school math for many years, and I always offered financial-focused projects as an option for students. I also used financial examples on a regular basis, just to keep a healthy, rational conversation about financial literacy going. The two most important topics over the years seemed to be loan analysis and understanding taxes.
To understand loans, I taught students how to determine the monthly payment for a loan using a blank spreadsheet. For students who were intimidated by spreadsheets, we'd start the process on a whiteboard. Just a simple spreadsheet with columns like month, current principal, payment, towards interest, towards principal, new principal. Then guess-and-check to see what the payment needed to be in order to pay off the loan in a specified time period.
That was great, because it let everyone see how loan payments are calculated in the first place. Then it let curious students explore the impact of paying above the minimum, making lump sum payments at various intervals, different interest rates, initial no-payment periods, and other loan "features". We also looked at cumulative interest and other long-term aspects of a loan. Students could do their own projects about car loans, home loans, business loans, and more. Every time I've taken out a loan in my life, I've done this myself, and it's made the experience better every time. Just doing this once lets you talk to a loan officer on a much more eye-to-eye level. This is education as consumer advocacy, fighting back against predatory practices one class at a time.
For taxes, I just had students either bring in their own pay stubs or W2s, or work with a sample set related to a field they were interested in working in. Then I had them fill out a 1040 by hand. They had to start out with the simplest 1040, and they could choose to try a more complex version after that. I had them repeat the process for several income levels; most students had no idea what a "tax bracket" actually is. I'd start with a question like "You're making $__k/yr, and you're offered a $1k raise. The raise will bump you into the next tax bracket. Should you accept the raise?" Many students said no, because they had no concept of incremental tax rates.
You have to present this material carefully. If you tell a whole class of math students, "Okay, everyone's learning to analyze loans this week!" they'll hate it. If you say, "We're learning to analyze numerical patterns, and one of the patterns you can analyze is how banks determine the monthly payment for the car or house loan you might want in a few years", they'll jump on it.
To understand loans, I taught students how to determine the monthly payment for a loan using a blank spreadsheet. For students who were intimidated by spreadsheets, we'd start the process on a whiteboard. Just a simple spreadsheet with columns like month, current principal, payment, towards interest, towards principal, new principal. Then guess-and-check to see what the payment needed to be in order to pay off the loan in a specified time period.
That was great, because it let everyone see how loan payments are calculated in the first place. Then it let curious students explore the impact of paying above the minimum, making lump sum payments at various intervals, different interest rates, initial no-payment periods, and other loan "features". We also looked at cumulative interest and other long-term aspects of a loan. Students could do their own projects about car loans, home loans, business loans, and more. Every time I've taken out a loan in my life, I've done this myself, and it's made the experience better every time. Just doing this once lets you talk to a loan officer on a much more eye-to-eye level. This is education as consumer advocacy, fighting back against predatory practices one class at a time.
For taxes, I just had students either bring in their own pay stubs or W2s, or work with a sample set related to a field they were interested in working in. Then I had them fill out a 1040 by hand. They had to start out with the simplest 1040, and they could choose to try a more complex version after that. I had them repeat the process for several income levels; most students had no idea what a "tax bracket" actually is. I'd start with a question like "You're making $__k/yr, and you're offered a $1k raise. The raise will bump you into the next tax bracket. Should you accept the raise?" Many students said no, because they had no concept of incremental tax rates.
You have to present this material carefully. If you tell a whole class of math students, "Okay, everyone's learning to analyze loans this week!" they'll hate it. If you say, "We're learning to analyze numerical patterns, and one of the patterns you can analyze is how banks determine the monthly payment for the car or house loan you might want in a few years", they'll jump on it.
For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket.
This then explains why when you get a bonus it is taxed at 22% as those balls go in the last bucket with room in it (or 24%..., whatever the highest marginal tax rate someone is in).
This then explains why when you get a bonus it is taxed at 22% as those balls go in the last bucket with room in it (or 24%..., whatever the highest marginal tax rate someone is in).
>For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket.
Thank you, this looks like a really clear and concise way of explaining the topic! I've been looking for a better way to explain it, particularly the bonuses.
Thank you, this looks like a really clear and concise way of explaining the topic! I've been looking for a better way to explain it, particularly the bonuses.
Well if you had to have one or the other, I think you are actually right. Prob and stats are essential in any discussion of real-world data, which comes up pretty much every day. They are also the best way into dealing with something inherently messy, which data pretty much is all the time. It's a good way to talk about what you think is true and why, critical to decision making.
Calculus on the other hand is bit too beautiful. At high school level at least, you get all these smooth curves, everything has a nice closed form answer, and you start to think that maybe these beautiful shapes describe the universe. It's actually not that easy to do, it just happens that we found some examples where it works quite well, and they are just the kinds of things we teach in physics in those same years.
When we then get to an economics class, it unravels. There's a whole menagerie of calculus assumptions that creep into the minds of credulous students. Lets assume Cobb-Douglass production function. Let's say the utility must be this shape. Oh look at what beautiful conclusions we get.
Calculus on the other hand is bit too beautiful. At high school level at least, you get all these smooth curves, everything has a nice closed form answer, and you start to think that maybe these beautiful shapes describe the universe. It's actually not that easy to do, it just happens that we found some examples where it works quite well, and they are just the kinds of things we teach in physics in those same years.
When we then get to an economics class, it unravels. There's a whole menagerie of calculus assumptions that creep into the minds of credulous students. Lets assume Cobb-Douglass production function. Let's say the utility must be this shape. Oh look at what beautiful conclusions we get.
Even algebra is of limited to no use for most people, and I support skipping it for something more useful to more people.
"How long do I need to keep money in an account for it to double if it grows at 8% a year" is an algebra problem. I suspect they're more common than you expect, you're just used to it.
That might have been a useful project back when we actually had interest rates :)
You still pay a premium because of default rates. The better your credit score the lower the predicted default rate and the lower the interest rate.
Low interest rates on loans are actually a pretty bad idea to stimulate an economy because the majority of people do not have access to them. If you gave people a $1000 coupon that lets them borrow $1000 at 0% interest regardless of the default rate you are going to see a bigger impact on inflation rates. The benefit is that people only take the loan if they actually spend it, therefore this is superior to helicopter money. If they default that's fine because then it turns into helicopter money which is still better than more loans for houses.
Low interest rates on loans are actually a pretty bad idea to stimulate an economy because the majority of people do not have access to them. If you gave people a $1000 coupon that lets them borrow $1000 at 0% interest regardless of the default rate you are going to see a bigger impact on inflation rates. The benefit is that people only take the loan if they actually spend it, therefore this is superior to helicopter money. If they default that's fine because then it turns into helicopter money which is still better than more loans for houses.
I don't know if the current algebra curriculum is teaching people how to solve real problems though.
Sounds like a road to more flat earthers and anti-vaxxers.
The more practical math and the less abstraction the less critical thinking.
The more practical math and the less abstraction the less critical thinking.
I'm not convinced that most of my fellow "spheroid earthers" reached that conclusion through critical thinking - we learned from authority figures. In my science class we explored some arguments for a round earth, but if I recall they were trigonometry based and didn't involve calculus at all. I don't see any connection between calculus and "critical thinking".
I agree that this would be helpful but people are lazy and don't really care. They know the car costs $60K but they only ask what the monthly payment is. We really need a strong CPB to get rid of all the rent seeking and exploitative business practices that are all the "profit" centers for so many businesses.
> Most people gain very little utility from Calculus
Because the purpose of high school and basic university mathematics is to make people smarter. Algebra or calculus deal with abstractions and concepts that are hard to master. They are like lifting heavy weights. A course on statistics and finance is easier and hence like lifting light weights.
This has independent of the fact that high school teachers and underpaid, overworked, undertrained, and are forced to teach to the test, and so unable to really teach mathematics as they students deserved
Because the purpose of high school and basic university mathematics is to make people smarter. Algebra or calculus deal with abstractions and concepts that are hard to master. They are like lifting heavy weights. A course on statistics and finance is easier and hence like lifting light weights.
This has independent of the fact that high school teachers and underpaid, overworked, undertrained, and are forced to teach to the test, and so unable to really teach mathematics as they students deserved
I love me some Calculus, but the reason it is required is that 60 years ago we were worried that the Soviets were outpacing us in rocket design, which was seen as a major threat to our national security. Calculus is pretty darn useful for building rockets.
Is this just rebranding of the home economics class everyone took 20+ years ago in junior/senior high? They could replace "how to balance your cheque book" with reviewing online statements and keep the rest of the curriculum the same IIRC...
I feel like we also need to teach kids how the IRS works and what withholding, tax returns, credits, and deductions actually mean. Balancing a checkbook is trivial compared to understanding what needs to be filed and when.
Yes, none of my high school graduate children really understand any of this. When they got their first jobs I made them do their tax return by hand on paper. For so many people, "doing your taxes" is when you give your paperwork to H&R Block and you get a refund sometime in the first part of the year. They have no concept that the "refund" was their own money to begin with, and the fact that they are getting it back means that they have been giving the government an interest free loan for the last year.
It's a necessary evil because enforcing taxation at the employer is easier than at the employee. We would need invasive banks for that.
I actually gently disagree. There is a lot of statements that education doesn't teach practical skills, but i think that's a mistake.
We don't teach specifics like 'how to do your taxes' or different retirement account types. But we teach general skills that enable those.
And frankly, those change too often (both time and jurisdiction) and are far too broad to be very useful.
When English teachers discuss Shakespeare, or history teachers discuss analyzing documents: they are generally not expecting students to have to read those particulars, but instead aiming for attainment of a more general skill (literacy, analysis, veracity).
Basically, I think it's better to just teach math and literacy in general. Then if they want to know how APR is calculated, they will have the ability to research it.
School cannot possibly teach everything one could want or need to know in life. It's more about setting a foundation.
We don't teach specifics like 'how to do your taxes' or different retirement account types. But we teach general skills that enable those.
And frankly, those change too often (both time and jurisdiction) and are far too broad to be very useful.
When English teachers discuss Shakespeare, or history teachers discuss analyzing documents: they are generally not expecting students to have to read those particulars, but instead aiming for attainment of a more general skill (literacy, analysis, veracity).
Basically, I think it's better to just teach math and literacy in general. Then if they want to know how APR is calculated, they will have the ability to research it.
School cannot possibly teach everything one could want or need to know in life. It's more about setting a foundation.
As far as teaching about taxes goes, I think the best thing to do would be to broadly cover what the taxation process is. Explain what the income tax is, why FICA is split between you and your employer, what capital gains taxes are, etc. I know the specifics of the tax code are fickle but the core principles of credits, deductions, withholding, refunds, etc. have been there for decades and are likely to remain stable. But to your point, we don't need to test students on their ability to fill out a 1040 correctly, just what it's used for.
I think that was all covered when I went to high school in the late 90's. I'm not sure if that was the norm everywhere in the U.S. at that time or if it was just that particular teacher thought it was important that we know about that stuff (and if so I think she was right).
ya, compound interest, long term returns of the stock market, 401k fees, etc
a problem with this is that you could eventually get to the truth that the best way to increase your wealth is to get a higher salary.
Not necessarily IMO. Wealth is a function of assets, liabilities, income, and other factors. There are plenty of people with high salaries who I wouldn’t consider wealthy by any stretch.
ya, I think it is a combo of salary + behaviours that build wealth, combined with having some idea about what you want from your brief time on this planet.
Is this just rebranding of the home economics class everyone took 20+ years ago in junior/senior high?
In my area (Fairfax County, VA), home ec class in the 90s was cooking and sewing. The "economics" part disappeared from the curriculum sometime before I entered high school.
Also, many college-bound students weren't allowed to take the class. It was a known waste of time - counselors actively pushed students towards more useful courses. In my case, that was a year of Latin as a senior (on top of 4 years of French).
An real home economics class - with personal finance as a primary focus - would be very useful, IMO. I'm sure we covered interest rates somewhere in high school math, but it was purely academic - not taught in terms of useful life skill.
In my area (Fairfax County, VA), home ec class in the 90s was cooking and sewing. The "economics" part disappeared from the curriculum sometime before I entered high school.
Also, many college-bound students weren't allowed to take the class. It was a known waste of time - counselors actively pushed students towards more useful courses. In my case, that was a year of Latin as a senior (on top of 4 years of French).
An real home economics class - with personal finance as a primary focus - would be very useful, IMO. I'm sure we covered interest rates somewhere in high school math, but it was purely academic - not taught in terms of useful life skill.
[deleted]
> An real home economics class - with personal finance as a primary focus
Home economics has always included a variety of household skills, and was never limited to just personal finance.
Home economics has always included a variety of household skills, and was never limited to just personal finance.
However, in some cases, it has been excluded altogether. Such as when I took in it the 90s. My class was roughly about sewing and kitchen skills.
Also Fairfax county, also 90s; the only exposure I got to finances in school was in 8th grade Civics class. We spent maybe a week on it.
all i had was 6 weeks in middle school, which covered cooking and... embroidery? i think?
there was a 7 week segment some time in high school that discussed economics, but it was a sort of math-free intro to macroencomics, as i recall. ("here's what the fed does", "the stock market exists", etc)
there was a 7 week segment some time in high school that discussed economics, but it was a sort of math-free intro to macroencomics, as i recall. ("here's what the fed does", "the stock market exists", etc)
Home economics was the most important class I had, I wish I'd paid more attention and treated it less a blowoff. Cooking, budgeting, nutrition are all skills that pay off nearly every single day of my life, not something I can say for my maths, physics and chemistry classes. Would have been even better if I took things seriously and learned to sew.
Unfortunately the financial literacy we learned in home economics was limited, mostly around budgeting. We had some other classes that covered other finance/life aspects more but they were non-mandatory and post when many people left school in those days, probably would have been better off incorporated into home economics.
Unfortunately the financial literacy we learned in home economics was limited, mostly around budgeting. We had some other classes that covered other finance/life aspects more but they were non-mandatory and post when many people left school in those days, probably would have been better off incorporated into home economics.
Home ec for me was cooking, sewing, and baking. It felt like the most bullshit class ever.
An actual home economics course - one that covers compound interest, net present value, discounted cash flow, different asset classes, efficient market hypothesis, supply & demand, and reading financial statements - would be hugely valuable to kids.
An actual home economics course - one that covers compound interest, net present value, discounted cash flow, different asset classes, efficient market hypothesis, supply & demand, and reading financial statements - would be hugely valuable to kids.
I actually think they need to bring back home economics separate and distinct from financial literacy.
(Australian here) I took Home Economics and it was 80% cooking and 20% health and nutrition. Nothing about personal finance or money in there. That was in... 2001-2002ish.
Sewing? I went through home ec around 1991-2 in Australia and we hand-sewed a wallet-kinda thing and also machine-sewed our own hoodie. Tech studies was wood work, plastics and metal work.
Has there been any data to show that financial literacy education improves results? My understanding was that starting with capital is much more important to financial success than coursework.
If you research this I think you'll find that starting with capital correlates strongly with having a financially literate family who can provide useful guidance.
Giving capital to people who are not financially literate will likely end up with that capital quickly moving out of their hands to people who are financially literate.
Giving capital to people who are not financially literate will likely end up with that capital quickly moving out of their hands to people who are financially literate.
Financial literacy is useless if you can't teach folks how to survive when there isn't quite enough money. Teaching how to invest is useless if the person remains poor for the next 10-20 years, and if trends stay the same, they probably will be.
Financial literacy should include this stuff, plus how to get help if you can't make rent, are going hungry, or are homeless.
Financial literacy should include this stuff, plus how to get help if you can't make rent, are going hungry, or are homeless.
“ when there isn't quite enough money”
But is it obvious there isn't enough money? My in-laws, immigrants with almost no skills and mext to zero English, work at Walmart. Their income sucks (<40k combined [1]), and they have zero financial skills (they grew up in communism).
The one thing they know, however, is that my wife is very sharp. therefore, they have given her full access to their all their accounts.
Result?
They’re contributing to a 401k despite always blowing money on flashy iPhones (they’re fairly irresponsible).
They also bought a modest house (ill admit we did lend them the money for a 10% down, which they've paid back) since rent had become more expensive than a mortgage.
They’ve been in the US for just five years and, with very little material help from us, have a reasonable shot at retirement income [2].
The big difference with many others is that my wife took a chunk of their financial autonomy with automatic withdrawals so they wont blow too much money (lottery tickets, booze, fancier iPhones, etc)
[1] Note, they don't have to take care of anyone but themselves with <40k
[2] retirement means selling the house and coming to live with us as soon as either of them can no longer work.
But is it obvious there isn't enough money? My in-laws, immigrants with almost no skills and mext to zero English, work at Walmart. Their income sucks (<40k combined [1]), and they have zero financial skills (they grew up in communism).
The one thing they know, however, is that my wife is very sharp. therefore, they have given her full access to their all their accounts.
Result?
They’re contributing to a 401k despite always blowing money on flashy iPhones (they’re fairly irresponsible).
They also bought a modest house (ill admit we did lend them the money for a 10% down, which they've paid back) since rent had become more expensive than a mortgage.
They’ve been in the US for just five years and, with very little material help from us, have a reasonable shot at retirement income [2].
The big difference with many others is that my wife took a chunk of their financial autonomy with automatic withdrawals so they wont blow too much money (lottery tickets, booze, fancier iPhones, etc)
[1] Note, they don't have to take care of anyone but themselves with <40k
[2] retirement means selling the house and coming to live with us as soon as either of them can no longer work.
Moreover - as you go up the capital spectrum you see an increasing emphasis on teaching financial literacy to children (just look at the marketing materials of private banks an wealth managers purporting to help educate the next generation)
The bankruptcy rates of lottery winners seem to suggest that knowing how to have money is important to retaining money.
Because as we all know, having a substandard "financial literacy" class when you are 15 will help you after you win the lottery at 45, after having years of not practicing any of it and not keeping up-to-date on things.
Better than nothing?
I still remember my grade 10 business teacher (mandatory class) urging us to start contributing to our retirement and showing us the graphs of how impactful it would be to start early?
I still remember my grade 10 business teacher (mandatory class) urging us to start contributing to our retirement and showing us the graphs of how impactful it would be to start early?
I remember that the social studies teacher brought in a friend to "help" with the financial literacy portion, in 8th grade.
We got told to bring our parents into a car dealership for extra credit.
And sure, that's all well and good. Did they also teach you how to contribute while you are low income or if you wound up not actually working because you were taking care of a spouse, child, or parent? Probably not. I'm gonna guess that statistically, you are more likely to be the poor person that can't save.
We got told to bring our parents into a car dealership for extra credit.
And sure, that's all well and good. Did they also teach you how to contribute while you are low income or if you wound up not actually working because you were taking care of a spouse, child, or parent? Probably not. I'm gonna guess that statistically, you are more likely to be the poor person that can't save.
Rate of return trumps initial capital for any long-term horizon. Do the math of that:
$100 initial capital invested at 50% annual returns becomes $330K after 20 years. This is like a successful startup on its growth curve, or some of the very best hedge funds (eg. Medallion). It's less than most cryptocurrencies (eg. Bitcoin has returned about 70% annually over the last 7 years).
$10K at 20% annual returns becomes $383K after 20 years. This would be a very good active investor or someone who hits a hot company. Most FAANG stocks have returned about 25% over the past 10 years.
$100K at 7% annual returns becomes $386K after 20 years. This is a typical index fund return.
$250K at 2% annual returns becomes $371K after 20 years. This is a typical high-yield savings account return.
$1M when you lose 5%/year becomes $358K after 20 years. This is typical of somebody who holds mortgages or student debt where their asset value & income isn't increasing, or someone who has credit card debt equal to a quarter of their net worth.
Most people underestimate the power of compound interest and exponential growth, which is one of the things that a financial literacy course really needs to teach.
$100 initial capital invested at 50% annual returns becomes $330K after 20 years. This is like a successful startup on its growth curve, or some of the very best hedge funds (eg. Medallion). It's less than most cryptocurrencies (eg. Bitcoin has returned about 70% annually over the last 7 years).
$10K at 20% annual returns becomes $383K after 20 years. This would be a very good active investor or someone who hits a hot company. Most FAANG stocks have returned about 25% over the past 10 years.
$100K at 7% annual returns becomes $386K after 20 years. This is a typical index fund return.
$250K at 2% annual returns becomes $371K after 20 years. This is a typical high-yield savings account return.
$1M when you lose 5%/year becomes $358K after 20 years. This is typical of somebody who holds mortgages or student debt where their asset value & income isn't increasing, or someone who has credit card debt equal to a quarter of their net worth.
Most people underestimate the power of compound interest and exponential growth, which is one of the things that a financial literacy course really needs to teach.
> holds mortgages or student debt where their asset value & income isn't increasing
This is generally uncommon, at least for mortgage debt. If you take care of your house, it usually is an appreciating asset, and makes the debt financing worth doing.
> or someone who has credit card debt
... or a car loan. Very common. Almost nothing that people pay for with consumer credit is an appreciating asset. Though of the two, perhaps a car loan is justifiable if it enables you to get a (better) job and earn more money, even if the asset itself depreciates rapidly.
This is generally uncommon, at least for mortgage debt. If you take care of your house, it usually is an appreciating asset, and makes the debt financing worth doing.
> or someone who has credit card debt
... or a car loan. Very common. Almost nothing that people pay for with consumer credit is an appreciating asset. Though of the two, perhaps a car loan is justifiable if it enables you to get a (better) job and earn more money, even if the asset itself depreciates rapidly.
For a real education in how things work, try running a small hotel:
"In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn's 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender. Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities."
"In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn's 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender. Today we are much closer to a general acknowledgment that government must encourage business to expand and grow. Bill Clinton, Paul Tsongas, Bob Kerrey and others have, I believe, changed the debate of our party. We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities."
-- George McGovern
The thing that i don't understand is how can people that live in the USA accumulate so much debt?
As a 24yo European I never had more than 5k € of debt at any point in my life.
As a 24yo European I never had more than 5k € of debt at any point in my life.
Interest rates being held so low for so long disadvantages the working class. It may look like you're paying fixed "prices" for things, but that's just a cover over what always comes down to a bidding scheme. Sometimes that's even directly visible, like when buying a home. Since borrowing money is so cheap. you end up in bidding competition with people who took out the cheap loans, meaning you either have to come up with more money yourself through other means, or compete with them by taking out loans yourself. The worse off you are, the more likely you are to end up doing the latter.
The end result is the entire working class is enmeshed in debt all the time just to stay even with where they would have been if the interest rates weren't so low.
It's astonishing how effective the upper class was at coming up with this policy to endebtify the entire middle and lower class without ever once talking with each other about how to do this or coordinating any actions to produce this result. It just sorta happened. Neat for them.
The end result is the entire working class is enmeshed in debt all the time just to stay even with where they would have been if the interest rates weren't so low.
It's astonishing how effective the upper class was at coming up with this policy to endebtify the entire middle and lower class without ever once talking with each other about how to do this or coordinating any actions to produce this result. It just sorta happened. Neat for them.
Low interest rate are not the problem here.
Household debt is overwhelmingly about home ownership, first of all which affects richer working people. Housing prices mainly have to do with housing scarcity in good areas, which is a density problem.
Workers have been getting fucked, but blaming interest rates is simplistic and counterproductive as the ability to do more fiscal stimulus as aided by low interest rates would be in their favor.
Household debt is overwhelmingly about home ownership, first of all which affects richer working people. Housing prices mainly have to do with housing scarcity in good areas, which is a density problem.
Workers have been getting fucked, but blaming interest rates is simplistic and counterproductive as the ability to do more fiscal stimulus as aided by low interest rates would be in their favor.
>> Low interest rate are not the problem here.
No, but they are definitely A problem.
Housing prices in a given market vary inversely with interest rates. Sure, scarcity has an effect which is why I said "in a given market". When someone goes to a bank looking for a home load, the first thing they are is what your income and expenses are. From there, they figure out how high your monthly payment can be, and from there using the current interest rates they calculate how much you can borrow. Everyone - sellers, agents, banks - pressure you to spend as much as possible, and one average they succeed. That means lower interest rates will enable you to pay more at the same monthly payment. In other words, the buyer will have roughly the same monthly payment regardless of interest rates. Those rates will determine how much money goes to the seller vs the bank over 15 or 30 years.
Low interest rates cause artificially high prices which don't benefit society, just the sellers. They also lead to banks not paying interest on savings, which discourages savings. They also encourage all sorts of high prices. The current cost of a college degree is due to government guarantees on student loans, which largely didn't exist when I got mine (at a much lower price even adjusted for inflation).
And finally, something I think is true but haven't worked out all the math. It's not lower interest rates that stimulate the economy, but the act of lowering them. If we were at a steady state, reducing rates by a fixed amount and keeping things steady should produce a short-term (perhaps a few years long) spike in GDP, after which things will return to an equilibrium possibly lower than before the rate decrease (or the same or slightly higher I don't know) but less than the short term bump. The opposite is also true, raising rates will cause problems so much be done very slowly. The Fed has the US economy backed into a corner of sorts. The only way out seems to be to ignite a lot of inflation and raise rates slowly so as not to cause another collapse like 2007 (which was triggered by an abrupt rate increase).
No, but they are definitely A problem.
Housing prices in a given market vary inversely with interest rates. Sure, scarcity has an effect which is why I said "in a given market". When someone goes to a bank looking for a home load, the first thing they are is what your income and expenses are. From there, they figure out how high your monthly payment can be, and from there using the current interest rates they calculate how much you can borrow. Everyone - sellers, agents, banks - pressure you to spend as much as possible, and one average they succeed. That means lower interest rates will enable you to pay more at the same monthly payment. In other words, the buyer will have roughly the same monthly payment regardless of interest rates. Those rates will determine how much money goes to the seller vs the bank over 15 or 30 years.
Low interest rates cause artificially high prices which don't benefit society, just the sellers. They also lead to banks not paying interest on savings, which discourages savings. They also encourage all sorts of high prices. The current cost of a college degree is due to government guarantees on student loans, which largely didn't exist when I got mine (at a much lower price even adjusted for inflation).
And finally, something I think is true but haven't worked out all the math. It's not lower interest rates that stimulate the economy, but the act of lowering them. If we were at a steady state, reducing rates by a fixed amount and keeping things steady should produce a short-term (perhaps a few years long) spike in GDP, after which things will return to an equilibrium possibly lower than before the rate decrease (or the same or slightly higher I don't know) but less than the short term bump. The opposite is also true, raising rates will cause problems so much be done very slowly. The Fed has the US economy backed into a corner of sorts. The only way out seems to be to ignite a lot of inflation and raise rates slowly so as not to cause another collapse like 2007 (which was triggered by an abrupt rate increase).
So first of all I think home-ownership is bullshit for other reasons. So I don't really want to defend it.
> In other words, the buyer will have roughly the same monthly payment regardless of interest rates. Those rates will determine how much money goes to the seller vs the bank over 15 or 30 years.
Yes
> Low interest rates cause artificially high prices which don't benefit society, just the sellers.
Private ownership of land is a racket, yes, but you as you just said the mortgage payment should be the same as effects bank vs seller's cut. The payment structure matters more than the total price.
> They also lead to banks not paying interest on savings, which discourages savings.
Was there every a time when working class savings amounted to something in aggregate? I suspect the whole "the holloi polloi needs to learn to be frugal" has been all moralization not economics for quite some time.
> The current cost of a college degree is due to government guarantees on student loans, which largely didn't exist when I got mine (at a much lower price even adjusted for inflation).
The problem here isn't rates, but the moronic guarantee without strings attached. This is classic privatization -> regulatory capture. The government should just fund public schools and private schools can go fend for themselves.
> And finally, something I think is true but haven't worked out all the math. It's not lower interest rates that stimulate the economy, but the act of lowering them.
Certainly monetary policy is overhyped and not neutral as the neoclassical ones believe. (Anybody with half a brain can see that the COVID stimulus payments had affect that a decade of QE didn't.)
Maybe check out https://jwmason.org/slackwire/the-natural-rate-of-interest/ I think that is pretty close to what you are saying. If there is no natural rate, but many different equilibria, then we do care more about changes to the rate than the rate itself in some sense.
> In other words, the buyer will have roughly the same monthly payment regardless of interest rates. Those rates will determine how much money goes to the seller vs the bank over 15 or 30 years.
Yes
> Low interest rates cause artificially high prices which don't benefit society, just the sellers.
Private ownership of land is a racket, yes, but you as you just said the mortgage payment should be the same as effects bank vs seller's cut. The payment structure matters more than the total price.
> They also lead to banks not paying interest on savings, which discourages savings.
Was there every a time when working class savings amounted to something in aggregate? I suspect the whole "the holloi polloi needs to learn to be frugal" has been all moralization not economics for quite some time.
> The current cost of a college degree is due to government guarantees on student loans, which largely didn't exist when I got mine (at a much lower price even adjusted for inflation).
The problem here isn't rates, but the moronic guarantee without strings attached. This is classic privatization -> regulatory capture. The government should just fund public schools and private schools can go fend for themselves.
> And finally, something I think is true but haven't worked out all the math. It's not lower interest rates that stimulate the economy, but the act of lowering them.
Certainly monetary policy is overhyped and not neutral as the neoclassical ones believe. (Anybody with half a brain can see that the COVID stimulus payments had affect that a decade of QE didn't.)
Maybe check out https://jwmason.org/slackwire/the-natural-rate-of-interest/ I think that is pretty close to what you are saying. If there is no natural rate, but many different equilibria, then we do care more about changes to the rate than the rate itself in some sense.
>No, but they are definitely A problem.
They are what you get when people save too much money as money is zero sum. If one person saves, someone else doesn't. The only way to break this game is to stop saving or to lend the savings out. The private sector doesn't want them so rates drop to 0%. The government doesn't want them (ok biden changed course, go biden!). People hate government debt just as much even though they don't know that if the government doesn't take the debt it's the private sector that has to take it on and rich people have an easier time pushing the debt off to the weaker part of the population. e.g. financial crisis with subprime mortgages.
>They also lead to banks not paying interest on savings, which discourages savings
Everything would be fine if those savings were gone. For obvious reasons. Too much savings means there is no need for savings. Savings are only virtuous when they are needed. Kind of paradoxical isn't it? Because people want to be virtuous someone has to create a destination for those savings and it turns out the biggest destination is housing.
>It's not lower interest rates that stimulate the economy, but the act of lowering them.
It's much simpler. The 0% interest floor is purely man made and interest rates are still too high.
>The opposite is also true, raising rates will cause problems so much be done very slowly.
Raising rates would cause problems because rates are too high to begin with. Why would you want them to be even higher?
>The Fed has the US economy backed into a corner of sorts.
It hasn't. The Fed doesn't do anything. It's the private sector (companies, consumers, rich people) and the government that are doing everything to back the US economy into a corner. The Fed is merely the institution that has to act when everyone else failed to act and since the problem wasn't caused by the Fed it also cannot be solved by the Fed without giving it additional powers.
>The only way out seems to be to ignite a lot of inflation
The only way out? We are talking about an institution that is unable to meet its inflation goals. Of course it needs high inflation, not as a way out, it needs them to do something as boring as meeting its inflation target.
>and raise rates slowly so as not to cause another collapse like 2007 (which was triggered by an abrupt rate increase).
2007 wasn't caused by abrupt rate increases, it was caused by savers dumping their money into bad debt. The interest rate increase just caused all that bad debt to fail.
Be happy you guys got Biden. He's doing everything possible to ensure that the US economy recovers. Meanwhile I get to live in a country where the incompetent do nothing party got elected 16 years in a row. See you in 2% inflation heaven while we suffer in deflation hell.
They are what you get when people save too much money as money is zero sum. If one person saves, someone else doesn't. The only way to break this game is to stop saving or to lend the savings out. The private sector doesn't want them so rates drop to 0%. The government doesn't want them (ok biden changed course, go biden!). People hate government debt just as much even though they don't know that if the government doesn't take the debt it's the private sector that has to take it on and rich people have an easier time pushing the debt off to the weaker part of the population. e.g. financial crisis with subprime mortgages.
>They also lead to banks not paying interest on savings, which discourages savings
Everything would be fine if those savings were gone. For obvious reasons. Too much savings means there is no need for savings. Savings are only virtuous when they are needed. Kind of paradoxical isn't it? Because people want to be virtuous someone has to create a destination for those savings and it turns out the biggest destination is housing.
>It's not lower interest rates that stimulate the economy, but the act of lowering them.
It's much simpler. The 0% interest floor is purely man made and interest rates are still too high.
>The opposite is also true, raising rates will cause problems so much be done very slowly.
Raising rates would cause problems because rates are too high to begin with. Why would you want them to be even higher?
>The Fed has the US economy backed into a corner of sorts.
It hasn't. The Fed doesn't do anything. It's the private sector (companies, consumers, rich people) and the government that are doing everything to back the US economy into a corner. The Fed is merely the institution that has to act when everyone else failed to act and since the problem wasn't caused by the Fed it also cannot be solved by the Fed without giving it additional powers.
>The only way out seems to be to ignite a lot of inflation
The only way out? We are talking about an institution that is unable to meet its inflation goals. Of course it needs high inflation, not as a way out, it needs them to do something as boring as meeting its inflation target.
>and raise rates slowly so as not to cause another collapse like 2007 (which was triggered by an abrupt rate increase).
2007 wasn't caused by abrupt rate increases, it was caused by savers dumping their money into bad debt. The interest rate increase just caused all that bad debt to fail.
Be happy you guys got Biden. He's doing everything possible to ensure that the US economy recovers. Meanwhile I get to live in a country where the incompetent do nothing party got elected 16 years in a row. See you in 2% inflation heaven while we suffer in deflation hell.
Thank you. What country?
I'm not presenting this as the answer to why home ownership is screwed up. I'm presenting this as a significant part of the answer to why everyone is so indebted in general. With debt so "cheap", anything you are competing with other people for, which is basically everything in the end, you are competing with people who took "cheap" debt. When the path is greased, at scale it will be taken.
Stimulus, incidentally, has much the same problem. Yeah, great, everyone gets $3000 or whatever, but now you're just in competition with other people who just got $3000. It's not a complete loss, of course, but people advocating for it always want to talk about the benefits in pre-stimulus currency, but people spend it in post-stimulus currency.
Stimulus, incidentally, has much the same problem. Yeah, great, everyone gets $3000 or whatever, but now you're just in competition with other people who just got $3000. It's not a complete loss, of course, but people advocating for it always want to talk about the benefits in pre-stimulus currency, but people spend it in post-stimulus currency.
Deposits in a bank account need borrowers. If you keep depositing money the bank will have to find worse and worse borrowers until you get the 2008 crash.
Just let the government take the debt and get this thing over with.
Just let the government take the debt and get this thing over with.
I'd categorize debt into 4 categories:
* Student debt. University costs a fuckton of money in the US, and you can pretty much find some way to cover it in debt. For young people this is probably the #1 category of debt.
* Mortgages. Basically, of all the debts, mortgages are the ones that don't really "count," since it's generally acquired for the purpose of specifically obtaining an asset and its bottom line on your net worth is going to be around 0. Also, there's some tax advantages to mortgages, so it's not really an issue to have mortgage debt.
* Medical debt. Yeah, this sucks.
* Personal debt, primarily credit card debt. Credit card debt is something that is likely to really screw financially literate people over: it tends to be very high interest, it tends to be marketed heavily to suggest that you're not being screwed by high interest (e.g., cash-back rewards!). The minimum payments are pretty low, so it's pretty easy to cut back on paying the card if finances are tight, without realizing just how much you're being screwed by the interest.
* Student debt. University costs a fuckton of money in the US, and you can pretty much find some way to cover it in debt. For young people this is probably the #1 category of debt.
* Mortgages. Basically, of all the debts, mortgages are the ones that don't really "count," since it's generally acquired for the purpose of specifically obtaining an asset and its bottom line on your net worth is going to be around 0. Also, there's some tax advantages to mortgages, so it's not really an issue to have mortgage debt.
* Medical debt. Yeah, this sucks.
* Personal debt, primarily credit card debt. Credit card debt is something that is likely to really screw financially literate people over: it tends to be very high interest, it tends to be marketed heavily to suggest that you're not being screwed by high interest (e.g., cash-back rewards!). The minimum payments are pretty low, so it's pretty easy to cut back on paying the card if finances are tight, without realizing just how much you're being screwed by the interest.
Auto debt has ballooned in recent years. Seems like lots of people are buying more car than they need because it is "only $x more per month".
https://www.investopedia.com/personal-finance/american-debt-...
https://www.investopedia.com/personal-finance/american-debt-...
Auto debt is kind of a halfway between mortgage debt and personal debt. Like mortgages, you're acquiring a long-lived asset for the debt. However, autos famously have a very steep initial depreciation that makes me suspect that many people with auto loans are underwater--and an underwater auto loan is going to be like credit card debt in that it's buying more than you can afford.
I vacillated as to whether or not to include it as a separate category, but ultimately I think it's reasonable to consider them as personal debt insofar as they contribute to a debt epidemic.
I vacillated as to whether or not to include it as a separate category, but ultimately I think it's reasonable to consider them as personal debt insofar as they contribute to a debt epidemic.
Because it is, unfortunately, far too easy to obtain credit in the US (unless one puts a 'freeze' on one's credit reports, one gets about 1-2 offers for new credit cards in the mail daily).
Additionally, credit cards are a way of buying things where the actual cost is wholly disconnected from the purchasing activity.
Purchasing something for $1 using a credit card feels (and acts) identically to purchasing something for $2000 using a credit card. The only difference is the size of the number being added to the balance, so buying "more than one can actually afford" via credit cards is far too easy, because for many it does not feel like "spending". I.e., there's no "physicality" of having to count out cash bills and seeing the pile grow.
As well, credit card payback rates as calculated by the banks are structured such that the principal is paid down as slowly as legally allowed, which naturally increases the banks profits at the detriment of the individual paying the bill (as most of the payment goes to interest, not principal, if paying the "minimum payment" calculated by the holding bank).
So it is simply very easy to obtain plural credit cards, and to use them to fuel an instant gratification lifestyle well beyond ones means without considering the consequences of loading up 20k or 30k or more onto credit cards on a take home salary of 2-3k/month.
And, once someone has gotten themselves dug into this deep pit of debt, it is extremely difficult to climb up out of the hole.
Additionally, credit cards are a way of buying things where the actual cost is wholly disconnected from the purchasing activity.
Purchasing something for $1 using a credit card feels (and acts) identically to purchasing something for $2000 using a credit card. The only difference is the size of the number being added to the balance, so buying "more than one can actually afford" via credit cards is far too easy, because for many it does not feel like "spending". I.e., there's no "physicality" of having to count out cash bills and seeing the pile grow.
As well, credit card payback rates as calculated by the banks are structured such that the principal is paid down as slowly as legally allowed, which naturally increases the banks profits at the detriment of the individual paying the bill (as most of the payment goes to interest, not principal, if paying the "minimum payment" calculated by the holding bank).
So it is simply very easy to obtain plural credit cards, and to use them to fuel an instant gratification lifestyle well beyond ones means without considering the consequences of loading up 20k or 30k or more onto credit cards on a take home salary of 2-3k/month.
And, once someone has gotten themselves dug into this deep pit of debt, it is extremely difficult to climb up out of the hole.
> one gets about 1-2 offers for new credit cards in the mail daily
FYI, you can opt out of receiving these
https://www.consumer.ftc.gov/articles/prescreened-credit-and...
FYI, you can opt out of receiving these
https://www.consumer.ftc.gov/articles/prescreened-credit-and...
Notwithstanding the popular stereotype of the profligate American credit card user, personal debt is much higher in many European countries than in the US.
Denmark, the Netherlands, Iceland, Norway, Switzerland, Ireland, Sweden, Portugal, Finland, Spain, Greece, Belgium, and the UK all run higher household debt than Americans -- much higher in the case of the ones earlier on the list.
Source: https://www.oecd.org/sdd/fin-stats/statisticalinsightswhatdo...
Denmark, the Netherlands, Iceland, Norway, Switzerland, Ireland, Sweden, Portugal, Finland, Spain, Greece, Belgium, and the UK all run higher household debt than Americans -- much higher in the case of the ones earlier on the list.
Source: https://www.oecd.org/sdd/fin-stats/statisticalinsightswhatdo...
College costs money. If your parents aren't upper-middle-class, that means borrowing money.
Then you show up at college, and on your way to class on day 1, you are accosted by various banks handing out credit cards (or at least this was the case in the late-90s when I was at UVA).
Then, you finish college, and because real wages haven't changed in 40 years, you borrow more money to pay rent, pay back student loans, etc.
Americans have an unhealthy relationship with consumerism and credit. Doesn't help that credit is currently cheap, so buy-now, pay-later is the norm.
It's completely crazy, no disagreement. But, it's been this way for decades.
Then you show up at college, and on your way to class on day 1, you are accosted by various banks handing out credit cards (or at least this was the case in the late-90s when I was at UVA).
Then, you finish college, and because real wages haven't changed in 40 years, you borrow more money to pay rent, pay back student loans, etc.
Americans have an unhealthy relationship with consumerism and credit. Doesn't help that credit is currently cheap, so buy-now, pay-later is the norm.
It's completely crazy, no disagreement. But, it's been this way for decades.
You’ll be happy to learn that the CARD act of 2009 limited credit card companies’ marketing activities on college campuses.
Good to know! When I was in school, they'd camp out for the day near the student section in the football stadium and hand out free stuff to anybody who took a card. Free gifts and big credit lines to drunk 19 year olds - bonkers.
Did anybody actually give them real info? To us it was just a game of filling out made up details, and recalling enough to survive their quizzing to win the prize. That's probably impossible with online verification now, though.
what does it specifically say? I remember seeing prominent BofA and some other bank's booth at my college's welcome week in 2017, and a decent number of people crowded around. Felt very scummy.
Looks like the Act prevented the extension of credit to students >21yo and banned the handing out of food/gifts. But, didn't outright prevent banks from setting up tables to push their services.
From Wikipedia... Eliminates excessive marketing to young adults. Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from mailing offers to consumers under 21 unless they "opt in," and prohibits companies from wooing students with T-shirts, free pizza and other free gifts at university-sponsored events.
From Wikipedia... Eliminates excessive marketing to young adults. Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from mailing offers to consumers under 21 unless they "opt in," and prohibits companies from wooing students with T-shirts, free pizza and other free gifts at university-sponsored events.
Wikipedia claims:
“Eliminates excessive marketing to young adults. Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from mailing offers to consumers under 21 unless they "opt in," and prohibits companies from wooing students with T-shirts, free pizza and other free gifts at university-sponsored events.”
Not sure how much companies toe the line/what was going on at the event you saw.
Not sure how much companies toe the line/what was going on at the event you saw.
I think it's a little more nuanced than the wikipedia article suggests, I saw some other sources saying that they're allowed to hand out stuff, but not if it's like a reward for signing up for the card. For example: handing out a shirt in exchange for applying wouldn't be allowed, but handing out a shirt to anyone that visited the booth would be ok.
from https://www.ftc.gov/sites/default/files/documents/statutes/c...:
(2) INDUCEMENTS PROHIBITED. —No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made
from https://www.ftc.gov/sites/default/files/documents/statutes/c...:
(2) INDUCEMENTS PROHIBITED. —No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made
Nice catch, thanks!
Do Europeans not go into debt (tens to perhaps hundreds of thousands of €s) to purchase a home, for example?
Can't speak for Europe overall, but in Germany it's highly uncommon to buy a home until you've either finished studying and have a proper job, or in the case of vocational training, having worked a few years. We seem to be pretty averse to debt in general, so for most people "buying a home" is the only acceptable thing to take on a large debt, and even you're probably already 30-40. Of course this is a little different if you live where housing is really cheap, but good luck getting an apartment or a house for under 500k-1m € in a big city.
[deleted]
Perhaps less so for education, medical care, a car, etc.
https://en.wikipedia.org/wiki/List_of_countries_by_household...
Top 10 countries by household debt
Switzerland Australia Denmark Netherlands Canada Norway Cyprus New Zealand South Korea Sweden
But you as a European can't understand how people can have so much debt. Well maybe you don't understand that Europe is not homogeneous and vary a lot. So maybe your comment is relevant for a country but it's definitely not for Europe. Saying that you're European tells us nothing since it's to diverse.
Switzerland Australia Denmark Netherlands Canada Norway Cyprus New Zealand South Korea Sweden
But you as a European can't understand how people can have so much debt. Well maybe you don't understand that Europe is not homogeneous and vary a lot. So maybe your comment is relevant for a country but it's definitely not for Europe. Saying that you're European tells us nothing since it's to diverse.
Credit cards are also easy to get... I had around 22k to 30k in credit card debt by the end of my senior year. Part of that was building a business, but part was bootstrapping a business while living minimally... I learned a lot from that exp and in the end it worked out, but the ease to which I got those cards should terrify most people.
My parents helped me with school a little bit, and I was before the recent increases, so I think I graduated with maybe 25k in debt for 5 years of college. I paid it off quick as I had an amazing job out of college and sold the business I built.
I've watched my sister who is 13 years younger have a lot more debt and facing a really long march to pay it off. It is doable as she has a masters in a great field with great pay, but it is still a many year process...
My parents helped me with school a little bit, and I was before the recent increases, so I think I graduated with maybe 25k in debt for 5 years of college. I paid it off quick as I had an amazing job out of college and sold the business I built.
I've watched my sister who is 13 years younger have a lot more debt and facing a really long march to pay it off. It is doable as she has a masters in a great field with great pay, but it is still a many year process...
Probably because you are 24yo rather than from a particular continent
https://en.wikipedia.org/wiki/List_of_countries_by_household...
https://en.wikipedia.org/wiki/List_of_countries_by_household...
Yeah, the whole "as a European why is America so bad as X" gets especially funny in cases like this. As your link shows, the top 10 countries with the highest household debt to gdp ratio are mostly European. The US isn't doing great but it's not like Switzerland is hell hole so maybe it's not especially bad to have a higher household debt in the first place anyways. The European countries with lower household debt seem to have a higher public debt anyways. And to go a bit off topic here, I'm not American but it's very weird to see the almost alternative reality about how life actually is in (yes even western) Europe on the internet when it's much more bleak in real life. It's okay to be super critical of the US and it's issues but it's mind blowing to me that Europe is seen as an overall superior & a model of what should be done when it absolutely shouldn't be.
(And that's not even touching how much more stressful debt is in some parts of europe. In the US the bankruptcy courts and laws make it so much easier to bounce back after a going bankrupt, whereas it can be a completely life shattering experience in the old continent. Unless things changed recently)
(And that's not even touching how much more stressful debt is in some parts of europe. In the US the bankruptcy courts and laws make it so much easier to bounce back after a going bankrupt, whereas it can be a completely life shattering experience in the old continent. Unless things changed recently)
> The thing that i don't understand is how can people that live in the USA accumulate so much debt?
Drowning people in debt is kind of what American society is optimized for.
> As a 24yo European I never had more than 5k € of debt at any point in my life.
Europe is...not America.
“The average loan debt for a bachelor’s degree among the class of 2019 was $28,950.” [0]
[0] https://www.nerdwallet.com/article/loans/student-loans/whats...
Drowning people in debt is kind of what American society is optimized for.
> As a 24yo European I never had more than 5k € of debt at any point in my life.
Europe is...not America.
“The average loan debt for a bachelor’s degree among the class of 2019 was $28,950.” [0]
[0] https://www.nerdwallet.com/article/loans/student-loans/whats...
I knew multiple people who graduated college with over $10k of revolving (credit card) debt at over 20% APR!
It is dreadfully easy to get lines of credit as a college student, and the banks specifically target students because they are a good combination of financially naive and likely to have high future earnings potential. My first week on campus I was handed over a dozen credit card applications.
It is dreadfully easy to get lines of credit as a college student, and the banks specifically target students because they are a good combination of financially naive and likely to have high future earnings potential. My first week on campus I was handed over a dozen credit card applications.
Maybe your government provides more/better services...
Great move.
It's always been one of my pet peeves that basic personal finance classes weren't taught more in schools. Some of the biggest financial decisions in a person's life comes right as high-school is ending. Not everybody is going to become rich, but at least give people the tools they need to maximize their gifts. The system feels intentionally designed to leave them ignorant, allow them to make dumb decisions, and extract wealth from kids for decades from that.
Also, I doubt we'll ever see this as a basic public school requirement, but I'd love to see risk-management explicitly taught as part of that. To me, this guides so much of what smart decision makers do in life and would be wise for everybody to be a little familiar with.
It's always been one of my pet peeves that basic personal finance classes weren't taught more in schools. Some of the biggest financial decisions in a person's life comes right as high-school is ending. Not everybody is going to become rich, but at least give people the tools they need to maximize their gifts. The system feels intentionally designed to leave them ignorant, allow them to make dumb decisions, and extract wealth from kids for decades from that.
Also, I doubt we'll ever see this as a basic public school requirement, but I'd love to see risk-management explicitly taught as part of that. To me, this guides so much of what smart decision makers do in life and would be wise for everybody to be a little familiar with.
This is better than giving people free bus passes[1].
It's too bad that home-ec and shop were closed in many schools and either defunded or replaced by other less impactful classes.
These things impact the long term finances of many young people, many more than other niche classes would. This is probably more beneficial than a second language very few put to use.
If $100,000/yr millennials can't balance their books[1]... then how can people of lesser means balance theirs?
[1]https://news.ycombinator.com/item?id=27575872
[2]https://news.ycombinator.com/item?id=27581105
It's too bad that home-ec and shop were closed in many schools and either defunded or replaced by other less impactful classes.
These things impact the long term finances of many young people, many more than other niche classes would. This is probably more beneficial than a second language very few put to use.
If $100,000/yr millennials can't balance their books[1]... then how can people of lesser means balance theirs?
[1]https://news.ycombinator.com/item?id=27575872
[2]https://news.ycombinator.com/item?id=27581105
>If $100,000/yr millennials can't balance their books[1]... then how can people of lesser means balance theirs?
Necessity is a hell of a motivator.
Don't mistake the standard practices of a 100k/yr single person for what everyone is doing. People who are living on easy mode won't develop the same skills people living on hard mode will.
Necessity is a hell of a motivator.
Don't mistake the standard practices of a 100k/yr single person for what everyone is doing. People who are living on easy mode won't develop the same skills people living on hard mode will.
Yes, that is true and I was aware of the discrepancy, never the less, people of lesser means make financial mistakes due to lack of financial literacy because it was not taught to them -these have lasting impact. On the other hand, for schools teaching financial literacy isn't as important as sports or providing a second language to kids but it should be.
I agree those $100,000 millennials can pick up the pieces/recover much easier due to a deeper well of marketable skills and resources.
I agree those $100,000 millennials can pick up the pieces/recover much easier due to a deeper well of marketable skills and resources.
Being very far away from a (private) high school education--I could probably go through many individual courses and draw a line through them for not much loss, at least the way they're typically taught--so it does seem as if many high school curricula would benefit from a "practical track." On the other hand, there are a bunch of courses that students going on to college will benefit from. Which basically comes dowsn to whether "trade schools" should be a bigger component of high school.
I hope they at least tell the kids that the credit score chase game in the US is a giant scum. Has been for a long time. They probably wont though. Abandon all hope.
Does anyone know of any good resources for learning how to invest? I make decent money as a software engineer and max out my 401k but I don't know what to do with the money I have sitting in the bank earning almost no interest. I have a fidelity account for my 401k and company stock awards but I don't know how to go about investing in other things. I'm looking for resources to learn from, not which specific stocks to buy.
You can search HN, the typical advice is to go for things like index funds which have low fees... the value rises with the rest of the stock market, but doesn't get eaten by fees. As you get closer to retirement you will want to alter your investments.
You have enough money to hire a financial advisor, if you care. They can usually give you much better advice than random resources online (since their advice can be specific to your situation--things like taxes can be a bit complicated).
You have enough money to hire a financial advisor, if you care. They can usually give you much better advice than random resources online (since their advice can be specific to your situation--things like taxes can be a bit complicated).
Investopedia, Bogleheads, and Nerdwallet are all great resources to learn about investing. I began investing after graduating and landing my first full-time job.
At first, I used a fairly cookie-cutter "three-fund portfolio," as recommended by the Boglehead community. I choose VTI ("Vanguard Total Stock Market"), VEU ("Vanguard All World ex US"), and BND ("Vanguard Total Bond Market") as the three ETFs. In retrospect, I would probably pick VXUS ("Vanguard Total International Stock") in lieu of VEU. But that basic structure is still a good starting point for a new investor.
Most brokers these days have features such that you can set up auto deposits from your bank account, and invest them according to a pre-set asset allocation. So say you want 15% in BND, 15% in VXUS, and 70% in VTI. If on the day of deposit your account is at 14% BND, 13% VXUS, and 72% VTI, then only BND and VXUS shares would be purchased, to make the allocation as close to the desired goal as possible. Likewise, any dividends received can be automatically reinvested.
Another commenter mentioned M1 finance, which I have not used, but from what I have read, looks like a great platform.
At first, I used a fairly cookie-cutter "three-fund portfolio," as recommended by the Boglehead community. I choose VTI ("Vanguard Total Stock Market"), VEU ("Vanguard All World ex US"), and BND ("Vanguard Total Bond Market") as the three ETFs. In retrospect, I would probably pick VXUS ("Vanguard Total International Stock") in lieu of VEU. But that basic structure is still a good starting point for a new investor.
Most brokers these days have features such that you can set up auto deposits from your bank account, and invest them according to a pre-set asset allocation. So say you want 15% in BND, 15% in VXUS, and 70% in VTI. If on the day of deposit your account is at 14% BND, 13% VXUS, and 72% VTI, then only BND and VXUS shares would be purchased, to make the allocation as close to the desired goal as possible. Likewise, any dividends received can be automatically reinvested.
Another commenter mentioned M1 finance, which I have not used, but from what I have read, looks like a great platform.
First step is probably to avoid 401k rip-offs. You can find details about different providers including Fidelity here: https://www.employeefiduciary.com/sample-fee-comparisons/
You might possibly be able to switch your investments from a Fidelity fund with huge fees to something with normal fees.
For your savings, M1 Finance offers 1% interest, which is better than nothing. IMHO it is a difficult time to start investing your non-retirement money because that the market has gone up a lot recently and bonds are at all times low. I wouldn't feel bad about staying out of things right now until you can learn a lot more.
I would recommend reading everything written by Lyn Alden if you want to learn about all the macro forces effecting finance.
For your savings, M1 Finance offers 1% interest, which is better than nothing. IMHO it is a difficult time to start investing your non-retirement money because that the market has gone up a lot recently and bonds are at all times low. I wouldn't feel bad about staying out of things right now until you can learn a lot more.
I would recommend reading everything written by Lyn Alden if you want to learn about all the macro forces effecting finance.
bogleheads has both a wiki, and a forum. r/investing has daily question threads you can hit up, where you can also get generally boglehead-themed advice.
The bill says "Thirty-six (36) states guarantee access to personal finance education in their public." - http://webserver.rilegislature.gov/billtext20/housetext20/h7... . I wonder how that's helped those other states.
My personal opinion is that the system is set up to screw people out of their money, with the push for (expensive, self-funded) college education instead of on-the-job training or government-funded college education, the low minimum wage, especially for employees in tipped positions, the nerfing of union power, the high cost of a privatized health system, the difficulties of switching jobs due to employer-funded medical insurance, the lack of funding and political support things like the Consumer Financial Protection Bureau, high banking costs, and so on.
Do these personal finance classes teach about these systemic issues? Or do they imply that the student is responsible for a system weighted against them?
I wonder what part of the existing school curricula will be removed in order to have the time for this class.
My personal opinion is that the system is set up to screw people out of their money, with the push for (expensive, self-funded) college education instead of on-the-job training or government-funded college education, the low minimum wage, especially for employees in tipped positions, the nerfing of union power, the high cost of a privatized health system, the difficulties of switching jobs due to employer-funded medical insurance, the lack of funding and political support things like the Consumer Financial Protection Bureau, high banking costs, and so on.
Do these personal finance classes teach about these systemic issues? Or do they imply that the student is responsible for a system weighted against them?
I wonder what part of the existing school curricula will be removed in order to have the time for this class.
hopefully the final exam includes working out a post-college graduation budget which includes student loan repayments, and expected earnings.
It’s a bit hard to teach these concepts to somebody that has no practical knowledge of earning a paycheck, paying taxes, investing in a 401k, buying a car, etc. The ideas will seem far off and abstract. Kind of like how I could not appreciate my software engineering curriculum until years later after I worked on some horribly managed projects professionally.
Maybe the curriculum can simulate someone earning a paycheck and making payments, etc. Each week's lesson would be be a new financial month. I guess having some sort of software to keep track of each student's fictional finances would be cool, but since this is the education sector, there is probably just none to bad such software.
I hope they also teach the kids that "stonks" and crypto are no better than gambling. There should be a fictional Lamborghini dealership in this software, to teach the kids that buying a super expensive car is a waste of money.
Hah, writing this makes me wonder why I am lusting for an Alfa Romeo Giulia...
I hope they also teach the kids that "stonks" and crypto are no better than gambling. There should be a fictional Lamborghini dealership in this software, to teach the kids that buying a super expensive car is a waste of money.
Hah, writing this makes me wonder why I am lusting for an Alfa Romeo Giulia...
> It’s a bit hard to teach these concepts to somebody that has no practical knowledge of [...], etc. The ideas will seem far off and abstract.
what do you think _can_ be taught to people (K-12 students) who have no practical knowledge of anything?
what do you think _can_ be taught to people (K-12 students) who have no practical knowledge of anything?
This article is super low on facts. Can someone locate and link to the state standards for this course? What course does it replace? Anytime there's a call to add something, you must ask what it is replacing. There's only so much time in a school day. Emphasize anything and you're defacto de-emphasizing something else.
I work with cyber.org and hear states all the time talking up Computer Science and Cybersecurity. That's great! It's on message for us! ...but something else has to go. What it will be varies from state to state, but education is not something you can continue adding and adding and adding. (Unless you're advocating for longer school days/school year which is a whole different conversation.)
I work with cyber.org and hear states all the time talking up Computer Science and Cybersecurity. That's great! It's on message for us! ...but something else has to go. What it will be varies from state to state, but education is not something you can continue adding and adding and adding. (Unless you're advocating for longer school days/school year which is a whole different conversation.)
It took me so long to become "financially literate". I racked up big credit card bills in my 20's, bought a few cars with unfavorable loans around the same time. There was no education on how interest rates work, apr's are calculated and such. I probably lost 10's of thousands on poor financial decisions that I would have avoided if a class like this was around.
Some things I have learned that have become invaluable:
- Risk/reward with stocks, how bonds work.
- Balancing budgets, monthly, yearly.
- 401k, roth IRAs, saving for retirement.
- Credit debt and how to avoid it.
- Interest rates for housing and how it affects the housing market and purchasing power.
- The importance of a "rainy day savings fund".
Some things I have learned that have become invaluable:
- Risk/reward with stocks, how bonds work.
- Balancing budgets, monthly, yearly.
- 401k, roth IRAs, saving for retirement.
- Credit debt and how to avoid it.
- Interest rates for housing and how it affects the housing market and purchasing power.
- The importance of a "rainy day savings fund".
>I would have avoided if a class like this was around.
I doubt the 20yr old me would've listened anyway.
I, too, racked up some CC debt (nothing crazy) in my early 20s. I knew most concepts outlined above but it's really about dealing with temptations when you finally making real money with full-time work.
I doubt the 20yr old me would've listened anyway.
I, too, racked up some CC debt (nothing crazy) in my early 20s. I knew most concepts outlined above but it's really about dealing with temptations when you finally making real money with full-time work.
Sorry for this barrage of questions:
How did you rationalize building up big credit card bills? You knew you'd have to pay them back some day.
Were you spending without thinking about the bills? Did you not understand what interest was?
Could you afford the monthly payments, and think that if you could everything must be fine?
How did you rationalize building up big credit card bills? You knew you'd have to pay them back some day.
Were you spending without thinking about the bills? Did you not understand what interest was?
Could you afford the monthly payments, and think that if you could everything must be fine?
So they can finally understand how screwed they are by the system, right? (Specifically with regards to housing affordability) /s
But no really great for RI, wish my HS would have had a financial literacy class.
But no really great for RI, wish my HS would have had a financial literacy class.
Bring back Home Economics!! Perhaps I’m old, but when I was in school we learned how to balance a checkbook, use a washing machine, even to sew a pillow for my mother.
Fwiw, I went to a public middle school where we balanced checkbooks, went over bank accounts and taxes. I also went to a public high school where we expanded on the above topics along with stock investing and retirement accounts. I used to think these things were the same for everyone, but as I get older it seems like it might have been unique to small Iowa towns.
I had a class like that my freshman year of high school - a public school outside a medium-sized town in Michigan. It even included all the kitchen sink stuff people tend to ask for: budgeting, basic nutrition, fitness, physical health, emotional health, relationships, etc.
Looking back, I think it was about as effective as one could hope for when teaching bored fifteen-year-olds how to calculate interest compounding. Which is to say mostly not very.
Looking back, I think it was about as effective as one could hope for when teaching bored fifteen-year-olds how to calculate interest compounding. Which is to say mostly not very.
I’m perpetually shocked that many professional people (e.g. journalists with masters degrees) have a tenuous grasp at best on: basic accounting, how the US tax system functions, simple financial concepts (simple math on NPV/perpetuities/annuities, Compounding), and financial market basics (stocks vs bonds, market cap vs enterprise value)
Hi. I'm one of the professionals you'd be shocked by. One of my problems is that I don't know who to trust. It seems like most of the people who would explain any of it also have something to sell.
Of the concepts you listed, I think I understand compounding, at least the one pertaining to interest rates. The others are a mystery to me. I'm in a stable 6-figure career and in my 40s.
Of the concepts you listed, I think I understand compounding, at least the one pertaining to interest rates. The others are a mystery to me. I'm in a stable 6-figure career and in my 40s.
Sad irony that an article about financial literacy education promotes the balanced budget/govt-is-a-family fallacy.
What in the world is going on with that URL?
In your financial literacy class, try to explain the random behavior of the stock market and the scientifically demonstrated inability of people to pick individual stocks that will increase in value. Watch heads explode, unable to wrap their minds around the idea that certain mutual funds might be profitable many years in a row just from pure luck.
Wake me up when these financial literacy classes talk about the stock market in any way other than "it's a game, try to pick the winners". The short-term school "stock market game" is selecting winners from those whose strategies involve the greatest risk/variance. (No mention of this in TFA, but it's popular in my city.)
There are some real hard lessons to teach here, but I'm skeptical of both the curriculum's content (who wrote it?) and the audience's ability to make sense of it.
Wake me up when these financial literacy classes talk about the stock market in any way other than "it's a game, try to pick the winners". The short-term school "stock market game" is selecting winners from those whose strategies involve the greatest risk/variance. (No mention of this in TFA, but it's popular in my city.)
There are some real hard lessons to teach here, but I'm skeptical of both the curriculum's content (who wrote it?) and the audience's ability to make sense of it.
> In your financial literacy class, try to explain the random behavior of the stock market and the scientifically demonstrated inability of people to pick individual stocks that will increase in value. Watch heads explode, unable to wrap their minds around the idea that certain mutual funds might be profitable many years in a row just from pure luck.
Tons of people on WSB understand these concepts. I am not saying to emulate the behavior of WSB, but these are not concepts that are out of the grasp of a typical teenager.
Tons of people on WSB understand these concepts. I am not saying to emulate the behavior of WSB, but these are not concepts that are out of the grasp of a typical teenager.
Always hated the phrase "financial literacy;" our entire economic system isn't set up to make my personal reading skills and experience more difficult and weighed against my best interest.
Slippery slope for proponents of bitcoin to slip bitcoin into the curriculum.
Imo financial concepts should have been taught along with math, because math is pretty boring to most students the way it is taught currently.
Imo financial concepts should have been taught along with math, because math is pretty boring to most students the way it is taught currently.
not to be too snarky but, is this sponsored by Chase Bank? There are a lot of ways to do this wrong.
Things that our schools don’t teach but totally should:
- Nutrition
- Financial literacy
- Logical fallacies
- Emotional intelligence
- The creative process
- Nutrition
- Financial literacy
- Logical fallacies
- Emotional intelligence
- The creative process
Step #1, forget everything you learned on wall street bets
I don’t mind it but it is so middle class. This needs to be supplemental to a class about staying in school, away from drugs and alcohol and not getting pregnant.
Honestly- I don't think 99% of students will care. And those that do are largely the type that will not need this class (well off, or already would be doing this research, for example).
I think it's really hard to care about 99% of personal finance until you are in it, and thankfully most students in this class won't have to care about the material immediately. And the material is bottom of the barrel in terms of intellectual stimulation and a surprising large body of material. Without "hooks" like actually paying rent, electric, etc. it feels so abstract that nothing sticks well.
We had a course like this required as part of my high school graduation reqs and among myself/friends it was hugely ineffective.
I don't know what the best way to solve this problem is, but I'm dubious this will benefit anyone
I think it's really hard to care about 99% of personal finance until you are in it, and thankfully most students in this class won't have to care about the material immediately. And the material is bottom of the barrel in terms of intellectual stimulation and a surprising large body of material. Without "hooks" like actually paying rent, electric, etc. it feels so abstract that nothing sticks well.
We had a course like this required as part of my high school graduation reqs and among myself/friends it was hugely ineffective.
I don't know what the best way to solve this problem is, but I'm dubious this will benefit anyone
> Honestly- I don't think 99% of students will care. And those that do are largely the type that will not need this class (well off, or already would be doing this research, for example).
we subject students to learning about stuff few of them care about. what's the argument for keeping all of that material, but rejecting this?
> Without "hooks" like actually paying rent, electric, etc. it feels so abstract that nothing sticks well.
what are the hooks for getting other high school material to stick?
we subject students to learning about stuff few of them care about. what's the argument for keeping all of that material, but rejecting this?
> Without "hooks" like actually paying rent, electric, etc. it feels so abstract that nothing sticks well.
what are the hooks for getting other high school material to stick?
There aren’t any. Many of the students complaining about being forced to take pre calculus also tend to forget it. OP’s point was that teaching them is useless if they’ll just forget it.
>Honestly- I don't think 99% of students will care. And those that do are largely the type that will not need this class (well off, or already would be doing this research, for example).
yeah because they find other subjects more captivating? May as well replace one boring subject with a boring one that at least has more applicability to real life.
yeah because they find other subjects more captivating? May as well replace one boring subject with a boring one that at least has more applicability to real life.
[deleted]
I took an independent living class in high school that taught me basic checkboook balancing, cooking, cleaning, etc and while I didn’t care then, I can’t say I didn’t learn and retain anything.
I was required to pass a personal finance class in high school, it resonated with me, and I am far more comfortable than most people my age. A class may not resonate with every person, but for those who take the lessons to heart and grasp the incredible potential of exponential growth, it will be absolutely life changing.
Possibly but I think a lot of what can be taught would be of interest to teenagers. Like the real cost of financing college and how credit card interest works. There really is a litany of small things that can be catalogued as "personal finance" that young people could find interesting. After all, every kid wants to "be rich" one day.
Detailing how compound interest works and how easy it is to begin investing in the free market with a small bit early that can turn into much more 25 years down the road, for example. FWIW I had a similar class in high school and loved it. Learning about markets as well as basic things like managing a checking account were fun and felt empowering. It was a very practical course and I'd agree with you that avoiding the abstract is probably important.
Kids, and many adults, really do not understand the relationship between money and time and what time is better to teach people about that than when they have a lot of time left?
I think it's important to champion capitalism and free, public, markets, as it is our proven way of life, and teach young people how they can choose to participate in it without much to start with. Much better than trends in teaching kids it is hopeless and we need to socialize everything.
Detailing how compound interest works and how easy it is to begin investing in the free market with a small bit early that can turn into much more 25 years down the road, for example. FWIW I had a similar class in high school and loved it. Learning about markets as well as basic things like managing a checking account were fun and felt empowering. It was a very practical course and I'd agree with you that avoiding the abstract is probably important.
Kids, and many adults, really do not understand the relationship between money and time and what time is better to teach people about that than when they have a lot of time left?
I think it's important to champion capitalism and free, public, markets, as it is our proven way of life, and teach young people how they can choose to participate in it without much to start with. Much better than trends in teaching kids it is hopeless and we need to socialize everything.
its still the exposure that's relevant. simple exposure can alter search queries later, or give people a referential source to look back to, even if rote memorization or even critical thinking was completely neglected.
a student going through this class will make fun of it with their peers, but then be completely shocked at how useless and poor the decision making is from people outside their school.
a student going through this class will make fun of it with their peers, but then be completely shocked at how useless and poor the decision making is from people outside their school.
A policy wholly informed by boomers‘ stereotypes of younger generations being too stupid or hedonistic to achieve the sort of financial freedoms they got during the post-WW2 boom years.
Also sacrificing the idea of a „liberal“ education that seeks to enlighten and build character on the altar of capitalism and pragmatism.
Also sacrificing the idea of a „liberal“ education that seeks to enlighten and build character on the altar of capitalism and pragmatism.
Buried lede: “pragmatism” is a bad thing.
The idea that actually useful information should be excluded to maintain ideological purity is both stupid and surprisingly prevalent.
The idea that actually useful information should be excluded to maintain ideological purity is both stupid and surprisingly prevalent.
I agree. Nothing wrong with the class itself but it seems like it's being used to blame-shift.
[deleted]
Maybe if people were more financially literate they would stop letting the boomers rob them blind by always protecting their own interests (stocks, houses, healthcare for old people) at the expense of all other aspects of society (education, infrastructure, health care for non-old people).
The only thing you need to teach students is how to use gnucash or kmymoney. Make they log every transaction and monitor their balances. See how much they spend and then tell them "spend less." Maybe the we wouldn't have such a drastic FOMO culture where students and college kids blow their financial aid money on things that absolutely do not matter in the grand scheme of life.
I'm waiting for this to be repealed because it's thought to disadvantage minority students.
>Meanwhile over half of U.S. adults say they’re financially anxious, and over three quarters live paycheck to paycheck.
This is not because of lack of financial literary. it's due to not making enough money.
This is not because of lack of financial literary. it's due to not making enough money.
I’m not too sure, have heard antidotally from a number of vets about how much time they spent untangling young enlisted personnel from stupid financial mistakes (e.g. high interest car/motorcycle loans, when they could have qualified for a low interest loan from the navy federal credit union)
Then again, that‘s not going to happen as it would eventually destroy whole industries and populist voter bases.
I smell a non-profit I should do one day…