Another huge problem with relying on education as a solution to any widespread problem is that there is always going to be a sizable portion of the population that are slow learners and are not going to be able to capture the concepts taught to them in a financial literacy class. Do these people not deserve to have healthy, stable, and secure lives?
The role of government should be to provide a robust safety nets for everyone regardless of how smart they are. Not forcing people to take a class on solving financial problems that the government either created or should be responsible for addressing.
Couldn’t agree with this more. If knowledge was the issue, we wouldn’t have 60% of Americans living paycheck to paycheck. We don’t need another YouTuber explaining to us how compound interest works. The psychology behind why we keep doing things over and over again expecting a different result is much more important
This scratched an itch that I've been struggling to articulate well. I grew up in an affluent suburb where designer brands and shopping called to me, and then moved to a Dutch area, where people are famously frugal, and many of my friends seem to have an aversion to spending any money. Everyone is quick to mention the deal they got on an item, comparable to pointing out the pockets on a dress after getting a compliment.
The priorities are different: marrying young, educating children, avoiding debt, viewing overconsumption as improper, maintaining a strong community, helping your neighbor, etc., etc.
I would always joke that I become a different person when I travel home, but I'm probably just easily influenced. Evidently, I too have a fragile ego. Moral of this comment is that I have seen this play out in my own (highly financially educated, likely goes without saying given I am leaving a comment on a finance article) life. I would have a lot less saved if I stayed where I was raised.
Reading this was like a throwback to “Classic Katie”. I loved it all, and agreed with most of it. I would like to see how you would tweak the current finlit education system to account for the weaknesses you’ve highlighted.
I appreciate the way your brain works. I would love to see suggested solutions follow on from your generally astute observations.
Really appreciate this commentary. I grew up mostly financially illiterate I would say, knowing that I “should” know, but too stressed about money to figure it out. Conceptually I walked around knowing I should budget, for example, but somehow let overwhelm stop it from being put into practice. I think that’s the scary part, the “practice” and the emotion that comes with it. Now that I’m in a different tax bracket, it feels there is even *more* to learn and that emotional overwhelm comes back in. Maybe the fact that there is actually so much information available is part of the problem. That the next best internet expert will magically have some other way to manage that’s better, easier, and yields more return. In summary I guess what I’m saying here is I also envy your brother in law 👏 who seems to have the basics of putting things into actual practice covered.
but then you'd also have to be on the receiving end of nonstop torture about how your texts are green and that's a battle i wouldn't wish on anyone !!! lol
How dare you recommend that Cut article about surrogacy?! I had work to do this morning. Every paragraph more wild than the next. I couldn't stop reading.
I hate all those 'why did we learn the recorder in school when they could've taught us how to do our taxes?' posts. 1. I think it's actually really beautiful that most (all? seems like one of the more common experiences but I'm sure not every school did recorder lessons) children in this country got to learn at least one musical instrument as a part of their education. 2. It's depressing that imaginations are so limited that the solution people think of is using precious education time to teach children the convoluted tax system, and not overhauling the tax system so we just get the bill/refund outright or at least killing the private tax filing software industrial complex.
This post is also stirring some deeper frustrations about what school is really for as we get articles about universities killing "useless" departments to invest more in subjects that will "prepare people for the workforce," but that's a rant for another day.
wow re: "It's depressing that imaginations are so limited that the solution people think of is using precious education time to teach children the convoluted tax system, and not overhauling the tax system so we just get the bill/refund outright or at least killing the private tax filing software industrial complex." what a perfect example of our limited imaginations in a single sentence
I've done a lot of research if financial literacy. It is generally a way to keep the poor in their place in the US (don't you dare take risks or try to use debt to build wealth, you will just mess it up), but in the Global South it is a way to suck value out of communities. Instead of sharing resources, they encourage individualization and debt.
The obvious examples of Nickel and Dimed and The Deficit Myth but The Divide by Jason Hickel, Financial Literacy Education: Neoliberalism, the Consumer and the Citizen by Chris Arthur and Divested: Inequality in the Age of Finance by Ken-Hou Lin & Megan Tobias Neely.
If you want an important counterargument then Overcoming the Saving Slump by Annamaria Lusardi goes beyond the “stop buying lattes” nonsense.
The real financial illiteracy, in the end, is people's woeful lack of familiarity with unions and debt abolition. Our debt is someone else's asset. And we can't asset our way out of inequality. To personal financial freedom, yes. But not without it coming at someone else's expense.
I totally agree that disposition matters more than literacy when it comes to saving, avoiding debt, etc. But there’s one big trait many people who built wealth the old fashioned way share: anxiety.
This can come out as control, workaholism, scarcity mindset, obsession, achievement, etc. But FIRE adherents and over savers often share, and are trying to outrun, some version of money anxiety.
I am a rare example of a non-frugal, money nerd who loves spending and has always been obsessed with building wealth. Luckily the anxiety of not doing the “right” things with money, career, etc always slightly outweighed my love of designer goods and luxury hotels.
Also, the framing of financial literacy as the problem reminds me of a recent banner I saw on CNN referring to supporters of DSA candidates as “underperforming college grads” as if college graduates earning lower wages are losers who are failing the system vs being failed by it. People who don’t want to work looking for handouts. I’m afraid we’ll see a lot more of this demonizing of anyone correctly pointing out the failing system and asking for better.
I had a brief period in my life where I was one of these frugal people. It was the two years I spent living in the Middle East where all advertising was in a language that I didn’t understand and other women’s fashion were largely hidden from me. It was 1999-2001, so no social media or targeted advertising. I saved 10k easily, and spent it all within a few months of returning to the states.
Dude. This piece is so good you make me want to stay in bed all day and give up any hope of ever producing content worthy of the world’s eyes. You’re so good. Ugh! Gross.
I wonder what a study of the politics of these consumer-culture-immunized individuals would tell us. Do they lean one way or the other; or, do they ignore the circus, and, perhaps, the voting booth all together?
We should probably tackle the actual literacy crisis first. It’s hard to teach anything when so many children, teens, and young adults just can’t functionally read. You can write all the educational material on finances you want, but if nobody understands them it’s not very helpful.
I’m a high school personal finance teacher in Missouri, a state that requires a financial literacy credit to graduate. While I love teaching the subject and think it is beneficial, I can confirm that it goes in one and out the other! Students at that age just aren’t ready to learn about it and can’t understand the value since most of them are not in a position where they have to actually apply the information.
Another huge problem with relying on education as a solution to any widespread problem is that there is always going to be a sizable portion of the population that are slow learners and are not going to be able to capture the concepts taught to them in a financial literacy class. Do these people not deserve to have healthy, stable, and secure lives?
The role of government should be to provide a robust safety nets for everyone regardless of how smart they are. Not forcing people to take a class on solving financial problems that the government either created or should be responsible for addressing.
very well put. it's extremely darwinian
Couldn’t agree with this more. If knowledge was the issue, we wouldn’t have 60% of Americans living paycheck to paycheck. We don’t need another YouTuber explaining to us how compound interest works. The psychology behind why we keep doing things over and over again expecting a different result is much more important
This scratched an itch that I've been struggling to articulate well. I grew up in an affluent suburb where designer brands and shopping called to me, and then moved to a Dutch area, where people are famously frugal, and many of my friends seem to have an aversion to spending any money. Everyone is quick to mention the deal they got on an item, comparable to pointing out the pockets on a dress after getting a compliment.
The priorities are different: marrying young, educating children, avoiding debt, viewing overconsumption as improper, maintaining a strong community, helping your neighbor, etc., etc.
I would always joke that I become a different person when I travel home, but I'm probably just easily influenced. Evidently, I too have a fragile ego. Moral of this comment is that I have seen this play out in my own (highly financially educated, likely goes without saying given I am leaving a comment on a finance article) life. I would have a lot less saved if I stayed where I was raised.
Reading this was like a throwback to “Classic Katie”. I loved it all, and agreed with most of it. I would like to see how you would tweak the current finlit education system to account for the weaknesses you’ve highlighted.
I appreciate the way your brain works. I would love to see suggested solutions follow on from your generally astute observations.
Really appreciate this commentary. I grew up mostly financially illiterate I would say, knowing that I “should” know, but too stressed about money to figure it out. Conceptually I walked around knowing I should budget, for example, but somehow let overwhelm stop it from being put into practice. I think that’s the scary part, the “practice” and the emotion that comes with it. Now that I’m in a different tax bracket, it feels there is even *more* to learn and that emotional overwhelm comes back in. Maybe the fact that there is actually so much information available is part of the problem. That the next best internet expert will magically have some other way to manage that’s better, easier, and yields more return. In summary I guess what I’m saying here is I also envy your brother in law 👏 who seems to have the basics of putting things into actual practice covered.
but then you'd also have to be on the receiving end of nonstop torture about how your texts are green and that's a battle i wouldn't wish on anyone !!! lol
How dare you recommend that Cut article about surrogacy?! I had work to do this morning. Every paragraph more wild than the next. I couldn't stop reading.
Same. Omg. So well written
I hate all those 'why did we learn the recorder in school when they could've taught us how to do our taxes?' posts. 1. I think it's actually really beautiful that most (all? seems like one of the more common experiences but I'm sure not every school did recorder lessons) children in this country got to learn at least one musical instrument as a part of their education. 2. It's depressing that imaginations are so limited that the solution people think of is using precious education time to teach children the convoluted tax system, and not overhauling the tax system so we just get the bill/refund outright or at least killing the private tax filing software industrial complex.
This post is also stirring some deeper frustrations about what school is really for as we get articles about universities killing "useless" departments to invest more in subjects that will "prepare people for the workforce," but that's a rant for another day.
wow re: "It's depressing that imaginations are so limited that the solution people think of is using precious education time to teach children the convoluted tax system, and not overhauling the tax system so we just get the bill/refund outright or at least killing the private tax filing software industrial complex." what a perfect example of our limited imaginations in a single sentence
I've done a lot of research if financial literacy. It is generally a way to keep the poor in their place in the US (don't you dare take risks or try to use debt to build wealth, you will just mess it up), but in the Global South it is a way to suck value out of communities. Instead of sharing resources, they encourage individualization and debt.
any recommended reading/resources on this subject?
The obvious examples of Nickel and Dimed and The Deficit Myth but The Divide by Jason Hickel, Financial Literacy Education: Neoliberalism, the Consumer and the Citizen by Chris Arthur and Divested: Inequality in the Age of Finance by Ken-Hou Lin & Megan Tobias Neely.
If you want an important counterargument then Overcoming the Saving Slump by Annamaria Lusardi goes beyond the “stop buying lattes” nonsense.
just copy/pasted this entire comment to my notes app. thank you!
The real financial illiteracy, in the end, is people's woeful lack of familiarity with unions and debt abolition. Our debt is someone else's asset. And we can't asset our way out of inequality. To personal financial freedom, yes. But not without it coming at someone else's expense.
I totally agree that disposition matters more than literacy when it comes to saving, avoiding debt, etc. But there’s one big trait many people who built wealth the old fashioned way share: anxiety.
This can come out as control, workaholism, scarcity mindset, obsession, achievement, etc. But FIRE adherents and over savers often share, and are trying to outrun, some version of money anxiety.
I am a rare example of a non-frugal, money nerd who loves spending and has always been obsessed with building wealth. Luckily the anxiety of not doing the “right” things with money, career, etc always slightly outweighed my love of designer goods and luxury hotels.
Thanks eldest daughter syndrome!
Also, the framing of financial literacy as the problem reminds me of a recent banner I saw on CNN referring to supporters of DSA candidates as “underperforming college grads” as if college graduates earning lower wages are losers who are failing the system vs being failed by it. People who don’t want to work looking for handouts. I’m afraid we’ll see a lot more of this demonizing of anyone correctly pointing out the failing system and asking for better.
I had a brief period in my life where I was one of these frugal people. It was the two years I spent living in the Middle East where all advertising was in a language that I didn’t understand and other women’s fashion were largely hidden from me. It was 1999-2001, so no social media or targeted advertising. I saved 10k easily, and spent it all within a few months of returning to the states.
Dude. This piece is so good you make me want to stay in bed all day and give up any hope of ever producing content worthy of the world’s eyes. You’re so good. Ugh! Gross.
omg devin???? are you serious i'm blushing
I wonder what a study of the politics of these consumer-culture-immunized individuals would tell us. Do they lean one way or the other; or, do they ignore the circus, and, perhaps, the voting booth all together?
We should probably tackle the actual literacy crisis first. It’s hard to teach anything when so many children, teens, and young adults just can’t functionally read. You can write all the educational material on finances you want, but if nobody understands them it’s not very helpful.
I’m a high school personal finance teacher in Missouri, a state that requires a financial literacy credit to graduate. While I love teaching the subject and think it is beneficial, I can confirm that it goes in one and out the other! Students at that age just aren’t ready to learn about it and can’t understand the value since most of them are not in a position where they have to actually apply the information.