5 Reasons Personal Finance Should Be Taught In School

Discussion in 'The OT' started by Mark Holtz, Aug 31, 2019.

  1. Mark Holtz

    Mark Holtz New Texan

    10,921
    153
    Mar 23, 2002
    Richardson,...
    From Forbes:

    5 Reasons Personal Finance Should Be Taught In School
    FULL ARTICLE HERE
     
    jimmie57 likes this.
  2. MysteryMan

    MysteryMan Well-Known Member DBSTalk Club

    10,054
    1,137
    May 17, 2010
    USA
    I agree with the article. It's a pity life coping skills aren't mandatory in every state. I never made a dime using Geometry.
     
  3. Rich

    Rich DBSTalk Club DBSTalk Club

    33,982
    1,469
    Feb 22, 2007
    Piscataway, NJ
    I used to teach adult courses for a small college. Amazing how many people can't do math properly. Among other things.

    Rich
     
  4. jimmie57

    jimmie57 Hall Of Fame

    9,697
    768
    Jun 26, 2010
    Texas City, TX
    Way back when I used to hire people to be an apprentice,
    I gave them a math test that my son in the 5th grade made up for me.
    I added 1 problem to the test.
    I told them that they would be making $7.00 per hour for 40 hours.
    This week you will work 10 hours of overtime and the pay for over time in 1-1/2 times the regular pay.
    How much will you make for this week.
    2 of 3 could not answer that question. They did not get hired.
     
  5. AZ.

    AZ. Legend

    278
    39
    Mar 27, 2011
    We did it in the late 70s early 80s....The one I enjoyed was buying a new vehicle...Picked your new car, find out price, loan, then maintenance on that car for 5 years.....Was an eye opener to this 15 or 16 year old!...lol

    Lots of people forget in many years pass, you could write off the interest on credit cards and cars.....So many just continued their ways living off credit....I think we learn a lot from our parents, and up bringing, be it good or bad...
    Wages have never really gone up, but interest rates are through the ceiling, then people get trapped in debt.
     
  6. billsharpe

    billsharpe Hall Of Fame

    2,991
    124
    Jan 25, 2007
    Southern...
    Could applicants use pencil and paper to answer the question? I know math pretty well and could figure out the answer in my head -- ten hours at $10.50 an hour is $105 and 40 hours at $7 is $280 so the total is $385 -- but I'm not sure I could have done that calculation in my head at a job interview at age 18.

    There's lots of stuff that I learned in high school and college that I never used at work. My high school typing class, though, was one of my most-used courses that came in handy in college, the Army, and computer work.
     
  7. TheRatPatrol

    TheRatPatrol Hall Of Fame

    8,131
    530
    Oct 1, 2003
    Phoenix, AZ
    Totally 100% agree. Started teaching myself typing on the Apple IIe back in the day using some typing wizard program. Typing and 10 key were the most valuable classes that I still use today. That and the three R’s.
     
    Last edited: Aug 31, 2019
    Rich likes this.
  8. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

    49,307
    1,716
    Apr 17, 2003
    Michiana
    Being able to write off interest is a minor help. It is much better not to pay interest at all (or at least pay less interest). People don't shop around enough for a good interest rate and don't look for the total cost of ownership. One can learn from negative experiences ... it is good that your first negative experience was on paper. Hopefully when you bought your first care in real life it was not an overall negative.

    Even late in life there is a balance sheet ... I have a car, it costs me $X per month to drive and maintain but it has some major issues and won't last forever. That cycle continues every few years (I typically replace my car every six or seven years). As I get closer to replacing my car the full balance sheet comes in to focus. So far I have not saved on gas mileage (20-24 MPG since the 1990s!). Insurance is higher on a newer car, my state charges annual tax on the value of the car so that will go up and of course I am making a car payment where the old one is paid off. But the recurring maintenance starts to add up on an older car. Expensive things start to fail and one has to decide if they are worth fixing.

    I have purchased one new car in my entire life. It had a few test drives on it but I was the first owner. I drove that car over 200k in about a decade before the engine gave out. I got my money's worth. I had a couple of gifted cars after that then started purchasing used cars. On my last three cars I was the third and final owner ... two owners before me put on about 60k miles then I finished off the car with another 100k (per car). Tracking each car after trading it in there were no additional owners - my trade in to salvage yard. I got my money's worth. No, I don't drive a new car. Nobody does on day 2 of ownership.

    I miss the days when people could do math. The $385 question can be done in my head but the cashier at the store can't figure out what to do when I hand them a $10 and a dime to cover a $5.07 total bill. The easy answer is type 10.10 cash tendered on the register and let the machine say "$5.03 is your change" but most cashiers freeze up if payment isn't in full bills or exact change. Another reason to use a debit card - it makes it easier on both of us! I worked as a cashier in the days before registers calculated the change and at stores without registers. Somehow people got the right change and knew that they were not being shorted (the biggest problem were people who claimed they gave you a bigger bill such as a $20 when they gave you a $10).

    As for the debit/credit card/electronic debit world we live in now ... I wish all cards had a design that looked like money. Some people forget that the card takes money out of their account, whether immediately with a debit card or when the bill becomes due with a credit card. It is easy to flash plastic (or now tap and pay or use an app) and not see your bank balance drop until it is too late. Credit is worse than debit since the payment is not due at the end of the month (pay a tiny portion of the debt as interest builds up). Sometimes the payment due is less than the interest due - that is the time to STOP and look at what one is doing to their finances.

    If a credit card or loan has a minimum due that is less than the interest due it is the best illustration of the lender's motive. They want you in debt. They want you to pay interest on interest. It serves their company better to keep people in debt. Such a lender should be looked at as an opponent attempting to rob their customers instead of a partner trying to help people succeed. Don't let them win.

    It is much better when the consumer is controlling their credit than when the credit is controlling the consumer. A hard life lesson that I wish more people would learn on paper instead of in real life.
     
  9. jimmie57

    jimmie57 Hall Of Fame

    9,697
    768
    Jun 26, 2010
    Texas City, TX
    Yes to pencil and paper, but, they also had a calculator they could use for the test. Many of the questions were harder and more involved than this one.
     
  10. Mark Holtz

    Mark Holtz New Texan

    10,921
    153
    Mar 23, 2002
    Richardson,...
    Credit card interest and other forms of personal interest were deductible on income taxes some years ago, but Congress eliminated those deductions in the Tax Reform Act of 1986. Now personally, I do use a credit card to pay off my monthly bills each month, and that credit card is turned around and paid off every month. And, it's one of those rewards-type cards where I get something back. Needless to say, I was not amused when the moving company put the entire balance of the move on my credit card. This almost max-ed out my credit card, and messed with my credit utilization, thus causing a temporary drop. Fortunately I got that sucker paid off in about 2-3 months, and I was able to get a prime rate on my refinance.

    One of the financial skills that was taught when I went to high school was how to balance your checkbook. Nowadays, I joke by putting my checkbook on top of my nose, having written only six checks and one voided check since I opened my account here in Texas in early February. The kids have smartphones, so they should have their financial institution's banking app on their smartphones to better monitor their finances.

    And, yes, it did bother me when I was looking at my mortgage statement and saw that my payment towards the interest was three times my principal payment. At least it was a temporary situation caused by holding off until I was a permanent resident of Texas and avoid the California capital gains tax.
     
  11. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

    49,307
    1,716
    Apr 17, 2003
    Michiana
    Paying more toward interest than principal is common at the beginning of a large loan with low payments. The issue I was referring to is when the monthly payment due is less than the interest charge. Typically not possible on a mortgage but more common on a credit card/revolving account. Life lesson: If your payments do not cover the interest charged you will never get out of debt.
     
  12. Mark Holtz

    Mark Holtz New Texan

    10,921
    153
    Mar 23, 2002
    Richardson,...
    I think you have it switched around. :D Fortunately, searching for amortization table lets you find a nice calculator.

    Mortgage_Refinance_Calculator__Amortization_Calc_ 2019-09-01 16-48-15.png
     
  13. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

    49,307
    1,716
    Apr 17, 2003
    Michiana
    Corrected ... but the point was the same as my original comment on the subject ... one needs to make a monthly payment HIGHER than the interest charged if they want to pay off any loan.
     
  14. Rich

    Rich DBSTalk Club DBSTalk Club

    33,982
    1,469
    Feb 22, 2007
    Piscataway, NJ
    Yup, that's pretty much what I found. Not many adults can do basic math well. Awful course to teach, ended up getting the technical institute to buy scientific calculators and the students learned more by learning how to use the calculators than the course could have taught them. I learned a lot too.

    Rich
     
  15. Rich

    Rich DBSTalk Club DBSTalk Club

    33,982
    1,469
    Feb 22, 2007
    Piscataway, NJ
    Without the high school typing class I'd be hunting and pecking right now. Now the kids get "keyboarding" classes.

    Rich
     

Share This Page

spam firewall