Comment by imgabe | Hacker News Reader

Comment by imgabe | Hacker News Reader

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).

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?

> 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.

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.

>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.

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.

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%

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