Money lessons without money: The financial literacy fallacy | Hacker News Reader

Money lessons without money: The financial literacy fallacy

anandsanwal.me

228 pointsherbertl225 comments

Any argument against teaching financial literacy can also be applied to pretty much any topic taught in schools.

You could also write the same clever-sounding contrarian think-piece about why teaching Home Economics doesn't make sense until you have your own home to run; teaching CPR doesn't make sense unless there's someone choking right in front of you; etc.

Using the logic underpinning this article, the only things taught in school should be how to play video games, how to find the best parties and how to get laid; since those are the only things actually relevant to students at that stage of their life.

Obviously studies will show that most students don't become financial wizards after taking financial literacy classes, because that's how it is with all education. How many kids who take English class become good writers?

Doesn't mean we shouldn't offer the knowledge for those willing to take it.

You grossly misrepresent the points of the article!

I usually hate such one-liner responses, but in this case, really, it is the article that needs to be read, not my reply. I could not say nothing and let this stand though, the contrast between the comment and what is actually in the article is too large.

I do not.

The article claims that teaching financial literacy is a "fallacy" ie. doesn't work because kids have no way to contextualize something they don't have a need for. So we should give them the need for the knowledge by instead helping all kids start a small business.

Again, the equivalent would be kicking children out of their parents homes and helping them find apartments so they can get experience in Home Economics.

Maybe we just start by teaching kids financial literacy the way our educational bureaucracy knows how to instead of fighting it because it's not perfect.

I think what the author was saying is that we teach the intellectual theory of financial literacy but not the emotional practice of it. To use your home economics example, i assume the author would equate it to reading a book on how to cook an egg instead of firing up the hot stove and dancing with the time pressure, heat pressure, and attentional pressure that can come with cooking a meal.

Which reminds me of how some places teach science.

We accept that students can’t really learn chemistry without practice in the lab but practicals for physics aren’t done so students graduate without being able to contextualize things.

The article claims that teaching "money math" on a whiteboard that lacks any relation to real money won't make students learn financial literacy and the time wasted there should be replaced by something else.

There is also a serious implication that "hey, students didn't have enough time to learn math, maybe we could add the time to it". But it's an almost irrelevant side point, and I got from it that the author would be perfectly fine with teaching real financial literacy instead too.

So, yes, you seem to have misunderstood it.

You present a tiny fraction of the article and argue against it.

Most comments arguing against omit major points, they make zero mention of it: For example, the author points to the abysmal skills in very basic reading and math of a large part of pupils, and argues - rightly so I would say - that adding more and more on top when the very basics are missing!

I stand by my comment. A lot of people here argue on reflex or by picking some tiny piece of the whole. This is one of the more a terrible discussions on this site, for some reason I don't see.

IMO the author makes some really good points - especially when you take his whole argument, and not individual pieces. He also does not just criticize, he also has suggestions for what to do that are worth looking at.

The discussion reminds of the many voices saying "they need more training" after some police officer killed an unarmed suspect that was not threatening them. As if that would help, when in that case it is an attitude and lack of accountability problem, and in the case of this discussion it is incentives and human psychology and lack of the basics that overwhelm anything you could teach on the subject itself!

The author rightfully argues against this "needs more training" panacea for all human problems, ignoring much larger forces and how humans and their brains work.

He also does not at all argue that there should be no financial training! He argues that it has to take into account those other problems, and he makes suggestions for how it could look like.

On the other hand, I saw not a single one of those quick article-condemnation comments take any of the many points made in the article into account. All picking either just the general idea in one sentence alone, or picking one or a few sentences to argue against, disregarding all other points, even though they all belong together.

The thing I think you’re missing is that financial literacy is not like most subjects taught in schools. Schools teach math so that students can do sums; they teach reading so that students can read. But financial literacy, sex education and civics are not about knowledge; they are about *character: they are less about what students can do and much more about what they ought to do.

The methods used to inculcate character are, I think, different from the ones used to build knowledge.

Is that the best way of thinking about it? I think the goal of all primary and secondaey education is to impart knowledge, build skills, and build character. Take sex ed. Building "practical skills", namely applying a prophylactic device to a banana. But it is also about teaching you that there are risks to certain behaviours that need to be considered. And being forced to discuss it sensibly and without giggling every 30s builds character.

Or take maths. Maybe it is reductive but I think the difficulty of it helps build character. Most kids need to do a lot of exercises and memorisation, and the feeling of accomplishment of getting it and doing well? That is character building. Obviously immensely useful too.

Civics (we had "social studies" and I don't recall ever discussing our political system, but at least in theory) involves:

- teaching facts about the system (how many representatives there are, how often elections are held, who is responsible for what, what do courts do, what do juries do, what do MPs do, what do the police do, how are they structurally different from civil servants or the media or universities etc)

- teaching skills (how to vote, how to think about political/societal structures, etc)

- teaching character (instilling civic pride, understanding the long and rich history that led us here today, etc)

I thought the purpose of primary and secondary education was to progressively build a fungible work unit.

Financial literacy is not some magical thing that lies outside the realm of topics like math and history. It is math and history.

Building character might be needed to make good financial decisions, but the knowledge of the mechanics of how markets, debt, investment, compounding, pricing, fractional-reserve banking, etc. works are just concepts like any other. Teaching them is good.

Sure, we won't magically make people less prone to emotional decision making. Teaching about gravity doesn't make you less prone to it either, but understanding how it works is good.

How this "financial literacy can't be taught" thing became a meme I'll never understand. Like most things on the internet, it seems to be a hipster contrarian reaction to the "why isn't this taught in schools" comments you'd see all over the web in the 2000s.

How about we stop trying to get attention for having interesting contrarian "takes" and just try doing the common sense thing and work on improving it from there.

I think the point isn't that teaching financial literacy is pointless, just that its impact is severely reduced due to external factors. And wringing our hands over the details of the curriculum is bike shedding, as alluded to in the article. John Doe can ace his financial literacy course and still go on to max out multiple credit cards after high school because of pressures that couldn't be understood from declarative knowledge alone.

I'd say character is necessary but not sufficient. You also need knowledge and motivation.

Knowledge keeps you from investing in ways that mostly lose money. Plenty of young people try to do the right thing, and screw it up.

Understanding compound interest can improve motivation. Exponential functions aren't really intuitive to most people. They tend to make linear projections, which causes people to underestimate the rewards from investments and the damage from debt.

(The article of course isn't saying we shouldn't teach kids this knowledge; it's proposing better ways to teach it.)

From talking to people who, leaving high school, didn't know "obvious" things about finance, had a bad time, and course-corrected as soon as they figured it out: I'd say it's a lot more about knowledge than you're supposing.

You'd be amazed the things people with parents different from yours didn't pick up.

I don’t think it needs to be about what they ought to do. You can tell someone, if you abuse credit cards to buy a bunch of stuff you can’t afford, you’ll end up broke. They can make the “I don’t want to be broke so I won’t do that” connection on their own. Lay out the facts and consequences and you’re all set.

Same with sex. You don’t need to tell them not to get pregnant, or get someone pregnant, in high school. You teach them how to avoid it and what happens if they do it.

There is quite a lot of technical knowledge involved: what is inflation, how to defend against it. Various investment instruments, their risk profile. What are popular scams, how to recognize (credit cards is the most popular and dangerous scam IMO). Сompound interest, mortgage calculations, etc.

As to the "character", that's mostly learning about the mathematical concept of "less": spend less than you earn.

i think your examples are actually fantastic. a home ec class where kids actually cook something is much better than just reading a bunch of recipes. a CPR class where you practice on a dummy is better than just watching a video on it.

fwiw i had the same experience with money that the article talks about. my parents tried to impart alot of wisdom on me but it hits different when you have actual money in the market and see it go down.

In home economics though, you are cooking real food, right?

Yes! My wife grew up in the SF Bay area in one of the wealthiest suburbs. They had water polo, cross country trips etc. They did not, however, have home economics! It makes me so sad, as I see her peers (and for a while, her) be relatively clueless on cooking at home.

The number of restaurants and coffee shops has exploded compared to when I was a teenager.

It starts to add up if you go to Starbucks frequently.

I vaguely remember home economics. We cookes things I don't like. I didn't learn cooking that way.

No. In our Home Ec course, we baked cookies, that was it. The rest of it was in the classroom. I imagine that the experience varies from one district to another.

We had home economics for one quarter as part of a rotation through grade-school electives: art, home ec, drama, wood shop. We didn't learn much about cooking, but I did learn how to sew on a button and do some basic clothing repairs that have come in handy.

Yes. I also did some sewing. And in shop class we did actual woodworking. I think active project based learning is best whenever it's possible and practical.

Why should I learn this?

This is the question most kids ask when offered education. If you answer that first, everything else follows.

Start with why. (Thank you Simon Sinek.) Are there meaningful, ongoing benefits to learning how to make specific decisions with your money? Should you care enough to learn the more mundane details like reviewing expenses or filing your own taxes?

I know there are attempts, like showing those log graphs that try to impress upon young minds the long-term value of compound interest. I'm sure those help a few people, but I do wonder if there might be other more impactful concepts.

Personally, I get a great deal of satisfaction out of things like efficiency, self-reliance, and so on, but I don't know if valuing those things can be taught, or just develops organically. Regardless, I think you always need to impress upon students the motivations for their decision-making and try to help them care. The rest can come later.

Yes, this is a very general insight, not just for education, but for any presentation: work backwards from what problem you're solving with the material. Then everything makes so much more sense!

> Start with why. (Thank you Simon Sinek.) Are there meaningful, ongoing benefits to learning how to make specific decisions with your money?

It's a great approach when the "meaningful, ongoing benefits" start to occur either immediately, or in the near future when you're living a life very, very much like the one you're living today.

The difficulty of doing that within the context of educating 5-18 (+/- 4) years olds is that benefits (and costs) of learning (or not) are far, far down the road, in a life that they can typically not even imagine with any degree of accuracy.

Many high schoolers on the cusp of needing some finanical literacy. They may be starting their first jobs, and making a budget and saving for a rainy day would be good skills. Others are about to borrow for college and financial understanding could help them avoid getting into a lot of debt in order to struggle at a degree that they end up not attaining, or in order to attain a degree that doesn't add up economically. Some may be moving out (voluntarily or not) and need to have an income, find a place an pay rent, pay for food and utilities, etc, with potentially little room for error.

> Start with why

This would have done so much for me, especially with the more abstract math classes that made no sense until much later. It would have been good if the math problems even approximated reality. Simple things like adjusting a recipe to a different number of people, applying taxes, calculating interest. Only shop class gave me the satisfaction of doing something concrete.

For me, there was no "aha!" moment in high school, and it made it very difficult to understand why I needed to care.

https://xkcd.com/1050/

Excuse the smugness. Just providing counter perspective.

I know people, this does not help more people to easily understand the topic. But, lot of math like number theory was worked out as a intellectual exercise rather than application based.

Application followed theory. And people theorized for fun.

That can also make topics, abstract and unrelatable.

How is it a counter example?

Things you won't end up using lack any "why" beyond "just in case". The only way you avoid using personal finance skills is if you partner up and completely offload that responsibility onto someone else. Fine, in that case, don't bother learning it!

Hey,

Non native speaker here. I think I conveyed something that I did not mean to convey. I was just saying concentrating on the "why" and having a utiliterean perspective about the topics to learn while useful and help the children to relate, need not be the only criteria.

Cause, lot of things can be a little more abstract and some what removed from exact applications in real world. But, they can still be beautiful. That is what I meant to say. I think I conveyed the exact opposite.

I mean ... once you put it that way, yes, I'm actually willing to bite that bullet! (Or at least a cleaned-up, steelmanned version of it.)

It's vanishingly unlikely that any student who learns "personal finance", with no practical application, is going to retain it for the 5+ years until they'll actually need to use it. Learning doesn't work that way -- with, as you note, a few exceptions for unusually motivated students ... who would probably be able to learn it on their own when the time comes.

Ditto for the famous meme about "why don't schools teach something useful, like doing my taxes?" Because it would come across as an ungrounded, garbled mess that you'd forget by the time it was actually relevant.

So yes, I'd say that generally, education should work by grounding lessons in some kind of practical application. And indeed, like the other comments note, that's how it works for some of your other examples, like actually cooking something for home ec, or doing CPR on a dummy (which mimics most of the dynamics of the real thing, even if imperfectly).

I think there's a real human need being expressed by the common complaint, "When are we ever gonna use this stuff?" I'd phrase it as, "You're not grounding this material in a way that allows me to reason about it, and what's important vs isn't."

So, to the extent that we want to prepare students for "the real world" -- in particular, things like "doing your taxes" and "evaluating a car loan" -- I'd say the best way to address it would be by teaching the (meta-)skill of "learning an unknown domain". (Yes, "learning how to learn" ... but as an explicit skill, not one applied to material that is itself too artificial.) That's something you could apply to practical problems, even if they're not the same ones students will be solving later.

Applying this insight to the teaching of literary analysis: frame it as refuting an internet comment that doesn't understand that a song is a metaphor.

In fact, one thing that frustrates me about how the teach estimation in math is that they teach a useless version of it: you do something that takes about as long as calculating the exact value, except you add some rounding steps because you're told you can't give an exact answer. What you should instead do is give a timed test, which much more problems that usual, and only require approximate answers. Then you're forced to save time by rounding.

Late edit:

>Using the logic underpinning this article, the only things taught in school should be how to play video games, how to find the best parties and how to get laid; since those are the only things actually relevant to students at that stage of their life.

Yes, it does annoy me when the education system neglects the teaching of some skills that don't come naturally to some students, but not other skills.

I think this debate about utility misses some of the functions of education that the Romans (like Aulus Gellius and Macrobius) discuss: they talk about education having three parts, namely utility, pleasure, and "cultitavtion" or "culture" (for lack of a better English word). Yes, some education does have direct practical application (utility) in life, but that alone is not sufficient. And, education must include pleasure and teach one how to take pleasure in things, or else it becomes an oppressive training in servility. But the third element, "cultivation," is the one that people today most often overlook. It's the Roman word for tilling soil, which you do not because it makes plants grow (that's sowing seeds) but because it prepares the ground for plants to grow when you do sow them. There are some educational activities that do not have direct and immediate utility but do open up new capabilities that can lead to future utility. Learning geometric constructions, for example, may not have immediate practical utility, but it may prepare the mind for trigonometry. Grade school art class never made anyone a Michelangelo or Monet, but learning to hold a brush or sculpt clay does promote fine motor skills that will enable one hold a pen later in education or maybe, with more practice, a scalpel in medical school.

Financial literacy for those who do not yet have wealth to manage, even if it doesn't seem practical in the moment, still opens up new capabilities to enable future growth.

>I think this debate about utility misses some of the functions of education that the Romans (like Aulus Gellius and Macrobius) discuss: they talk about education having three parts, ...

Sure, but I was making that point in the context of a discussion that accepted the premise that we do want kids to be good at a practical skill (personal finance) and we want to know how to best adapt schools to achieve that.

> But the third element, "cultivation," is the one that people today most often overlook. It's the Roman word for tilling soil, which you do not because it makes plants grow (that's sowing seeds) but because it prepares the ground for plants to grow when you do sow them. There are some educational activities that do not have direct and immediate utility but do open up new capabilities that can lead to future utility. Learning geometric constructions, for example, may not have immediate practical utility, but it may prepare the mind for trigonometry.

It seems like you're agreeing with my point there, about the need to ground the knowledge in what it will be used for, and thus some meaningful criteria for whether you're doing it right, that you can reason able. See my paragraph about "When are we ever going to use this stuff?": yes, it would tremendously help to teach tilling soil with an eye for "which tillings will actually make the soil receptive for seeds?" because then it would make a ton more sense why they're telling you to do it one way vs another!

>Grade school art class never made anyone a Michelangelo or Monet, but learning to hold a brush or sculpt clay does promote fine motor skills that will enable one hold a pen later in education or maybe, with more practice, a scalpel in medical school.

And again, you're agreeing about the need for practical application of a skill (actually using the brush).

>Financial literacy for those who do not yet have wealth to manage, even if it doesn't seem practical in the moment, still opens up new capabilities to enable future growth.

No, the issue is that it won't -- unless it hooks into some meaningful understanding that prevents it from folding into "useless esoterica where you have to guess the correct answer and then forget about over time", that most education falls into the trap of.

There’s an interesting difference between learning how to do taxes and learning how to evaluate an auto loan, in that the latter is often adversarial. Thousands of highly-paid experts spend their days figuring out how to get you to take on more debt and pay more fees and interest. With taxes, you might have Intuit or whoever trying to get you to buy prep services you don’t need, but it’s small potatoes by comparison. You can at least get unbiased tax info directly from the source. Nobody from the IRS will try to upsell you on a seat massager option that’s only $10/month more (and it extends the loan term by two years but let’s just gloss over that).

I’m not sure exactly what it means here, but I think there’s a big difference when it comes to teaching people how to learn things that powerful vested interests want them not to know.

Agreed. And the article talks about that some:

>Most personal finance math is basic arithmetic – the same arithmetic that most of our students currently struggle with. The hard part is everything else: impulse control, peer pressure, status anxiety, and the fundamental uncertainty of the future.

>Teaching teenagers about compound interest won’t help them resist the urge to keep up with their friends’ spending any more than teaching them about calories will stop them from eating junk food.

Still, you can at least separate out those skills as being independently worth teaching: how to figure out the impact on your budget, and the social dynamics driving your options.

I don’t think this is right. Teaching compound interest will help them resist that urge. What it won’t do is guarantee success, but there’s enormous benefit in just helping. This sentence mixes “help” with “stop,” suggesting that either something is useless or it’s bulletproof.

People can and do modify their choices based on their knowledge of the consequences. Yes, even teenagers, sometimes.

But for these examples, I think you also need to teach them that they’re doing battle with people who want them to make bad choices. People who spend their lives studying how to get them to make bad choices. Don’t just teach them about compound interest. Tell them how credit card companies try to trick you into suffering from it. Tell them how car salespeople will focus on the monthly payment and do their best to obfuscate the total cost. Tell them how junk food makers abuse psychology to make you want their product.

Teenagers love being contrary. We should take advantage of this tendency. The other guys certainly are.

> Most personal finance math is basic arithmetic

Most personal finance is understanding that anyone offering you financial services wants to make money with your money, no matter what they say or how nice they seem.

In some cases, they won't actually reduce the amount you have claim to (like banks holding your money), but will make their money with your money. In other cases, they will take some (hopefully) small percentage of the gain in value of your money, supposedly (and sometimes rightfully) as compensation for the work they claim to have done. In the worst cases, they will gamble with your money in a way that ensures that they never lose, but you may.

Understanding these human factors in real world personal finance comes, in my book, before anything else.

> teaching CPR doesn't make sense unless there's someone choking right in front of you; etc

This would actually be amazing if possible.

“Operator, I need CPR lessons, now”

Like Neo in the Matrix - “I know Kung-Fu”

I've used the Heimlich maneuver once in my life. Interestingly, it was on a nurse anesthetist - who also knew enough to do the hands-around-neck choking sign to indicate what he needed, and turn around so I could do it. In the surgery lounge at a hospital. Popped out on first try.

The other point the article makes is that most of the children literally can't understand it because they are completely innumerate.

Proposing the teaching of financial literacy when the children are baffled by arithmetic is absurd.

Your "use case" should be, there's a 22 year old college student living in the dorms. How will this software get him laid?

— Jamie Zawinski <https://www.jwz.org/doc/groupware.html>

Interesting thing to quote, given that JWZ hisself now says:

> If all the people who claimed to have been "inspired" by this piece hadn't been, and had just kept writing middleware for banks or whatever, the world might have been a slightly better place.

> I wish I had never published this.

It seems that what he actually objects to are the now-ubiquitous surveillance, centralization, and black-box algorithm curation aspects of social networks – not the actually social parts.

When I was in middle school we actually cooked and baked in home economics, we didn’t memorize recipes showed on an overhead projector. In Physical Education we ran the mile, didn’t want videos on optimal technique. I think this is the main point.

The article's argument is that experience is a better teacher than a person with a curriculum and a chalkboard, which I agree with, but the proposed solution: "so, let's just give them experience!" is a shallow proposition—I doubt anyone knows how to start 4 million small businesses per year, with meaningful revenue, using a workforce that hasn't (yet) graduated high school.

Experience is hard (if not impossible) to scale. And it could easily backfire: imagine the scenario where the experience is miserable and results in failure. What if the students' lesson learned is "why bother trying?"

The most effective way we have to scale experience is through simulation. And we know how to provide that pseudo-experience to young kids without a lot of investment: story telling.

Maybe we should scour the globe for compelling stories that teach lessons about delayed gratification, the value of saving, and self-confidence vs. vanity in terms of spending money, so that we could start telling them to students at an early age.

The article also references a low capital required list of business ideas for high school children. No one is arguing for million dollar projects. The argument is for hundred/thousand dollar projects.

Financial video games, where the player never sees "finance!" in any of the media marketing of the serious educational product sold as a toy. Seriously, the "rules" of finance pale in complexity when compared to how much intricacy and never-actually-pointless complexity put into simulation games. I expect there are already finance/stock/economic simulation games of a serious nature; make and promote watered down versions and market them in cooperation with serious money paid to the people that actually successfully sell pop culture game software. Yes, a hard sell, I know, I came from those industries, but it can be done.

Isn't Eve Online essentially that.

Starting a newbro corp with a bunch of unemployed high schoolers and decent taxes would make a great lesson on why you want to run a corporation and not be an employee.

I don't play, but from discussions with an addicted buddy, sure sounds like they do serious finance and economic projections as a part of their play strategies. He was in the middle of that event a few years ago where some huge amount of Eve Online players had some giant battle, and the amount of game money destroyed made the mainstream news.

I have kids, there's no need for simulation. We have Roblox.

Which has been a surprisingly useful [1]real-world/low-stakes financial literacy course for them.

- They have been scammed.

- They have blown money on stupid useless stuff and cried with regret.

- They've applied for jobs (seriously, there was an application process and interview).

- They've made hundreds if not thousands of decisions balancing entertainment, commerce, utility, and budgeting.

It's all of the true feel-it-in-your-bones financial literacy that the article advocates for being delivered to them in the guise of blocky figures and them playing with friends.

1 - You buy Robux (the in-game currency) with real money, and for years, it's been the number one thing they've asked for as a gift.

I still don't understand how the Robux stuff is legal.

I mean I cut my teeth on RuneScape and it was the same kind of deal. I learned that cow hides rose in value as you bring them closer to the crafting centres and that middlemen who want to do it for you can take a generous cut for themselves.

That sounds like RuneScape for me as a kid. I got scammed, made money, made friends, had pathetic swipes at romance etc.

What are the downsides to Roblox in your experience? It feels like crack cocaine for kids

Read the Hindenburg article about Roblox

Or this video, by Quintin Smith (People Make Games): <https://www.youtube.com/watch?v=_gXlauRB1EQ> (with follow-up: <https://www.youtube.com/watch?v=vTMF6xEiAaY>)

Unfortunately you run the risk of your children learning "financial literacy" of the form "scamming people is lucrative, and gambling is fun and zero-consequence because it's all funny money anyway".

When I was at primary school - specifically, around year 5 when I was about 9 - our class did a "small businesses" unit. We had to create business plans including a marketing plan, and yes a financial plan. What were we doing, how much were the inputs, how much are the outputs, how much time, what do we make per hour?

We did it in groups although some did it individually. One group did a carwash that also made you a coffee while you waited. My team was three of us and we put on a school disco (actually two, senior and junior). We had to organise lighting, music, equipment. We had to sell tickets. It was so profitable it paid for the entire school camp for our whole class, and the next year's too.

I don't know how much we actually learnt and I am sure our parents helped but I doubt it was entirely ineffectual. Probably more useful than many of the other activities we did.

Point being: there is no reason kids can't experiment with business as children, whether it is a lemonade stand, a carwash or a school disco.

I also have to point out for the record that if ever there was a win for capitalism over top down social planning, it was that the disco organised mainly by three 9 year olds was not only by far the most popular and enjoyable social event of my entire time at school (including high school) but it was also as far as I know the most profitable.

When I was in elementary school, the class ran a business making and selling box kites. It was part fundraiser, part economics, part engineering.

We took orders, budgeted materials, then built the kites out of straw, string, and paper over the course a quarter. Something like this [1].

I thought it was a really valuable introduction to econ and business for a group of 10 year olds. I remember calculating how long it would take to fulfill remaining orders, and if I could could make my own kite business and undercut the class price as a private business.

https://www.instructables.com/Tetrahedral-Kite-1/

> using a workforce that hasn't (yet) graduated high school.

Later, in court:

- Your Honor, honestly, I thought "small" businesses could only use child labor.

Many people I know need some lessons in basic financial literacy.

I’ve been living in an apartment for the past 18 months while saving to build a house and I’ll be here until the home is completed in October.

It has been very alarming watching how my neighbors behave and spend money.

I myself come from an impoverished background. Single mom, multiple violent stepfathers, no money, left home at 16 to escape the abuse, etc.

I slept hard for many months and I’ve been without a home on three different occasions.

However, I firmly believe that poverty is a choice for a lot of people and it’s never been more evident until I lived in an apartment complex.

My across-the-hall neighbors order food delivery 10+ times per week. Last weekend, from Friday afternoon until Sunday morning, they had food delivered 5 times.

I’ve only paid for food delivery once and that was when my son and I were stuck at home with Covid.

Many of my neighbors drive new $50k+ automobiles.

Then I hear the same across the hall neighbors arguing about money. She’s a teacher (I see her ID card hanging from the rearview of her CR-V. The husband works in a kitchen.

I’m guessing their combined gross income is maybe $100k and that’s being generous.

Yet they spend money on food delivery like they were making twice that amount.

My base salary is only $130k which is decent for Alabama, but I wouldn’t dare waste money on something like that.

I drive a 25 year old Land Cruiser that I maintain myself. Growing up poor, we didn’t pay anyone to do anything. I had to learn to repair things myself. I kept that habit through adulthood.

Sorry for the rant. It’s just wild seeing how some people live while also having to hear them complain about having no money.

A lot of people were conditioned to rely on food delivery when it was cheap. Pre-pandemic, restaurant food was much less expensive, delivery apps had low or no fees, and the options for tipping were much lower.

Now, of course, restaurant prices have skyrocketed, apps all charge significant fees and the tip expectation is around 20% (and don’t even get me started on how ridiculous it is to base tipping on food cost when none of the tip goes to anyone involved preparing the food and a 10lb bag of mashed potatoes is cheaper than a 1/2 oz container of caviar).

But people now expect their meals to be brought to their door and have a lot of resistance to going out to get it or, god forbid, preparing it for themselves.

I suspect there's a cultural element that I can't speak for outside of my own bubble.

For example, I grew up in a rural area, large family, single income. I don't know exact figures, but adjusting for inflation, I suspect my dad was making what would today be $50K USD / year, feeding 4 kids (and a bunch of farm animals and pets.) Going to a restaurant was inconvenient and expensive. The food from animal husbandry and farm crops was labor intensive, but vastly cheaper. Every meal was cooked or prepared at home. (e.g. we'd have cereal or pancakes, sandwiches for lunch, a meal of meat and potatoes and vegetables.)

If there's a point in this, it's that going out or having someone else do all the work of making a meal was a special treat. It was rare, it was exciting, it meant something.

But I know as an adult with the means to live very differently, we order out at least once a week, which feels like a ridiculous luxury. It doesn't feel special. It just feels more like, well we didn't need to be prepared and have the ingredients we need here at home, so we'll settle for something convenient. (Though where we live, we do not do delivery, but have to drive 10-15 minutes for pickup. We're usually already out because we take our dog to the park regularly.)

Obviously there's a much bigger discussion on general financial literacy, defining "need", "quality of life", what we feel we deserve, whether we think about how today's decisions impact our future and if we care enough to do something about it. But at least in respect to ordering food, I think at least some of that is going to come from culture and family influence. In my specific case, seeing how hesitant the provider of my family income was to spend money also gave me reason to stop and think a bit before spending as an adult, even as my income grew well beyond what my birth family was getting.

The trick is finding enough self-respect for yourself to break that conditioning.

I was conditioned to smoke tobacco, waste money on crappy food, vote against my own self interests every two years at the ballot box, buy a new car every five years, hate people who looked or behaved differently than me, say 'yes sir' and 'yes ma'am' and do as I'm told, etc.

I still find myself trying to break away from the stuff I learned as a child and as a young man. It takes life long effort.

I often link to these articles. Especially the second one is exactly what you are talking about:

• 5 Things Nobody Tells You About Being Poor, May 27, 2011: <https://www.cracked.com/blog/5-things-nobody-tells-you-about...>

• The 5 Stupidest Habits You Develop Growing Up Poor, January 19, 2012: <https://www.cracked.com/blog/the-5-stupidest-habits-you-deve...>

• 4 Things Politicians Will Never Understand About Poor People, February 21, 2013: <https://www.cracked.com/blog/4-things-politicians-will-never...>

(Repost: <https://news.ycombinator.com/item?id=31752737>)

Growing up poor or with money problems, seeing that struggle. One does come out different. One can potentially be more understanding when people are just continuing the lifestyle they grew up with. In this case, 2 working adults, one white collar, used to be enough to rent an apartment and eat out/ have deliveries regularly, no? That’s just a story of middle class erosion and financialization of the economy.

What makes very little sense to me is seeing people go from having very little to making a lot, and the increases in lifestyle to match income. Aka lifestyle creep. Things that 2 years ago were not even a wish are now taken for granted. And it’s all the same as everyone else.

> In this case, 2 working adults, one white collar, used to be enough to rent an apartment and eat out/ have deliveries regularly, no?

That’s not true. I grew up in the 1990s, and my dad had a white collar job working for a government contractor. I remember that he made right around the median family household income in the early 1990s, which was at the time double the income for all households. (My mom didn’t work then.) Our neighbors were professionals, white collar federal government workers, etc. Our house was 1,100 square feet. We rarely got even pizza delivery. Maybe we went to Sizzler or Pizza Hut a few times a month. We had one car until 1998 (a Toyota Camry). My dad worked right outside of DC and took a bus to the train station, and then took the Metro to the office.

I looked up the average cost of living in Alabama. It says it is 54k for a family. Do you think that is realistic? The reason why I ask is that US incomes always confuse me. Incomes seem quite high and I understand that taxes are much lower than here (Finland). As an uninformed outsider with these costs of living 100k for a couple seems quite nice and a gross income 130k appears absolutely rich. Am I missing something? IlJust very curious always as some of the income programmers with my experience get in the US seem absolutely unachievable here.

The numbers made my eyes jump out a little, though I need to remember that "six figures" when I was a ten would be over $250,000 now, a few decades later.

And I'm in the U.S., Pennsylvania instead of Alabama, though they should be similar. (COL site says PA is 20% more expensive on average.)

https://www.usnews.com/news/best-states/rankings/opportunity...

Of note, Alabama is one of the cheapest states to live in nationally. I would think that a $100K USD income would still allow for a healthy amount of extravagance and savings, though that would require financial literacy.

Childcare and healthcare costs are really the big two.

100k is an awesome salary for a young single adult in most of the country.

100k is much less awesome when you pay $3200/m for daycare for two kids, and $890/m for family health insurance.

Yeah, childcare costs are absolutely brutal nowadays. We are lucky enough to be able to hire a nanny 3 days a week with grandparents caring for them 2 days a week with young children. Daycare costs so much that this situation ends up being cost competitive.

Cost of living in my Texas city is about 10% lower than the national average, but I have friends shelling out $1400/month for 1 child. That's more than my mortgage payment from a house we got in 2020.

I haven't done looked at the FRED graphs, but I wonder how much people leaving the labor force due to the math not working out for childcare costs is happening.

I am sure these numbers seem kind of low to folks living in high cost of living areas, but the median household income here is just over $60K.

An easy way to check is look up basket prices. Average rent in America is quite high, food costs are high, tipping culture and other fees make food delivery an expensive venture. 100k for 2 people is a lot of money on a global ecale, but it's not really "rich" in the US unless you spend extremely smart for many years.

The cost of living (and everything else) varies wildly in the United States. Finland is maybe analogous to Rhode Island—not Massachusetts (Sweden) or Connecticut (Norway), but close. Alabama is then more like Albania—quite a bit cheaper… but do you want to live there?

(Sorry to all the Albanians, it’s not really fair to compare you to Alabama.)

Maybe for rural Alabama, but not for Auburn. I think Auburn has the state's second highest cost of living, second only to Madison.

My two-bedroom apartment is now $1400 per month, and that's for a decent but not exactly nice apartment.

I could never support myself and my son on $54k here in Auburn.

I got that $50k automobile. And it’s absolutely worth it. It has warranty and I don’t need to spent few hours every month fixing things, that shouldn’t break. Land Cruiser is bad example because of very good build quality and excellent durability. I don’t know how it’s in US, but pretty much everywhere else Land Cruiser is luxury. I personally pay gladly additional 200€ in a month to not to do 4-6 hours chores.

But yeah, the food delivery is expensive. Never do this. Try to teach the young guys in the office, that cooking is not rocket science. 3 smallish pieces of okayish meat cost 5€, add some rice. Grab paprika, tomato or cucumber and you have super healthy 3€ meal. Instead of 7-10€ microwave crap from supermarket.

Financial literacy should be a topic in school. Repeated every couple years going from simple budget planning to mortgages, stock market and exotic derivatives. Plus a course about all the scams and basic computer security. Heck we even modeled back then strategies of fake company before graduation. But that was special school.

The "50k automobile" sounds like almost an aside in this conversation, but it's still bothering me.

I know there are reasons that new car prices have gone up so much in recent years, but is $50k still "reasonable" in the context of a financial literacy conversation? I too ended up going down the path of buying new cars when I became an adult, partially due to having no car repair education (something I only gained on my own later in life), partially due to living in apartments with no place to work on them early in my career, but mainly due to the incredible pressure to be able to get to work reliably in a society without adequate public transit.

But my new cars cost more like $18k (2009), $26k (2014), and $31k (2019). Each felt like a luxury at the time, having grown up with used cars generally 15-20 years older than the year we drove them in. Is $50k not still a good $20k more than a base model Camry? It sure still sounds like a luxury to me.

My BMW 328xi had tired automatic gearbox. Only Tesla wanted to have it for trade in, because the gearbox was still working more or less normal. No person would buy it in such shape, trade-in elsewhere didn’t work either. I was also driving a lot in that time. 110€ weekly gas bill. And Tesla had a small discount plus zero interest offer at the time. I signed for it and got model y long range. My first new car in whole life.

My alternatives were dire: repair the gearbox for 8k. Ditch bmw and get some used vehicle for 25k. Take some other new vehicle with 6-8% interest rate. Or buy some 15 year old crap car and spend tons of money repairing it.

Fast forward to today: I forgot broken bmw, got used to comfy, fast family car. My current workplace offers free electricity as a benefit, so I use supercharger only few times a year on vacation. Financially it looks good: gas and repair costs are gone.

I can tell only one thing: each buy or not to buy decision is very individual. If bmw wouldn’t start falling apart after 80k miles I would keep it as long as I can. I also wouldn’t buy Tesla in first place if somebody else would buy bmw. I wouldn’t need a car at all if I had no relative to care for 30 miles away.

I buy a half-cow from a rancher every 6-7 months. I prepare all of my meals and all of my son's meals. I cook fresh meals for us six nights per week and take my lunch to work daily.

We eat out exactly once per week, and it's always the same place. It has counter service, so no tipping is expected.

It's the only restaurant in the area that prepares a meal better than I can at home. I know the owner, and we text each other occasionally and lift together at the same gym.

I've only had one issue at his restaurant, which was resolved by simply calling him.

My Land Cruiser costs me <$3k per year to own. That includes gas, insurance, and maintenance parts. I spent fewer than five hours on yearly maintenance for the four years I've owned it. The only exception was last year when I had to do the timing service, and that repair alone took me ~11 hours. It was much cheaper than the $2600 the import shop wanted for the repair.

I bought it because the 100 Series is probably the most reliable vehicle ever.

it's a pretty brutal version of "financial literacy" but it sounds like you had it. Not sure how you broke the cycle though; what made you aware of an alternative?

We have an entire generation of NOT poor western young adults who grew up during essentially zero % interest rates. Their parents financed lifestyles well beyond their means; that was their financial literacy education. None of your neighbours actually "bought" a $50K+ automobile. They are all paying bi-weekly (or weekly!) finance payments. Combine with our focus on immediate gratification and society is pretty messed.

And it wasn't just consumers! Nobody runnning a small business has had to figure out to make the math with double-digit business loans work for some time. Massive fiscal spending growth has also made many businesses viable on government borrowing.

My number one tools are arrogance and self-respect.

I spent a few months visiting a therapist once per week. He said my arrogance is probably the most significant driver behind my success.

Statically speaking, I should be dead, in prison, or broke with multiple illegitimate children or addicted to drugs and alcohol.

I kept telling myself that I was better than my family members and peers who made those choices. I had to distinguish myself from my entire family to succeed.

I am a hyper-critical individual and most of that criticism is towards myself. Every time I do something or make a purchase, I ask myself if I'm treating myself with respect.

My wife’s parents come from poverty (they attained middle class around when she was 8-10) and she always says there’s “people who are good at being poor and people who aren’t.” We are fortunate to make a lot of money, but even then I order delivery maybe a few times a year. I had back to back meetings the other day and was feeling sorry for myself and ordered some kabobs on Grubhub and she flipped out, lol.

Middle class poverty traps look like what you describe. I don't understand the compulsion to spend all of what you make every month, and sometimes more, either.

> I don't understand the compulsion to spend all of what you make every month, and sometimes more, either.

It's a faux 'status symbol' thing. The idiom is "Keeping up with the Joneses" (https://en.wikipedia.org/wiki/Keeping_up_with_the_Joneses) and it is a self inflicted syndrome.

A large portion of the population has poor impulse control. Many of them see nothing wrong with spending large portions of their income on discretionary expenses even when cheaper alternatives are available.

I understand where you're coming from. Some examples from people I know:

* Person making around $40K buying a $50K new vehicle

* Software engineer making $100K+ in a low cost of living area asking if $5K is a good enough down payment for a home (at least they questioned it!)

* Consultant complaining about money while taking Uber back and forth to work every day and getting all groceries delivered on Instacart

However, these examples are from people who have the means to make these poor decisions and access to credit to do so. I think you understand this from having grown up poor, but it's worth illustrating for readers who may seen your comment and blame most poorer people for their situation.

There's "poverty," and then there's poverty. The bottom 20% of households in the US make about $22K per year. People I've known working in construction get paid entirely in cash and have no credit, often having to choose between paying the water bill or the electric bill after an unforeseen emergency. At the level where you are paycheck to paycheck, assuming the paychecks are regular, you can't save for emergencies because every day is spent triaging the basics.

I don't know of the veracity of his claim, nor the definition he was using, but Bernie Sanders claimed in Omaha, NE last night that "60% of Americans are living paycheck to paycheck". If true (and it likely is for some definition of this), seems worth knowing.

That statistic is widely repeated but it is contradicted by other studies which paint a rosier picture of Americans' finances. See: https://news.ycombinator.com/item?id=42357663

The article almost got it right ‘emotions, peer pressure, temptations’ and how people spend money on things they don’t need and then got it wrong by not actually saying what’s important.

Money management and financial literacy involves psychology along with math. So does sex education like the article compares it to. Having sex or spending money is not the problem. Nor is putting fear of the two in your head from a young age or the desire for it.

As Charlie munger said - psychology should be taught from a young age. Maybe the most important topic missing from education.

Spending money isn’t bad and having sex isn’t either. But saving for a future you’ve dreamt of and sex with a loved one is better. This involves less math and sex education and more psychology and mental well being.

If you are a 30 something politician looking for a change and understand psychology, you might want to visit schools and give children hope and mental well being tips. They might vote for you in 15 years.

Hell, you might want to visit communities and give adults hope and emotional well being tips and they might vote for you now. It's not just kids who need this and frankly adults probably realize they need it more than kids.

IMO a bunch of the problem is distress and short-term thinking.

You're not planning for 1, 2, 4 weeks out if you're constantly so stressed you're only thinking about today.

And if you're so overwhelmed you're only thinking about today, you're not noticing that you're spending impulsively 5, 6, 7 times a week, and that it adds up.

That's really been the key thing, the times that I've sat down and tried to talk someone through who was struggling with their financial planning.

They never really internalized doing this sort of planning regularly, for various reasons, and are so stressed by the day to day that they do not spend time thinking about much beyond the immediate, not just in terms of finances, so they're not trying to save for a goal, or a vacation, they're just trying to get through the day and pass out, so that kind of planning and feedback of "oh I need to not do that" just doesn't happen, much less learning to stop and think before buying things.

I don't have great advice on how to use this for better outcomes, though - sometimes, just making the suggestion when asked that they start to do this sort of planning regularly has been massively helpful for people, but I have, a couple times, had people ask for advice, only for it to become clear that they were looking for a rationalization to externalize their problems - that is, any proposal which required they change their behavior was off the table.

(The above, by the way, is also, I think, why there's so much backlash about RTO and similar - a lot of people who had been mindlessly struggling through the day, had time to themselves now, and did some thinking they never had the energy to do before...)

I think the problem with "financial literacy" is that it is taught too polite, it never mentions the true fact that our society is filled with professional organizations that use deception to get your money, and the investment world, the contracting world, and the employment world are filled to the gills with unethical players on both sides that are professional liars. They pose as one and deliver another, their entire careers, and get away with it because they understand how to hide their tracks with financial complexity. The majority of humanity falls prey to these predators, and they are in fact a significant proportion of every nation's economy. Every single company that is "hard to cancel" is one of these predators, entirely successfully, and that is thanks to our lack of financial literacy.

I don't think that is really the source of the issues for most people that are bad with money.

They spend more than they earn. They don't earn enough and they spend too much.

It is like blaming Cocacola for people being fat. Yeah they probably have some diffuse structural blame for the situation at a societal level but nobody is forcing anyone to drink a litre of coke a day or to fritter away their money on takeaways instead of investing it sensibly.

Could you blame advertisers for people spending money. Maybe? Do ads even work? They don't seem to work at all in politics so I doubt they do much anywhere else.

> They spend more than they earn. They don't earn enough and they spend too much.

Yeah, because Coca Cola (and other "businesses") convince them to spend.

> Yeah they probably have some diffuse structural blame for the situation at a societal level but nobody is forcing anyone to drink a litre of coke a day

Have you seen advertisements at all?

Nobody's forcing people to see/hear them. But they're shoved in your face wherever you go.

> Could you blame advertisers for people spending money. Maybe?

Not even just maybe. You're shortselling yourself.

> They don't seem to work at all in politics so I doubt they do much anywhere else.

You might want to double check how politics use advertisements.

> Yeah, because Coca Cola (and other "businesses") convince them to spend.

It's amusing to see that a lot of people don't believe in ad, because "they don't work on me".

I think that the best lesson school should teach is to learn how to shield ourselves from ads and avoid consumerism. Not going to happen in the US for obvious reasons.

I don't think that ads don't work on me. Of course they do. But they don't make anyone do anything. They encourage, they suggest, they shape your ideas. But no number of Cocacola ads will get me to buy Cocacola because I don't like Cocacola! It tastes bad. The same applies generally: you can suggest and cajole and encourage all you like, but ultimately the decision lies with me. You aren't responsible for my decisions. If I am only aware of the brands that advertise, that is my fault for not doing any independent research before purchasing. Maybe that is fine, because it is a low impact purchase. But that is still a decision.

Ads do not make anyone do anything. Only one person is responsible for what you do: you!

BTW, accepting this is very liberating.

You can only convince someone with an argument and ads don't have arguments. Cocacola suggests they spend. It plants ideas in their heads. It puts Coke at the top of their minds. But the decision is not Coke's. Coke doesn't make them buy Coke. This is basic responsibility.

>Nobody's forcing people to see/hear them. But they're shoved in your face wherever you go.

So what? You are forced to hear or see all sorts of things in your life. That has nothing to do with whether you are ultimately responsible for your own decisions.

I think that on a societal level we should be talking about what impact these products (ultraprocessed food) have. But that is no excuse at an individual level. It is so easy to be normal: just don't eat crap food, which BTW is far more expensive than cooking your own meals.

>You might want to double check how politics use advertisements.

Hilary and Kamala outspent Trump by huge amounts and it did basically nothing. Lots of research shows that political campaign spending has little or no correlation with electoral success across many different countries.

It turns out that when decisions are important people make their own minds up, ads don't tell them what to think, and politics is important enough if you care enough to vote at all.

> You can only convince someone with an argument

That's a logical fallacy.

> ads don't have arguments

No, they have information. Often misinformation.

Let me pick just from some that Coca Cola themselves have had in the past [0]:

- "BE REALLY REFRESHED..."

- "SIGN OF GOOD TASTE"

- "It's the real thing. Coke."

- "Have a coke and a smile."

What's the common theme among these? That if you drink coca-cola, then you will be affected by good things.

[0]: https://www.coca-colacompany.com/about-us/history/history-of...

> Coke doesn't make them buy Coke.

Nope, but it certainly does convince people to buy coke.

> So what? You are forced to hear or see all sorts of things in your life. That has nothing to do with whether you are ultimately responsible for your own decisions.

You seriously think that hearing something won't affect your decision making?

So if you're standing on a sidewalk next to a road and you hear a large vehicle coming, are you going to continue doing what you do, or will you decide to avoid the danger?

And, if you do decide to avoid the danger, do you not think that someone who sees an advertisement for a product can likewise make a decision that they wouldn't have made without seeing the advertisement?

> I think that on a societal level we should be talking about what impact these products (ultraprocessed food) have.

Yes, absolutely.

> But that is no excuse at an individual level

Sure, sure.

> It is so easy to be normal: just don't eat crap food

I'm sure you're writing that with a straight face. I'm also sure you're writing it without thinking.

> just don't eat crap food, which BTW is far more expensive than cooking your own meals.

You really think that? Would you consider opportunity costs here? It's truly unconscionable that you'd make a statement like this without considering the cost in time to learn how to cook vs doing other work or relaxing, or the cost in time to actually do cooking vs paying someone else to cook while you do CEO things, or the cost in sanity if you don't like to cook.

It's also just as easy to eat crap food when you cook crap food for yourself.

> Lots of research shows that political campaign spending has little or no correlation with electoral success across many different countries.

You really think it has to do with the spending and not the message?

> It turns out that when decisions are important people make their own minds up, ads don't tell them what to think, and politics is important enough if you care enough to vote at all.*

And on the flip side of the coin there are a lot of people who go out to vote just on party lines. That's not thinking at all.

>What's the common theme among these? That if you drink coca-cola, then you will be affected by good things.

Ads serve to remind you of the advertised product (or inform you of its existence) and try to create positive associations and connotations. They show happy people drinking Coke.

None of that forces people to do anything or makes any decisions for them. Coke doesn't force itself on you. Consumers choose it.

>You seriously think that hearing something won't affect your decision making?

>So if you're standing on a sidewalk next to a road and you hear a large vehicle coming, are you going to continue doing what you do, or will you decide to avoid the danger?

It is still entirely my decision. Hearing a large vehicle doesn't force me to get out of the way.

>And, if you do decide to avoid the danger, do you not think that someone who sees an advertisement for a product can likewise make a decision that they wouldn't have made without seeing the advertisement?

Of course? But that doesn't take away their complete responsibility for their decision. If someone makes a decision on your behalf, they are responsible for the consequences of it. That isn't the case here.

>You really think that? Would you consider opportunity costs here? It's truly unconscionable that you'd make a statement like this without considering the cost in time to learn how to cook vs doing other work or relaxing, or the cost in time to actually do cooking vs paying someone else to cook while you do CEO things, or the cost in sanity if you don't like to cook.

Learning to cook isn't that hard, and the reward in time and money saved is enormous. You are slow when you start off, but you get a lot faster once you have done it a little bit. Once you can cook a few things it becomes enjoyable and easy. You quickly realise almost everything you make yourself is better than almost everything you can buy. You'll stop enjoying bought biscuits when you have had homemade. They are incomparable.

It is frankly quite weird not to be able to cook. Almost everyone has been able to do it for almost all of human history. Everyone can do it in every country. It is seemingly just Americans that act as if you're asking them to do something strange and difficult when you suggest they cook a meal.

If you are rich enough to pay for someone to cook for you that is fine. Most people are not. But many do so anyway, using takeaways and restaurants all the time. It is a huge money sink.

I am not saying you have to cook every meal. I have takeaways once or twice a week and often buy lunch. I could save more money and be healthier if I cooked (or reheated leftovers) 7 nights a week and made lunch every day. But I don't need to. I can afford to buy lunch. I don't complain about being poor. :)

On this website I see many comments from people claiming that it is more expensive to cook because you have to buy ingredients. Ingredients are cheap!

>It's also just as easy to eat crap food when you cook crap food for yourself.

That is harder than cooking healthy food. Healthy food has fewer simpler ingredients. Try buying vegetables, dairy, herbs and spices, and poultry/meat only, for a few weeks. It is not hard to cook from scratch.

You can always go back. I don't think you will.

>You really think it has to do with the spending and not the message?

I think it is evidence that advertising isn't as simple as advertising = success. Maybe some ads work, but just advertising a message doesn't necessarily work. If Clinton had spent half as much on advertising, would she have got any fewer votes? Who knows.

>And on the flip side of the coin there are a lot of people who go out to vote just on party lines. That's not thinking at all.

I think it is more likely that they have reasons that just don't correspond to the ones you think are important. It is easy to see someone voting without following the election campaigns and assume they arent thinking. But for example, they might care more about or a policy difference that hasn't changed in years. They look like a "lifelong [party]" but they are really just voting based on eg. abortion or something that has been a campaign issue the parties haven't moved their positions on for decades.

> None of that forces people to do anything or makes any decisions for them. Coke doesn't force itself on you. Consumers choose it.

You really do think that people make their own decisions. Good for you. I know that many people are incapable of making decisions and businesses abuse that to make decisions for people. Advertising is one big way that happens.

> But that doesn't take away their complete responsibility for their decision.

I never said it does. You're moving the argument.

> Learning to cook isn't that hard

Maybe for you.

Not for me either. But I know several people who couldn't cook if their life depended on it. I know someone who burned a pan trying to boil water. Oh goodness the incompetence...

> and the reward in time and money saved is enormous

I disagree. It takes me a lot longer to cook for myself for negligible monetary savings and negative time savings.

> You are slow when you start off, but you get a lot faster once you have done it a little bit

I've been cooking for myself for decades. That doesn't make me faster. I'm glad it does for you.

> On this website I see many comments from people claiming that it is more expensive to cook because you have to buy ingredients. Ingredients are cheap!

Ingredients are cheap! Well, unless they're not. Vegetables are generally cheap, meat is generally not.

But the time for buying them is not. Spend an hour driving to the store, going around the grocery store to get all of the ingredients, coming home, and putting them away. There goes an hour, an opportunity cost.

Then spend another hour to chop, cook, and clean afterward. Every day. That's a lot of time. And if you're not doing anything else for that time, great! You're "saving" money! And hopefully you're eating healthy too, but cooking at home doesn't guarantee eating healthy.

But if you could have done something else for that time, would you? Go to the gym, for example? More time with your kids. Or catch up on a book or a movie. Work on your hobby -- and add that hobby to your resume. Or, stay later at work for an extra hour of pay.

> It is easy to see someone voting ... and assume

It's better to talk to them and try to understand how or why they vote. Most of the people around me try to avoid thinking.

Down the party line because it's easy. This candidate because the other candidate is bad. That candidate because this candidate is bad. Very little thought is ever put into their own actual opinions, because all of the thinking is done for them and they're "done thinking" about it. Have you talked to people who vote?

> It is like blaming Cocacola for people being fat. > Do ads even work?

Coca-Cola spends four billion dollars a year on advertising. Generally speaking, ad revenues are in the order of trillions. It's hard to claim they don't work.

> Do ads even work? They don't seem to work at all in politics so I doubt they do much anywhere else.

Is the planet even round? It don't seem to be round everywhere I look so I doubt it is round anywhere else. :)

Please ask an LLM to explain the basics of epistemology to you.

Don't be condescending when you don't even understand the difference between a hypothesis based on a translation of an observation in one field into another, and a firm conclusion based on the same.

Absent all the other evidence we have, hypothesising that the world is flat because everywhere is locally flat would be entirely reasonable.

The underlying philosophy is also partially problematic. That is, the idea that the next generation can just budget their way out of a problematic macroeconomic situation. Houses are utterly unaffordable now compared to 30 years ago, and no amount of budgeting will change that. But "financial literacy" shifts the blame and makes it out as an individual inability to budget. It's still useful to learn about how to use a credit card, and how not to, but that is not the root cause. Besides, the big three, medical debt, and student loan debt, credit card debt, and maybe car loans could be tackled at the macro-level, too, but that would be government overbearance again, wouldn't it...

Financial literacy has tons of fallacies but this article really only covers one of them.

The research I've read on the subject, experts nowadays are tending towards preferring "just in time" teaching. If you learned about mortgages and 401ks in 12th grade, that's not much help if you don't get a 401k until you're 22 or a mortgage until you are 25.

And that shows another issue: what does anyone even mean by "financial literacy". Does it include lessons about individual stock picking? About claiming Social Security early? About optimising taxes? About checking for better insurance every few years? About college savings plans for children?

How much ground do we need to cover?

I think the biggest fallacies is 100% seperation of "there is school, then there is work".

It's stupid to think that after school no more teaching is needed. I hate that after leaving university it is difficult to find out what is taught current students, what are the new theories and tools that have been introduced in the last 10 years.

It would be much better to start working alongside being in school, so you can learn about taxes and compound interest while earning money.

People also have much better ability to learn math when they can use it for solving problems outside of the classroom: https://www.reddit.com/r/TheWire/comments/1it269l

> I think the biggest fallacies is 100% seperation of "there is school, then there is work".

A agree very strongly with this. Not so sure about your solution if pushed too young

School level education should focus on mental development and learning how to learn. Given this, applying this to learning practical skills is a lot easier.

I think that link is interesting because a lot of people are taught things, maths in particular, in ways that leave them unable to apply it. People say they never used the maths they were taught in school, but that is because they do not have the grasp of it required to apply it to real life problems. Of course, going back to my earlier point things taught in school do not have to be directly useful (funnily enough no-one suggests kids should not be taught art or literature because they are not useful) so there does seem to be a particular issue with maths.

> hate that after leaving university it is difficult to find out what is taught current students, what are the new theories and tools that have been introduced in the last 10 years.

Or to learn new subjects and fields. IN the UK it has become a lot harder than it used to be - distance learning is a lot more expensive and adult education has been cut back.

I wonder if it's because art and literature are better at teaching one how to think in and derive abstractions from more complex ideas. Math should most definitely do this as well, but I don't think is taught that way. Most of the time is spent in math classes are on procedural practice and connecting that work to think about it in an abstract way happens infrequently.

I think you are right. One reason is that people are first taught maths in primary schools where most teachers are generalists who like art and literature, but dislike maths. People start by regarding maths as a chore forced on them, so never enjoy it, and the rest follows from that.

Sure, you don’t need to know the exact details. But you should absolutely leave high school knowing that you need to think about retirement savings sooner rather than later, or you won’t have shit. I remember seeing a chart in high school related to compound interest and how much more someone who started saving earlier had by retirement. That chart was easy to grasp.

And for mortgages, you should definitely learn that renting savings you money compared to owning in a lot of situations (even after accounting for selling the house), especially if you don’t know you’ll live there more than a few years.

Like… where the fuck else is someone going to learn this if they don’t have parent smart enough to teach them that. It’s not like college covers this.

Exposure early doesn’t mean you’re an expert at managing finances when you hit adulthood. That won’t happen. But it can do enough to make you broadly aware of what you should be thinking about — which then means you can look it up more later.

But if you go by comparing yourself to others, you might think it’s normal and good to rack up credit card debt to have nicer clothes or something. You should be aware at how costly credit card debt is, and how easy it is to avoid that.

Like we’re not talking about small optimizations. There are a lot of things that can be extremely expensive and stressful for you if you don’t even know to think about those things.

Also, for topics like compounding, it can be used immediately in life. Money is a nice example, but small increments everyday leading to big changes is a foundational life lesson.

My 11 year old knows about mortgages. The longer you understand something, the better use you can make of it. Just in time delivery of mortgage math learning is borderline predatory.

When I was about 4 there was a financial downturn here. Lots lots their jobs and mortgage rates were quite high.

I still quite vividly recall watching the news with my parents, and there was a family crying in a hallway as some officials locked up the door to their apartment. Not understanding what was going on, I asked my parents why they were crying, and they said because they couldn't pay their mortgage and so they had lost their home.

Lets just say I didn't need any more lessons regarding mortgage payments.

Idk, I can't help but conclude lots of the things I learned in school were actually quite helpful. As a child for example I learned about insurance theory and that stuck with me. I didn't actually insure anything myself for at least another decade, but the theory stuck. Which is that an insurance company just smooths over the costs of a rare event that happens to one individual, by spreading it out over many individuals, none of whom know whether they will or won't be confronted with said event. And that the average cost of insurance (in a competitive market) is therefore tracking closely the average cost of the event, plus some profit and admin fees of the insurance company. Which means for most people it's not worth insuring events that you can easily cover yourself (e.g. losing your phone).

I learned these things at age 15 or so. Sure I could've learned them later, but there's something about knowledge is that it builds on earlier building blocks and compounds. When certain things 'click' in your head, they open the door to new knowledge and areas of learning. There is power in learning early, because knowledge is cumulative and compounding to some extent. It's the reason why a 40yo is a more valuable employee than a 20yo, on average.

That's not to say that every topic must come as early as possible, or that education is perfect. There's certainly better and worse ways and timing to teach personal finance for example. But I am quite happy I was introduced to some concepts sooner than later. Even just to prime myself such that, when I am reintroduced to the topic later, I feel somewhat familiar and confident to dive into it again.

Certain topics don't really connect with everyone. Virtually everything I learned as a child in Chemistry was useless because it didn't resonate with me. While my gf went on to study biochemistry, and is clueless about finance. But neither of us know whether chemistry or finance would resonate with us, before being taught the subjects. Schooling for children also has a discovery function in that sense. It's not just about teaching what sticks, it's about discovering what sticks, and what is interesting. That's why a wide breadth of subjects can be a good idea, even if a significant portion doesn't end up being meaningful to someone at that age.

If you are an American I think learning about what a 401k is, why it is good, how to calculate why it is good is really important to learn ahead of time. Then when it comes time to get a 401k, you can check and understand why it is still valuable and you can understand whatever new thing might be available. But you know what’s going on. That’s the “financial thinking”.

How about basics like : who will have better a retirement outcome at 60?

1) Bob who invests $1000/mo from age 20 to age 30, then nothing afterwards

2) Alice who starts investing $1000/mo from age 30 all the way to age 60.

3) Johnny whose mum invested $200/mo from his birth to age 18, then nothing afterwards.

Most people’s money problems would be solved if we taught them not to chase status instead of focusing on the numbers.

Financial literacy itself is quite simple: spend less than you make.

Everything else is an optimization and it’s pretty easy to learn with a few days of research.

I know this is the classical HackerNews type comment, but I honestly can’t understand why it’s so hard when there’s so much information available and so few pre-requisites (almost none) to learn about it.

> Financial literacy itself is quite simple: spend less than you make.

Maybe for the quantitatively minded Hacker News audience this is simple. But there are quite many people who have no idea how much they are spending, or sometimes even how much they are spending.

It's easy to forget if you live in tech - or even middle class - bubble, but even the most basic math is very difficult to some fraction of people.

> but even the most basic math is very difficult to some fraction of people.

That is the real problem. People need to learn maths before they can learn financial literacy.

Maybe. Or maybe there is just a certain fraction of people that are incapable of learning it. Like dyslexia, but for mathematical operations. I mean, it's not like we're not trying. Math is taught in every school at every age group and it's around us everywhere.

There is such a recognised condition with regard to arithmetic. Its called dyscalculia.

Those with it need appropriate teaching, but can end up pretty good at maths.

> Math is taught in every school at every age group and it's around us everywhere.

it is taught everywhere, but I think it is usually badly taught - more commonly badly taught than any other subject.

> But there are quite many people who have no idea how much they are spending, or sometimes even how much they are spending.

Step one would be teaching people to write down the balance of all their accounts on 12/31 of each year. Checking, savings, brokerage, and all credit card debt (including current month spending). The difference in that number over two years is your net for the year.

Your gross is going to be approximately what you report on your taxes. In reality it’ll be a bit more but this gives you an upper bound.

Except your second line is contradicted at the outset, because the largest purchase most people will make - their home - is bought on debt (a mortgage).

Now there's sound, very good reasons to do this...but the headline issue itself already forces us to deal with more complex issues.

Right there we're into issues like why is it okay to buy some things on debt but not others, how do you evaluate the time value of money etc.

All still relatively simple...but not that simple, and frequently with no obviously correct answers either.

Being frugal no longer cuts it. As basic needs cost, such as housing, continues to outpace income, financial literacy won't be enough. Unless it crosses a point where people purposefully elect government willing to address the issue.

As basic needs cost, such as housing, continues to outpace income, financial literacy won't be enough. Unless it crosses a point where people purposefully elect government willing to address the issue.

Agreed, although I would note that a large part of addressing the issue of unaffordable housing is for governments to stop actively it worse by forbidding construction.

I don't agree with this. Spend less than you earn is a big part, for sure. Without it, you'll never really get very far.

But the rest is not mere 'optimization'. There is a massive difference between someone who puts their savings into a 0% interest account and sees it eaten away by inflation and in some countries (mine) a wealth tax, and someone who puts the savings as a pre-tax investment in their retirement account, which means you don't pay taxes on your salary, and in some countries (mine) don't pay taxes on the stock returns or on the equity as a wealth tax, and can get a 10% nominal annual return and see your money double >5 times over a 40 year career.

In my country the saver (A) versus the investor (B) who puts $1k in savings or a retirement fund at age 25 and liquidates at age 65 looks like this:

A) Saver: $1k salary is $500 take home pay (50% marginal tax of last bit of income). 0% interest rate at the bank. You pay a 2% effective wealth tax per year. That means $222 is left at age 65. Prices in this time went up by 3% a year, meaning what is left is the equivalent of $68 in today's dollars.

B) investor: $1k salary goes pre-tax into retirement account. You get a 10% return each year, so at 65 you have 45k. You pay no wealth tax or return taxes in the retirement account. You then pay it out as a personal income at a reduced retirement rate of 35%, meaning you have about 30k left. In today's dollars that's about 10k.

So $10000 vs $68. That's not optimization, it's the difference between gaining 10x versus losing 93% of it, or the difference between everything and nothing.

Country of example is NL. Discrepancies are bigger or smaller elsewhere depending on tax policies, but generally the difference will remain orders of magnitude.

I do agree that it's pretty easy to learn.

> Saver: $1k salary is $500 take home pay (50% marginal tax of last bit of income). 0% interest rate at the bank. You pay a 2% effective wealth tax per year.

Wait, what? Under that tax regime, you might as well squirrel away that money under your mattress; you'd at least have the equivalent of $300 left after 40 years.

Apparently there was a ruling by the Dutch supreme court equivalent (the Hoge Raad) last year that if your actual return is lower than the notional return (assumed ~6%), then you're supposed to be taxed on your actual return.

https://www.belastingdienst.nl/wps/wcm/connect/en/income-in-...

> Financial literacy itself is quite simple: spend less than you make.

I'd disagree with this. Financial literacy includes understanding how /how much to save as well. Too many people spend less than what they earn, but would be screwed if an emergency hit, because they have basically 0 savings/emergency fund.

And the consequences of this are dire, I've seen people in their 70s working because they basically cannot afford to not work due to a lack of savings.

> ...I honestly can’t understand why it’s so hard...

You're pretty close, you touched on all the major points in your comment. You suggested people not to chase status. But a lot of people spend their whole lives and all the resources at their disposal chasing status. All they understand, want or need is status. They are status chasing people.

You try teaching them not to chase status and it won't work. This is also what makes financial literacy so hard - people have these instincts that don't care about longer term material comfort even a little bit. They're calibrated for a world where "capital" is a stick with a rock tied to it and maybe a nice cave. There are these hang-overs from the old times where people's mind and body are strongly conditioned to only be sensitive to their current social status and they're willing to burn their entire bank account to get it now.

Watching such people up close when they are also intelligent is a fascinating experience. They know that they're not doing financially optimal things. They don't care. They'd eat nails and go without sleep if they thought that would make them look better than their peers. Being poor in 12 months time doesn't register as a threat intellectually or emotionally.

Note that even the people who are good at investing usually cheat by using their emotions in weird ways.

Nah, that's reductive to the point of being useless. It's like saying "losing weight is simple: eat fewer calories than you burn". It's both completely correct and completely unhelpful.

Broadly, everybody realises that you will accumulate money if you spend less than you earn. That's not financial literacy though – how do you do that? How do you know how much you are earning, and how much you are spending? How can you figure out how to spend less?

Almost 30% of US adults are level 1 or below on the PIAAC numeracy scale – a level at which you can perform only the most basic arithmetic. It is, for many people, far from "pretty easy" or "quite simple".

How is “losing weight is simple: eat fewer calories than you burn” unhelpful? I’m genuinely asking, and want to understand how to empathize better.

It seems like a lot of people don’t make weight loss progress because they never internalize that fact and seem to “fight it” psychologically.

It's not simple when big decisions have to be made, like investments, car purchases/loans, and home-related stuff. Main thing people don't seem to understand is that money upfront is worth more than money later.

> Education is particularly susceptible to flavor-of-the-month initiatives that promise revolutionary changes but deliver minimal results.

Then the article proposes another flavor-of-the-month solution that promise revolutionary changes - if only each student would start a business, then he would HAVE to learn math and everything will be solved.

Ignoring the issues of costs and scalability, why not try something simpler first? IMO teaching how to handle money is something that should parents start even before their kids go to school. Give them a little pocket money so they have some agency, and they will soon learn what they can buy now and how to save for a future.

Yea, seems a bit weird honestly. Starting a business is incredibly hard. And the financial part of it is just a tiny part of why it's hard. You also have to find an idea of a service/product and marketing to name just two that will kill your company before it ever got a single customer.

The article isn't suggesting kids start the next google. They do have two big structural benefits you don't have, though:

1. Their customers love them or at least know them well and are sympathetic. Not many neighbours or parents will walk past the lemonade stand or ring the health inspectors. People will be their customers just to be nice and to support them.

2. They have no costs and unlimited time. They don't pay rent or board, they don't have jobs and they don't have dependants.

I did that actually!

I had a large project in high school where we went through the process of starting a company, maybe selling a single knitted sock to someone, balancing the books, and closing the business. Not as simulated tasks but through the proper process. Other schools did the same.

It didn't actually teach me much, and it took up a vast amount of school time. I preferred the pure class that explained the economic theory and went through calculation exercises. I remember that much more clearly.

It's odd. The article starts by really highlighting that the school system is a bit broken in teaching the basics but then suggests adding extra stuff on top of it rather than suggesting or diagnosing the actual issue.

> It’s like installing a fancy security system on a house with no foundation.

The article said it pretty well... for itself.

> Give them a little pocket money so they have some agency

This is great. My parents did it; most of my friends had the same. I will do it when I have children. The amount does not even matter. I think I had a $2 a month, and I started to proudly save up for toys or hold off on the lure of sweets. (not that the amount every accumulated to buy anything)

My country's stock exchange runs a play platform for highschoolers. It runs 15 week seasons in line with school terms, participants get 50k play money, and can make unlimited trades from the top 300 stocks using market data from that period.

The jump from opening a bank account and basic financial literacy to share trading is a pretty big one but it's hands on and more engaging than most lessons.

https://www.asx.com.au/investors/investment-tools-and-resour...

This article contradicts itself on corrective measures.

As the article states, people still go into debt even when they have real world experiences with financial transactions.

Vulnerabilities will always be exploited if there is something to gain from it. Rules can be implemented to protect the vulnerable.

> Teaching financial concepts in a classroom is like teaching swimming with PowerPoint slides. You can explain the theory of the butterfly stroke all day, but at some point you need to get in the water. And with money, the water is always cold, deep, and full of currents that weren’t in the textbook.

It is totally true that these extra-mathematical factors have a big part to play how we spend and how we save. If you’re in a certain culture that expects a certain level of spending, it’s hard to take yourself out of that.

I still don’t see even adults with a good idea of basic financial things. How much does it cost to buy a house? How does a monthly payment change with interest rates? How do you become eligible for Social Security?

You really need to keep these several-dimensional functions in your head. At the least, a good grasp of algebra is required.

> I still don’t see even adults with a good idea of basic financial things. How much does it cost to buy a house?

Big part of that is because the answer is "twice as much as 10 years ago", which is simultaneously mindboggling, appalling, and hard to keep track of.

The list price of a house going up is a big part of it.

But I don't think people actually have an idea of how much more a house of the same price costs when interest rates go from 2.5% to 7%. For a million dollar house, that's an extra thousand or two a month.

One of the best lessons I had was in my senior year of high school with my economics teacher. We did a project where we had to pick a career and research the average salary. Then he showed us how much taxes would be taken out of that pay check and you had your monthly spend. Then you researched a home, car, budget for food and if you could afford it, saving for retirement. Suddenly you saw how quickly the money disappeared and reality hit me. There were so many other factors you could have added in that would suddenly find yourself in negative each month like student loan payments and various "wants"

I had a health class in high school that taught things like sex ed, first aid, we even learned CPR (the teacher was also an EMT). I remember one class where we had to bring in newspapers and we drew scenarios like "you are divorced and have sole custody of your child, you make $X/hr" and we had to basically find an apartment in the paper and see if we could make it work, adding in things like food, utilities, etc. IIRC I wasn't able to get my monthly expenses below what I was hypothetically making...

Great article. I think it’s very true.

I felt I was failed by education/parents with regard to financial literacy, because the first time I ever had real money in my life was when I went to university the first time and I had no idea how to manage it, and I ended up homeless for some time.

Now I’m a parent myself, I decided I’d teach my kids about money by actually giving them money. $100 each per fortnight. I made both kids set up savings accounts that earned interest, and they had to save $50 a fortnight. The other $50 I said they could spend on whatever they liked, but that I would no longer pay for anything related to their gaming (ie, Xbox subscriptions etc), I don’t buy them toys, or nice snacks, or fancy branded clothes - that’s all stuff they now need to save for and buy themselves with the money they are given. One kid has ADHD and the other kid is close to neurotypical. The neurotypical kid certainly learned how to manage money quicker. His savings account remained perfect, he accumulated interest as well, and can always afford his subscriptions etc. he barely ever even spends the $50 that he’s allowed to do anything with, but when he wants to use money when going out with friends etc, he just always has money, and he even keeps some cash on hand as well.

The other kid on the other hand has taken a longer time to understand but, there’s absolutely no way an ADHD kid would learn without real money to manage in my opinion and I think they benefit from having the freedom to make mistakes with money. He would spent his $50 within about 10seconds of receiving it, generally on stupid shit from Amazon. Then he never had money for his gaming subscriptions which would result in massive meltdowns when he couldn’t play his games, and then he never had money to do stuff with friends when he wanted to. He was always the “poor kid”. Then, even though he wasn’t supposed to, he withdrew cash from his savings to pay for subscriptions, losing interest etc, and then also having no savings. It took about a year, but he’s finally learned to stop buying stupid shit on Amazon. He still can’t seem to save the way his brother can, but he saves for a couple of months at a time, and then buys the next computer part he wants, and he always sets aside the money for his game subscriptions now as well. He also does sometimes put extra little bits of money in his savings when he’s particularly motivated for a more expensive piece of computer, but he still often withdraws for stupid small shit. He also compares his spending behaviour to his brothers and he realises that his brother is “rich” because he doesn’t spend money.

It’s an expensive lesson for me to teach them, but, I genuinely think that it has helped them both learn real life lessons with regard to money. I think the unfortunate thing is that the people who really need to learn money, are the ones that don’t have it. I’m very lucky that I’m in a position to be able to afford to let me kids experiment with $100 each a fortnight. There’s people out there who could probably afford more than that, but I think that in the real world, a large majority of people cannot afford to give their kids that learning opportunity. However, for me, having once been homeless, and then many years later having done an MBA which included finance, I realised the best way to help my own kids learn to manage money was to give them some money to manage.

Would you mind sharing the age of your kids when you started this approach?

Sure. When we started, the younger son was 8 years old and the older son was 10 years old.

At first I did it with cash and they didn’t have bank accounts, but I found the problem was the younger one would “misplace” his savings money all the time. And I also found that the ADHD was sly and would “find” the younger brothers misplaced money and spend it, but in such a way that I couldn’t prove it. So I just went and opened bank accounts for them. Who has cash these days anyway! It’s been much better since.

~$5000 per year, which you would have likely spent anyway just giving them things, in order to hammer in solid financial literacy skills seems like a really good return on investment. Especially for the ADHD one - even if he can't or won't save like his brother I think you are immunizing him against the worst kind of financial ruin in the future.

Yes - I don’t buy them extra things through out the year. I also only top up their bus cards for public transport once every 3 or 4 months (sometimes they use their bus cards to pay for their friends) and if they run out of bus money, then they have to either walk, or top it up with their own money.

The ADHD kid walks.

It is beneficial for your kids to have the opportunity to make mistakes with the small amount of money they receive. These lessons learned will save them from future troubles. 50 bucks may not be much, but it’s enough to keep it real.

This is fantastic and inspiring, thanks for sharing it! I'll definitely share this with my parent friends. There's no better way to learn some stuff aside from it happening to you, all driven by incentives.

Do you boost the interest of their savings account to make more attractive?

No, because their savings accounts actually have fairly decent interest rates for kids accounts. However, I do give them extra money on birthdays and Christmas. Also, when they do really good things, (ie, achieve something good at school) they always get a cash bonus.

Interestingly, even though the the non-ADHD one does better at saving, he doesn’t understand the concept of interest yet. However, the ADHD one clicked on very quickly to how interest works, and his bank has a policy that if you withdraw from your savings more than once in a month, you lose the interest for that month. So now the older one has started to plan withdrawals around that idea. It’s not the exact lesson I would like him to learn, I’d prefer that he just didn’t withdraw. But I like that he’s coming up with his own strategy to manage his money (and impulse control issues).

When my parents got me a bank account as a kid, the banker explained to me how great compound interest is. Then I asked what my APR is, and she said 0.01% but I still make some money off my $500, then I asked if it's rounded up or down... A few months later, I took out all the money and invested it in my favorite company Apple, though my dad talked me into diversifying it.

I learned as a kid that savings accounts are a scam, and that's still what I think. Even if it's 4% today, that's basically losing wealth each month, and I'm not putting anything more than emergency money in there.

I do much the same: slightly less but with no rule about saving. Both have learned to handle money reasonably well.

Its fits in with my general approach to parenting and education too - generally encouraging autonomy and making their own choices, "home educated" up to 16 (GCSEs - UK high school exams), managing their time (just as valuable as money).

"I think the unfortunate thing is that the people who really need to learn money, are the ones that don’t have it"

and their parents have the same problem so cannot teach it either.

That said being rich can make you stupid about money too, as it can lead people to think they have an endless flow, especially if they have indulgent parents.

> That said being rich can make you stupid about money too, as it can lead people to think they have an endless flow, especially if they have indulgent parents.

I agree. It’s difficult to strike the balance right. I definitely don’t think there is a need for me to give my kids more money than they already get. Particularly because they’re sort of lazy when it comes to household chores, especially the neurotypical kid - he’s diabolically lazy. The money I give is independent of “chores”. It’s literally a lesson in an of itself. If I want them to do a job for me, ie, gardening etc, I’ll offer them a similar amount of money to what I’d pay someone else to do it. The $100 a fortnight is basically like my own version of a universal basic income for kids. It hasn’t destroyed their motivation to earn money in other ways, in fact, I think it’s motivated them to want to get good paying jobs etc, so they can have more money.

They’re still relatively young though, so I will be interesting to see how they do once they reach adulthood and have real adult responsibilities and bills to pay etc.

This is a sobering account. Thank you for sharing.

I’m curious, is the ADHD child receiving treatment? On medication?

I wish more people understood how this goes, when their answer to every social ill is “people need to do better” and there’s no allowance for those who don’t possess the same capacity.

Unfortunately he does not receive the typical ADHD treatment. As he also has a tic disorder (Tourette’s). Standard ADHD medications are contraindicated in people with tic disorders because they exacerbate tics.

This is why some people who have ADHD actually get worse on medication, as they may also have mild cases of Tourette’s that haven’t been identified. Tourette’s and ADHD commonly occur together along with OCD. I call it the ADHD trifecta. My son has behaviours consistent with all three (the most overlapping symptom being impulse control (or also known as compulsive behaviours). It’s a difficult combination of behaviours to manage, and with Tourette’s in particular, it’s not just verbal tics or motor tics, it’s also severe disinhibition (think having no filter), and uncontrollable rage (also because of the lack of filter). So the ADHD medication makes all those behaviours worse.

He instead has off label medications. Clonidine, and a SNRI (I hate that he is on an SNRI, but he’s been on it for 4 years and before he was on it, life was really extremely distressing and hard most of the time so I often remind myself of those times when I feel guilty that he’s been on an SNRI for as long as he has).

So a lot of the management of his ADHD has to be through behavioural approaches since we can’t use medication to help. Hence doing things like this money thing, and him suffering the consequences of his poor money choices.

He’s lucky to have you looking out for him.

My most terrible conclusion is that if everyone had perfect financial literacy, the world would be even worse for the younger generation, who's never get any change without some systemic reset to catch up.

So, personally I give everyone I know the standard advice (basket of S&P 500, never pick your own stocks, get some T bills for diversity, etc), I think in the long run this is creating a terrible economy for the young, and the old will eventually pay for it.

This is a widely known trope in the financial circles, often stated as what if everyone only invested in indexes. Firstly for context, we're not even remotely close to a situation like it, with all the rage index investing is today, we're still somewhere in the ballpark of half and half for passive and active investing. Secondly, it's not really a problem, and actually the more financially literate you are, the more you could benefit from that situation. If everyone invests in index funds then the companies in the index get pushed up while the companies that are not in get pushed down. This means that there will be many good companies that are undervalued outside of the index and anyone with the literacy to notice that can buy them and then benefit.

It's not about the fact that you don't have an edge against your peers with financial literacy, you'll always have that. It's the fact that you won't have an edge against your median efficiency elders, who are simply leveraging a much larger capital.

Closing a gap by 2% per year, even over 50 years still means less than tripling an amount (1.02 ^ 50 ~ 2.7). Your edge needs to be significant for exponentiation to work within your lifetime.

The article goes on to make better arguments than the comments imply, but still treats the opposition as a strawman. Showing a student how compound interest works on one loan or account is microeconomics and it was never as ineffective as teaching kids smoking public health statistics which is more like teaching macroeconomics and expecting children to be afraid they will ruin the GDP.

> What makes financial decisions hard isn’t the math.

To be fair, I've met quite a few people who also struggle with the math. To the Hacker News audience this seems unfathomable, but the very idea that you end up paying much more with the "pay only 9.99 €/month)!" deal is completely alien to many people. Or even if they understand it in principle, it never occurs to them to compare the actual numbers. Or even if they compare the actual numbers, it doesn't occur to them to add the numbers up to see how much extra they are spending on interests in total.

Many people are quite stupid when it comes to even the most basic math. Or not even math, but just thinking of or comparing numbers.

> What makes financial decisions hard isn’t the math. > Most personal finance math is basic arithmetic – the same arithmetic that most of our students currently struggle with.

These sentences are literally next to each other! The entire article can be disregarded.

As someone who grew up in a poor area (not in US, but not really relevant, I think), the main lesson that something like home economics/financial literacy classes need to teach is basically the role model / "this is actually possible" thing.

Basically, some of the following:

For poor kids;

Don't train or focus on a career that doesn't pay well; don't even consider it, you can't afford it. That's someone else's problem. Maybe you can do it later when you 'make it'.

(for example - low end - nursing, teaching, etc, high end - fashion, art, photography. do these after you make money)

Yes, you can make it, just because your neighbours are poor doesn't mean that you have to be

You will lose friends if you are ambitious, this is normal

etc.

Some people seem to intuitively have this understanding (personality traits that are a bit more individual, I guess), others don't.

The problem of course is that the state school system basically can't do this, because there's a conflict of interest, someone needs to do the jobs that don't make sense for an individual to pursue.

> They do it because everyone they know is going to college, because their parents expect it, because they’ve been told their whole lives that education is always worth it

Jm2c but I would not really recommend, not blindly at least, a degree to many kids today. You really like it/care? Good. Go for it.

In my countries, Italy/Poland, the average plumber or electrician makes more than the average law or economics degree.

You want to make very good money? You're more likely to do so running a bakery in northern Italy where there's very few of them.

My SO lives in Reggio Emilia, a city of 150k+ it's impossible to get a decent croissant for breakfast, it's crazy.

The new generations will have relatively low competition for blue collar jobs, but plenty in higher education.

It's especially easy on those that want to be self employed to find opportunities.

Yet, every time I say those things there will be the usual person bashing me that a very good lawyer or engineer will make more than those jobs...sure, true. But the largest majority won't.

“What [schools are] bad at is teaching people to win in adversarial environments. And they're also bad at the meta-game of reminding someone that knowing the basic mechanics of some process does not make them an expert, but does make them a mark. Said differently: if you know which hands win in poker, thinking that this means you know how to play the game makes you a mark, not an expert.”

https://capitalgains.thediff.co/p/teachingfinance

“And it's hard for a teacher to end a class by telling students that they got an A+ in financial literacy and are now equipped to get ripped off in entirely new ways by an entirely different set of adversaries. But it's also impossible to create a repeatable standardized test that accurately simulates such an adversarial environment, because any time everyone gets the same correct answer, that answer would need to become wrong.”

I took a one semester class my soph year in high school called Business English. It was basic stuff about money, jobs and banking skills. (by this I mean how to access a bank account, how to try to determine what field to enter for work and how to get training and setting up a budget.) It was a very helpful class for me because my parents were not helpful in any of these subjects.

One of the lessons the teacher gave one day has never left me: depending on your income, if you decide to have a new house, you may have to drive a used car. This very simplistic statement kept me out of a lot of financial trouble down through the years.

When the company I worked for filed for bankruptcy our wages and benefits were drastically cut. Sadly, a third of my co-workers were forced into bankruptcy and some of them found themselves in divorce court. (remember, money is one of the biggest causes of divorce still today.)

I have several impoverished family members and for none of them is it because of the math or initial lack of mobey.

It is because of their inability to believe that negative consequences could happen to them so they make one stupid decision after another.

There is no training I know of that can fix that. Certainly the School of hard knocks has not.

The best way to teach financial literacy is to pay everyone more, and make economic culture participatory and cumulative - not the current bizarre and toxic zero-sum system which elevates mediocre and/or damaged people who compensate for low self-esteem with inherited status and predatory power games.

Teens should start a business? With what? Most families in the US are dirt poor, and even setting up a basic YouTube or Etsy business is going to need a couple of hundred dollars of startup investment for materials, creative software, something...

This will shock many, but tens of millions of families can't afford to take a risk like that.

And one of the things that defines millennial culture is that many millennials already have a main job, a side gig, and some kind of online hustle, and still aren't earning enough to break even.

Society needs nurses and plumbers. Not more dropshippers and influencers.

The US has the highest average household income in the world. There are tens of millions of households that can help their kids start a "business" whether it requires high capital investment or low. Some people will be able to buy a 3D printer and make something cool. Many will create lemonade stands. That is fine.

>And one of the things that defines millennial culture is that many millennials already have a main job, a side gig, and some kind of online hustle, and still aren't earning enough to break even.

Online bubble, I think, unless my experience is highly atypical. The vast, vast majority of people just have one normal job.

While teaching the "theoretical stuff" may not help much, playing financial games can help ingrain the knowledge much better. Perhaps because the feeling is more real and the emotions more tangible.

I've played games like Build Your Stax [1], Stock Market Game [2], SPENT [3] and other budget games with my son and he really likes them. He quickly broke the record and beat me in the games and was very proud of himself :)

[1] https://buildyourstax.com/ [2] https://www.stockmarketgame.org/ [3] https://playspent.org

The core tenant of this I'd rather push is project based learning. Otherwise it sounds a bit too much like the point of education is to do a job and earn money.

Also touched on is failure, you can't learn a business with real money without failing to make any money, and failure is important and just as much of a passing grade in a project context IMO, depending on grasping the failure.

>Teaching kids financial literacy without real money is like teaching swimming with PowerPoint slides. And we all know how that ends.

The opening statement of this article is fundamentally flawed. I didn't learn to swim as a child, and unironically, watching presentations of "how to swim for absolute beginners" on YouTube got me over the initial challenge of getting into a pool. I can now comfortably swim in the ocean.

This isn't just anecdotal. Go to YouTube, and search "learn to swim", and you'll see videos with millions of views, full of comments describing similar learning journeys.

You can teach people swimming in these formats.

You can also frame this as a strong-link problem. For high-aptitude students, one might argue that it's a waste to have them drill basic financial literacy when instead they need to be learning more abstract mathematics to follow pioneers like Newton, Turing, and Pearson in creating entire new disciplines.

Now, I want to constrain my thought to just the high-aptitude students with possible futures in science and engineering. I can understand educators trying to make math useful for those who won't need algebra to do calculus, calculus to do physics, and physics to do engineering.

I don't really get that point. We have decided against removing the prodigies from the normal environment so its not at all uncommon to see someone who was expected to be the most promising for society held back by a basic social or economic trap they should have avoided if they valued putting the slightest thought into our mundane things.

> We’re making the same mistake with money that we once made with abstinence-only sex education: pretending that pure knowledge will triumph over emotion, peer pressure, and real-world temptations. Spoiler alert: it won’t.

Funny things, couple weeks ago, the most upvoted links was 'its a knowledge proble or is it'

https://josvisser.substack.com/p/its-a-knowledge-problem-or-...

I fully agree that only experience creates a forcing function to learn, most kids who were 'dull' kids in school ends up learning how to make good decisions for themselves after a decade of work experience. The 'smart' kids who fall for crypto/nft scams probably aren't that smart.

It might be slightly illegal for kids to enter into contracts, which is a prerequisite for running a business. There is also the small matter of child labor laws (also intersects with minors not allowed to sign contracts?). I'm not arguing from a moral standpoint, but just the bottlenecks to make this happen. But we live in interesting times, looks like most of the regulatory authorities are gone, perhaps this bottleneck to enterprising child entrepreneurs and big businesses looking for cheap labor will be removed?

I also wonder, child labor was commom for pretty much most of human history, but we have a decent history of child labor during industrial times. How many of them became enterpreneurs? Or were successful financially (better than their peers who weren't child laborers) because they got early experiential learning?

2 examples from that time, Andrew Carnegie (experiential learning) and Rockefeller (School).

Andrew Carnegie (I guess he was 12?): Soon after this Mr. John Hay, a fellow Scotch manufacturer of bobbins in Allegheny City, needed a boy, and asked whether I would not go into his service. I went, and received two dollars per week; but at first the work was even more irksome than the factory. I had to run a small steam-engine and to fire the boiler in the cellar of the bobbin factory. It was too much for me. I found myself night after night, sitting up in bed trying the steam gauges, fearing at one time that the steam was too low and that the workers above would complain that they had not power enough, and at another time that the steam was too high and that the boiler might burst.

John D. Rockefeller: He attended Cleveland's Central High School, the first high school in Cleveland and the first free public high school west of the Alleghenies. Then he took a ten-week business course at Folsom's Commercial College, where he studied bookkeeping. In September 1855, when Rockefeller was sixteen, he got his first job as an assistant bookkeeper working for a small produce commission firm in Cleveland called Hewitt & Tuttle.[

Do you have any books you'd recommend on Rockefeller and Carnegie?

I haven't read any books about them. The Men Who Built America is a good show to watch. On youtube: https://www.youtube.com/watch?v=DydmaedDIhE

How about you teach kids basic concepts like how to balance a checkbook and how to balance expenses based on monthly income.

It's basic addition and subtraction.

Compound interest is magic. But, people obsess with rate of return which is unsustainable when the long term market rate tends to 6-7%. I appreciate tech stocks do better, I'm just observing a contradiction inherent in things.

Balancing interest earned against interest paid can be confronting for some people. Debt is not always bad. It depends.

Margaret Thatcher is responsible for a fucktonne of misunderstanding about the national economy because of trite truisms about domestic economy. She hated Keynesians and talked a lot to LSE economists who we'd now critique quite harshly. She'd have hated MMT.

Thatcher also laid the seeds of the ruin that is British housing by forcing councils to sell off public housing and refusing to allow them to reinvest the profits in more housing, and created the surge in demand for petty bourgeois share holding in the privatised former national utilities, and rentier behaviour. She utterly fucked over the state. We're living in the ashes of Thatcher destroying all the post war social uplift, and taking her asset stripping model worldwide.

I ran away to Australia in the peak of this mania to arrive into a state launching the same madness. Housing is totally awful here for young people. I'm fine, in the great Australian tradition of people my age who own their home and have huge retirement savings, it's "fuck you, I've got mine" voting here.

Isn't core financial literacy a bit more basic than that? Like how to pay your bills? I wasn't taught any of these practicalities in school, and it I suppose it could have been useful.

Like everything else, without practice you cannot not really learn.

Financial education in the US is like teaching how to eat healthy to people surrounded by fast food and advertising since they're born. There are other forces at play.

The fallacy here is that it’s not an either or proposition.

You need practical experience but supported with theory along the way. Just like with basically anything else

This is a ridiculously shallow article all based on arguing against a strawman that teaching financial literacy will, on its own, lead students to make wise money decisions.

Yeah, no shit. It's well understood that classroom education can not and does not substitute for real world experience in any way. There is literally nothing the education system can do that will lead to young people making wise financial decisions on its own. On the other hand, teaching them financial literacy is not "bikeshedding" as the article suggests. Financial literacy is not just some esoteric application of basic math that is somehow distracting from the fundamentals. The modern world is set up to prey on the naive by extracting usurious interest rates. Kids absolutely should be taught about this, even if they still have to go through a few hard knocks for it to actually sink in.

The push for financial literacy as a panacea for systemic economic instability is a neoliberal sleight of hand. It’s a moral cop-out, allowing institutions to pathologize poverty while absolving themselves of designing systems that prey on human behavior.

Consider retirement: we dismantled pensions, replaced them with 401(k)s, and now blame individuals for not magically becoming Warren Buffett. Or student loans: we tell 18-year-olds to “shop around” for degrees as if education is a commodity, not a societal investment. Healthcare? “Just be a savvy HSA optimizer!” Meanwhile, the system is a Skinner box of late-stage capitalism—overdraft fees, algorithmic rent hikes, predatory loans—all while whispering, “You should’ve read the fine print.”

Behavioral economics has shown we’re not rational actors. Yet the system demands perfect foresight: save exactly enough, borrow exactly enough, die just before your 401(k) runs out. When people fail (and they do, because life is stochastic), we scold them for not being “literate” enough, rather than asking why basic survival requires a PhD in personal finance.

This isn’t empowerment—it’s exploitation gaslit as morality. Countries with robust social safety nets don’t obsess over teaching kids to day-trade; they structure defaults that work for humans. Financial literacy has value, but weaponizing it to justify atomizing every risk onto individuals? That’s not education. That’s a rigged game wearing a meritocratic mask.

Great point. I saw a short YouTube video the other day in which a lady was describing how saving $100 a month and investing it in an index fund would turn into $1 million after 50 years or so...

The numbers seem to add up but this strategy all rests on society's ability to maintain what has been the biggest legalized economic ponzi in the history of mankind... Plus, it doesn't factor in inflation. A 10% annual gain means nothing at all if real inflation is 10%. Note that the inflation compounds as well!

There are all these risks and dysfunctions that are covered up and simplified down in the language. Whenever you're discussing long term events and you say the word "dollar", you're talking about an extremely vague depreciating unit... It's not a term that's fit for discussing long term events. Dollars might not even exist in 20 years. All fiat currencies in history have gone to 0... Literally hundreds of them across different civilizations. USD has only really been a fiat currency since 1971... It's not that long ago and it has lost most of its value since then.

Now it seems to be held together by sheer insanity; psyops, shady international organizations, geopolitical machinations, massive-scale coercion and deprivation of opportunities through regulations, weaponizing taxpayer dollars against taxpayers... Always accompanied with gaslighting of course. We have fraud disguised as aid, sin disguised as morals.

Was with you right up to the “entrepreneur” part. No, fawning obeisance to entrepreneurship isn’t the answer, sorry.

to me the author just rediscovered montessori method https://en.wikipedia.org/wiki/Montessori_education

Careful, as that can be a slippery slope: that exact expression, “financial literacy”, has been used in Europe as a way to push ideology - all economy is political.

Will they teach the fallacy that economic agents make rational choices?

Will they teach the fallacy that running a country is the same as running a household or a grocery store (in terms of supposed thrift)?

Will they teach that market growth guaranteedly means improved living standards for all?

Will they overwhelm students with technical jargon to make contestable theories seem irrefutable?

Will they present market dynamics as "natural laws" rather than human constructions?

Will they teach that widespread economic practices must be correct simply because they're common?

Will they equate market freedom with political freedom as if they're the same thing?

Finally, will they teach Keynesian Economics or Neoliberal Economics?

Furthermore, will they teach austerity is mathematically self-defeating and in 95% of cases, will fail?

Jesus Christ mate, they're talking about personal finance, not political economy.

Basic personal finance, like interest rates, simple statistics (namely about casinos), sure.

BUT, during the European austerity footgun days, they put an animated talking bear on tv teaching this “financial literacy” and illustrating the “run your country as a thrifty household” tale as meritorious and not a fallacy, among other stuff like that.

I saw this YouTube video recently that said there are four main categories to spending money:

A. Your own money A1. On yourself A2. On others (not necessarily the same others)

B. Other people's money B1. On you B2. On others (not necessarily the same others)

It is kind of a wordy way to describe the principal agent problem.

Problem is that we can't really wrap our heads around large numbers. I get overwhelmed just thinking about how the relatively small town I live in manages its finances. I don't think I have the mental model to fit how the US economy functions much less how it should function.

Talk to some political scientists. You're never getting a polity that understands the issues and votes largely based on policy. Won't happen, not even remotely close. They'll always be voting on forehead-slappingly dumb shit like "running government like a business is a good idea", or more likely on a dozen extremely stupid misconceptions at once, plus just "do I perceive that bad things are happening, generally, regardless of whether they have anything to do with the office I'm voting for".

I've seen that point made before. In Portugal for example the left wing parties are openly against financial literacy in schools exactly because they say it is political. I get the point, if you're a socialist or a communist, having everyone participating in the stock market puts your goal further away. They also have an argument that financial literacy is correlated with losing money on the stock market. In general I don't think it's that separate of an issue, even though I'm not as left.

It seems you have studied that exact tv talking bear’s lesson very well :D

I didn't get the reference unfortunately.

Unfortunately.

May I recommend a book by an Economics Nobel Prize winner?

Here:

"Arguing with Zombies: Economics, Politics, and the Fight for a Better Future" by Paul Krugman (2020)

And maybe even better:

"Austerity: The History of a Dangerous Idea" by Mark Blyth - 2013

I'm not sure I get your point still, I was merely describing the arguments of one side of the aisle of my country, did it give you the impression I'm somehow pro austerity? I'm not sure how you made that jump. And you still didn't explain the bear reference. Descriptive comments aren't endorsing something.

Recommending two books to someone that asks you to explain a short expression is a bit rich though. Good luck with that.

Simple: pro-austerity people made the bear show and used similar blanket generalizations to yours.

The books debunked them.

I'm not pro austerity! I didn't even make any generalizations, my whole comment is about the position of a few political parties in my country. Are you unable to distinguish relaying the position of a third party from relaying your own beliefs?

Is the bear show the kitchen TV series? I'm still trying to understand what the heck you are referencing but I'm starting to realize you are very difficult to talk to so this is me giving up. I'm sorry I don't have more patience you seem like you know some stuff but are too preoccupied with sounding smart rather than speaking plainly.

Ad hominem all you want - but I don’t really know what to say anymore.

Did you read our complete chain of comments / debate?

> They also have an argument that financial literacy is correlated with losing money on the stock market.

I think that the issue here is the definition of financial literacy that classifies people who effectively engage in gambling "financially literate".

It is political of course, because the left would like to provide to the financially illiterates, such that they don’t have to manage their own money. If everyone is saving/investing, the socialist system is mostly redundant (except for the extremely poor, non-working, ill or disabled people).

Sure: poor people are usually guilty of being poor.

Nice thinking ;)

>Will they teach the fallacy that economic agents make rational choices?

The alternative ideology (ies?) you sound like you're proposing assumes that economic agents do not make rational choices, or at least they don't on average. But if that were true we would all be better off making as few choices as possible, because most possible exchanges are not beneficial to both parties. I just don't see evidence for that at all.

There are several books with the word “Zombie” on the title that can specifically teach you exactly about that!

Some of them actually authored by Economics Nobel Prize winners ;)

Here:

"Arguing with Zombies: Economics, Politics, and the Fight for a Better Future" by Paul Krugman (2020)

"Zombie Economics: How Dead Ideas Still Walk Among Us" by John Quiggin (2010)

Bonus:

"Predictably Irrational" by Dan Ariely - 2008

"The Myth of the Rational Market" by Justin Fox - 2009

"The Black Swan" by Nassim Nicholas Taleb - 2007

This is a motte and bailey.

Your original claim is "[individual] economic agents do not act rationally" (either at all, or on average, take your pick, both are pretty out there).

When challenged, you retreat to "No no I don't mean like you and me economic agents. Obviously when I buy eggs from the supermarket it's probably because I wanted eggs more than the $x I paid for them, and not because I picked some random thing to buy for no reason. I'm really talking about" + insert some more complicated idea X from one of the books you mentioned.

There are many such X you could choose from. That's why folks like you like to recommend entire books instead of giving a plain argument - so long as even one askance X seems to resonate with your audience, you can latch onto it and use it to emotionally persuade them. That is if anyone even bothers to read the book in the first place.

1. What “no no, I don’t mean anything like [that]”? - I never wrote any such thing.

Economic irrationality isn't binary but exists on a spectrum. Humans *simultaneously* make mundane rational choices (like buying eggs) while being systematically influenced by cognitive biases, social pressures, and emotional factors that traditional economic models don't capture.

I recommend books not to obfuscate but because complex economic behavior *can't be reduced to simplistic arguments*. The evidence for bounded rationality, hyperbolic discounting, and other psychological patterns affecting economic decisions is robust and empirically demonstrated across numerous studies - those books explain this.

Your accusation uses a straw man fallacy and assumes rationality is simple and self-evident, when - guess what - real economic behavior is nuanced. This isn't retreating to a "safer" position—it's acknowledging that economic reality is more complex than idealized models suggest.

…idealized, provenly wrong models - whose severe (and many times outright dangerous) limitations omission allows those who peddle them to keep earning their salary.

2. In other words, your answer misses the mark. When economists talk about economic agents not acting rationally, they’re not claiming people make completely random decisions devoid of reason. They’re pointing out that real human behavior consistently deviates from the idealized "rational actor" model in predictable ways.

People exhibit cognitive biases, use mental shortcuts, are influenced by emotions, have inconsistent time preferences, and often lack complete information. These aren't rare exceptions - they're fundamental patterns documented in decades of behavioral economics research. Hence the books.

This isn't a retreat to a more complicated position - it's simply acknowledging that the simplified models have practical limitations, AND, benefit some people far more than others. The evidence for these failures is robust enough that even mainstream economics has incorporated behavioral insights.

Rather than hiding behind book recommendations, I'm happy to discuss specific examples of these systematic deviations from rationality if you're genuinely interested in the substance of the argument.

You've qualified your original claim enough in these follow up comments that I'm happy leaving it here, thank you for your time.

> Finally, will they teach Keynesian Economics, or Neoliberal Economics?

What about Classical or Austrian?

“New math” was actually a college prep thing because it sought to teach kids how mathematics as a field worked. It’s telling that the author’s only criticism is just that it bewildered some parents. I would expect that because they were never exposed to those concepts in the first place. Kids are bewildered by anything new. They were bewildered by “old math” too. You have to work with them to get them past that. So saying it bewildered kids is like saying water is wet.

Since you're the one who brought up bikeshedding, why are you focusing on this instead of e.g. paying and respecting educators enough to encourage smart people like yourself to solve this and a thousand other problems of how to educate better?

The article uses AI art at the start.

Teaching physics is pointless unless you have your own particle accelerator.

That attitude is totally bizarre to me. Why would you not want to know how things work?

I guess that's why some people don't get climate change: to them it's just some weird belief for scientists rather than something you can understand yourself.

> That attitude is totally bizarre to me.

When they say physics they aren't talking about it as you know it. What they are actually talking about is a corruption of the meaning.

To them, physics is just boring math that you solve problems that have no basis in reality. Its just formulas you have to memorize that don't let you do useful things, and formulas by themselves are useless knowledge, so they believe. This is what current textbooks teach, no intuition, no practical knowledge, contradictory information.

Its not about how things work because that isn't what is being taught. It may have been at one time, but now its all just useless formulas to these people. Such is the corruption and degradation of education today.

I dislike articles like this because they tend to get the details wrong, while having things that sound plausible, but still poorly defining the problem.

The article does little more than promote and repeat the same arguments that led to each one of the things mentioned as negatives, with somehow this time will be different.

I hate to be the one to say this, but if the problem has repeated itself over decades, its not the subject matter but the type of people involved.

The subject matter changes, and you get the same result. The only thing that does not change are the people involved, and when you look at who is involved specifically it comes down to the bureacratic administrators, and the NEA special interests that receive the most weight. They are the experts after all.

After a certain amount of time, the only way these things are still a problem is because it was intended to be that way by someone involved. Education is hardly rocket science.

Ask yourself why Critical Thinking and Reasoning doesn't really happen until college? Philosophy used to be included in all basic education starting around 3rd-4th grade. It has since largely been withheld, but anyone receiving this education scores significantly higher than those that don't.

Food for thought, Trivium based curricula stood the test of time for hundreds of years, it was not until people started tinkering and removing things that we started having these problems.

If you teach kids critical thinking they won't believe in religious fairytales anymore.

If you teach them critical thinking, they won't believe in false ideology anymore which would normally blind them to everything else.

Some people are working real hard towards extinction.

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