Financial Literacy

[SumDay]

Until ~10 years ago, I thought everyone paid all their bills on time and had credit scores >800. Then my dad died, left me some sub-prime real estate and the people that lived in them. I had no idea - what a bubble I'd lived in.

This weekend has me reflecting, because next Memorial Day I hope to be retired, barring some calamity. I'm reading How to Retire Wild Happy & Free trying to make sure I get this next phase right. As the book suggests, I'm making a list of interests & activities that are important to me.

For my "helping others", I'm interesting in helping those who need it learn how to manage their money. Dave Ramsey's FPU isn't exactly what I had in mind. I'm looking more for one-on-one opportunities. I know there's a group in my city that fights payday loan practices and while that interests me, that's not one-on-one enough for me. I heard the financial columnist Michelle Singletary say she runs a financial ministry at her church, and that intrigues me.

Maybe volunteering in a battered women's shelter? I hope you've picked up on the drift of my goal, and am hoping someone can suggest organizations or cause I can explore.

Thanks in advance.

 

[Dash man]

One thing I've learned is people don't want to be told how to manage their finances. Unless they come to you for help in learning the basics, it's a wasted endeavor. So offering a class at a church where they make the effort to sign up and choose attend is a good start. Get them while they're young.

 

[Fedup]

I'm trying to at least help my kids to have some basic financial literacy. They are my kids, I feel responsible. But I know there is a huge gap out there because I tested my kids often. Boy am I surprised. Not in a good way.

 

[Meadbh]

The concern is justified.

How U.S. teens compare with their global peers in financial literacy - CBS News

I'm not sure how the OP, as a volunteer, can address this.

 

[athena53]

I'd love to be able to help in this area, too. After another particularly discouraging pledge campaign at my church, I suggested having a Financial Peace U. class since many people cited financial anxieties as reasons for decreasing a pledge from the previous year, or not pledging. I spent a fair amount of my own money to publicize it (large banner outside a month before, printing color flyers) in addition to having it on the FPU site and announced in our bulletin. Three people signed up. SO discouraging. (I didn't have the class.) Someone else later had one on our church and I think there were two couples at the end. While I don't agree with 100% of what Dave Ramsey says, his emphasis on separating wants from needs, paying off credit card debt and LBYM is solid.

A friend who's in a business that includes counseling people on getting their finances in order has told me that she can go through their income and expenses and come up with a list of things they can do such as cutting cable back (or out completely), getting cheaper cell phone plans, etc. but there's always some reason they can't make those changes.

As Dash Man said, they have to be motivated.

I was fortunate with DS- his father was a spendthrift who considered unused credit card limits as money he could spend so I think DS saw the advantage of LBYM after the divorce, when I actually kept the finances under control. He was thrilled to find second-hand clothing shops in college. He's so frugal I was somewhat relieved that he did spring for an engagement ring when he got engaged (nothing crazy but comparable to what her friends had). And he still comes to me for advice once in awhile- I was grateful he asked me before taking out a 401(k) loan to pay off his wife's 2% interest car loan! (He decided against it.)

 

[Sunset]

I'm trying to at least help my kids to have some basic financial literacy. They are my kids, I feel responsible. But I know there is a huge gap out there because I tested my kids often. Boy am I surprised. Not in a good way.

+1
Here is an example that just happened.
DD tells me she and her hubby bought a house, which is great as I didn't think they could afford it.
I ask her the mortgage rate, she doesn't know
Yet she can go on and on about a 3 day vacation they took and the wineries they visited, and what they drank

So I explained to her how mortgage insurance is simply for the bank, and she could skip that charge and just get term insurance if desired.

 

[Sunset]

OP - good luck with that.

I know at least 1 relative that needs a lot a help with finances, and she is totally open to suggestions as long as it means she can spend MORE NOW.

 

[Walt34]

I know at least 1 relative that needs a lot a help with finances, and she is totally open to suggestions as long as it means she can spend MORE NOW.

It seems that most families have at least one of those. In ours it is the SIL that I refer to on the forum as "Spendarina". To her, "affordable" means she can make the payments.

 

[athena53]

I ask her the mortgage rate, she doesn't know
Yet she can go on and on about a 3 day vacation they took and the wineries they visited, and what they drank

In the one Dave Ramsey book I read, he mentioned a couple who were desperate to consult with him because they were in deep financial trouble. When he suggested a date in the near future, they said they couldn't make that date because they'd be on a cruise.

Priorities.

 

[ivorybird]

My mom, who his very frugal was once taken to lunch by another relative so she could "pick her brain" about finances. This relative said "You have been so successful, what is your secret?" As you can probably guess, it was someone who was having financial problems. My Mom told her "You have to spend less than you earn - it's no harder than that. There is no magic."
Unsurprisingly, the subject never came up again, and that relative is still happy to continue spending at the same clip they were before. So, even the ones who are looking for answers don't necessarily like them once they hear them. Sigh.

 

[razztazz]

My mom, who his very frugal was once taken to lunch by another relative so she could "pick her brain" about finances. This relative said "You have been so successful, what is your secret?" As you can probably guess, it was someone who was having financial problems. My Mom told her "You have to spend less than you earn - it's no harder than that. There is no magic."
Unsurprisingly, the subject never came up again, and that relative is still happy to continue spending at the same clip they were before. So, even the ones who are looking for answers don't necessarily like them once they hear them. Sigh.

They seem to think there's some "secret thing" you do. Like the loaves and Fishes.

 

[Fedup]

I think there is more to it then LBYM. Like know how much your credit card charge you, one of my kid said zero, I think she was carrying a balance at the time. And this is not a stupid kid. It's either lack of desire to learn or something. Maybe I can start blaming on being a millennial, heck we get blamed a lot by being a boomer. Why not?

 

[Sunset]

I think there is more to it then LBYM. Like know how much your credit card charge you, one of my kid said zero, I think she was carrying a balance at the time. And this is not a stupid kid. It's either lack of desire to learn or something. Maybe I can start blaming on being a millennial, heck we get blamed a lot by being a boomer. Why not?

True, it's at least: LBYM and pay off your CC in full each month.

 

[1-31-18]

They seem to think there's some "secret thing" you do. Like the loaves and Fishes.

Also, luck. They think you have money and they don't because you're lucky and they're not. Stupid, irresponsible people who are always dead broke will often claim others, who are comfortable, are just "lucky." Apparently hard work over a sustained period and LBYM have nothing to do with it.

 

[aja8888]

In the past 20 years, we have had all the "financial" talks and handed out the Dave Ramsey books in our blended family. And not surprisingly, a few recipients have made it to the bottom and have decided to stay there.

One is now trying to figure out how to qualify for SSDI (and she is not disabled ), and one is living with his ex-wife (again) and has no job (she (ex) must be a saint). One has also filed for personal bankruptcy and is still living hand to mouth. Some have actually made it.

So I guess its all pretty normal in that regard.

 

[meierlde]

One of the issues involved is that to teach financial literacy in school, you would have to cut something else. In the past at least parts were taught, the IRS used to provide kits so that kids in school could fill out tax returns, the arithmetic books dealt with balancing a checkbook, compound interest and the like (this was before the New Math), when 8th grade was arithmetic etc. (back in the 1962 time frame)

 

[aja8888]

One of the issues involved is that to teach financial literacy in school, you would have to cut something else. In the past at least parts were taught, the IRS used to provide kits so that kids in school could fill out tax returns, the arithmetic books dealt with balancing a checkbook, compound interest and the like (this was before the New Math), when 8th grade was arithmetic etc. (back in the 1962 time frame)

I don't think the 4 "r's" are taught in school anymore, you know, readin', ritiin', and rithmatic'. And i know American history is no longer a subject.

 

[Gumby]

Also, luck. They think you have money and they don't because you're lucky and they're not. Stupid, irresponsible people who are always dead broke will often claim others, who are comfortable, are just "lucky." Apparently hard work over a sustained period and LBYM have nothing to do with it.

External locus of control versus internal. Oddly enough, the externals rarely succeed, except by chance.


https://en.wikipedia.org/wiki/Locus_of_control

 

[savory]

I think there have been some good ideas here such as offering some support in your religious institution. Perhaps the local library maybe interested but they may require some type of reference/qualifications. Another thought is a bankruptcy attorney who may want to offer some extra support to clients. Or, all of these.

My advocacy efforts confirm some of the comments made so far that people have their own priorities/approaches for their finances, health etc and changing 'bad choices' is difficult. The key is to deliver your message at the time they are most vulnerable to hearing it. This is often the hardest part of advocating and requires a time investment to build awareness of your offer.

When you think about your time investment, 85% of your time will likely be invested in informing people you are there and how you can help as well as improving your 'product'. 15% of your time will be delivering your message. I am sure there are people who get lucky and their time investment is different. But, I think this is one of the downfalls of advocates. The time to promote your offer is more time/effort then most people feel they should have to invest. Not unfair since people are offering their time at no cost but it seems the world is unfair that way.

But without the promotion part representing the 85% of your time, I think the likelihood of success is slim. Advocacy unfortunately needs to be viewed like a job. It requires analysis of success/failure , reviews of your presentation, review of promotion effort etc. It may even take a business plan. The more narrow the audience, for example your religious institution, the simpler the plan could be. But, in my humble opinion, the steps are the same.

I think what you are trying to accomplish is terrific. I wish you luck.

 

[braumeister]

Our "bad example" relative who has been in financial trouble continuously for nearly 30 years has never failed to explain (while asking for help) that none of his difficulty is due to his own fault. There are always vague external factors that are 100% responsible for his difficulties. He is also adamant about rejecting any suggestions for change, since he knows better.

 

[iloveyoga]

Two things. One of my grandmas always said "it's not what you make, it's how you spend it."

And, I like to spend some of my time helping friends and family who are open and will listen. I help some of them to file their tax retrurns, and that is a great opening to give at least one piece of advice.

 

[marko]

Also, luck. They think you have money and they don't because you're lucky and they're not. Stupid, irresponsible people who are always dead broke will often claim others, who are comfortable, are just "lucky." Apparently hard work over a sustained period and LBYM have nothing to do with it.

A few hours before I wrote him out of my will, one of my nephews suggested that I "must have cheated along the way".

He who laughs last!

 

[athena53]

My brother retired at age 59 or 60, I forget which, after working his rear end off and slogging through a job that had become tedious but carried a generous DB pension. (He and SIL were always very frugal as well.) He fell prey to the OMY syndrome but I was SO relieved when he actually did retire, bought a house near a lake, joined the sailing club and equipped a room in his basement with state-of-the-art woodworking equipment so he could build beautiful furniture.

I later heard that a cousin asked, "How did Tom get to retire so early?"

Just lucky, I guess.

 

[Danmar]

Yes, the world is filled with bad actors on this one. I have basically given up trying to explain things to friend/relatives. With my daughter and SIL I still try but mostly through example not lecturing. Mostly I just shake my head and realize how lucky (smart?) we are.

 

[pjm-7]

If you are interested in volunteering for financial literacy you could look into nfcc.org. They are a not for profit that provides financial education. About twenty years ago I was on the board of a local affiliate and enjoyed the experience.