We often read in the media “helpful hints” about money, aimed at people who really do not have a grasp when it comes to personal finance and budgeting. These suggestions are basic, however, pointing up the need to ramp up education. Personally, I think a high school level finance class should be offered, perhaps even required for graduation, given these contemporary conditions:
- Of American teens, 75 percent lack confidence in their knowledge of personal finance.
- Of Americans in general, 25 percent say they don’t have anyone they can ask for trusted financial guidance.
- Of U.S. adults ages 18–29,23 percent have credit card debt that’s over 90 days overdue.
- Americans owe more than $1.03 trillion in credit card debt as of second quarter 2023.
A series of six articles will be forthcoming to help you navigate and put into practice basic financial information that will help you, the end result of which will hopefully give you a chance at living better, with a higher assurance of financial security than you otherwise could have counted on … if you accept—and adopt—fundamental principles and rules that will require the development of your own self-discipline to make these recommendations secondary habits over time. These articles could also become the basis for a syllabus in a high school finance course that could be offered in our public schools.
The framework I will write for you in the subsequent six articles will look like this:
- Learn—We will discuss how you can learn not only from this six-part series but also from other resources as well. Most people simply have not learned even the most rudimentary of financial principles for managing their own finances. Their impulses and intuition don’t help them; in fact, oftentimes they hurt them. You don’t need an expensive college course to pick up good habits in this series; you can continue to expand upon your knowledge simply be utilizing online searches.
- Save—We will examine the discipline of saving—not from the standpoint of absolute dollars or percentages of your paycheck but in terms of an attitude toward saving that inclines you to save as much as possible, while ignoring the formulaic approaches that either don’t always work or are impossible to accomplish given the cash flow you currently generate. More than one in four Americans (28 percent) have savings below $1,000. Rising living costs are the primary barrier to saving more (66 percent), followed by debt repayment (31 percent).
- Avoid—This topic might be annoying to you because it will touch a nerve. That nerve will be the foolish things our money is currently being poured into, such as avoidable expenses, interest, fees, and relatively expensive food and drink. A Mocha Cookie Crumble Frappuccino from Starbucks runs about $10.00 today; buying one a week means $520 in one year’s time.
- Track—Many people cannot reconcile their checkbook to their monthly bank statement. People don’t always carefully review their monthly credit card statement. Other subjects, such as financial contracts, taxes, judgments, and liens, are likely only understood by a small percentage of Americans. You cannot expect to make progress if you first don’t inspect what is coming in and going out financially. Budgets sound boring, but a simple budget created to track incoming and outgoing will reveal the opportunities for financial improvement.
- Invest—People are investing in speculative gambits such as precious metals, fashionable stocks everyone is chasing at the same time (e.g., “Magnificent Seven,” AI-related), Bitcoin, stock options, commodities trading, annuities, life insurance, real estate (not including your home), or other risky investments that have the potential to destroy them out financially. Today, you can safely earn over 5 percent per year in money market fund or short-term U.S. Treasuries.
- Resist—The final in our six-part series will seek to instill the discipline that the best investors have inculcated to do well financially. We can all name people who have done well without even trying: Lotto, Las Vegas, killer APP, YouTube followers, initial public offerings (IPOs), and many such lucky breaks. But these people are not you. These people represent one in a 100,000; don’t make them your role models; don’t bank on “luck.” Your job will be to adopt the good habits that financially astute professionals and people have learned to maximize, optimize, and ensure financial security simply won’t be one of the major problems in their lives.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
