Author Topic: Personal finance course for young adults.  (Read 934 times)

Experimental_FIRE

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Personal finance course for young adults.
« on: October 30, 2022, 04:05:25 PM »
I'm considering structuring a personal finance course for my children. Since we'd be doing this outside of school for no credit I'd like to utilize the great resources of the internet and make it multi-media (blogs, YT, Netflix etc.) to use different teaching mediums to learn. And I'd prefer it to not be only from the MMM blog, although it's a great resource for many things I want them to learn the basics as well (debt, how credit cards work, how mortgages work etc.).

With the Covid shutdowns I learned that my kids don't want to spend too much time studying on a screen so I want to keep the videos to 15 minutes or less where possible and then I'd probably structure some questions. It would be a struggle to get them to watch the recent documentary on Netflix - no thanks, boring.

My question:

What topics would you cover in a personal finance course aimed at high school/young adults? If you recommend a topic, please include links to a resource on the topic.

For example, from MMM, this concept was one that I didn't understand and it was jaw dropping simple once I understood.

Topic: Savings Rate

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

« Last Edit: October 30, 2022, 04:07:00 PM by Experimental_FIRE »

Runrooster

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Re: Personal finance course for young adults.
« Reply #1 on: October 30, 2022, 07:31:45 PM »
Ptf. I have young niece/nephew who are possibly spoiled or at least the opposite of frugal. Iíve thought about giving them ymoyl but I donít think theyíre ready for it. My main issue is both seem to want only expensive things. I mean, itís nice if an expensive object is free for them, but they donít trade off luxury items with affordable. Theyíre from high income folks, so the idea of ďnot worth itĒ hasnít been instilled. Or not at a level I can relate to.

- a key concept for me is the idea of diminishing returns. You donít have to have a Tesla to get from point a to point b. A vacation doesnít have to be at the fanciest resort. Mmm has a nice article about this.

- whatís hard for most young people is budgeting for the big expenses like taxes, housing, and retirement. 50k income sounds unfathomably rich when all you consider is discretionary expenses. My nephew barely agrees to college, my niece wants to be a gymnastics teacher. Either one of these would be fine if they were willing to live frugally. You want the champagne lifestyle, you canít do it on a beer budget.

-other big expenses are children, college educations, retirement, long term care.

MDM

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Re: Personal finance course for young adults.
« Reply #2 on: October 31, 2022, 08:25:54 PM »
It's a laudable goal but until kids start earning their own money and having to pay for things, most personal finance information goes in one ear and out the other.

If they earn money while in high school (soccer ref, etc.), set up a custodial Roth IRA and help them fund it.  "Help" can be anything from matching some fraction of their contributions to making all the contribution for them.  They should do their own tax return (with help from you as needed) at this point.

When they get their first credit card (e.g., after graduating from high school and going off to college), you'll probably need to co-sign.  Have them set up the card for automatic payment from their checking account, and stress that they can't charge any more than what is in that account.

When they do start working, you could discuss the Investment Order with them, and perhaps Getting started - Bogleheads.

Certainly more could be covered, but if they understand and follow just the items above that will be a very good start.

Freedomin5

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Re: Personal finance course for young adults.
« Reply #3 on: October 31, 2022, 09:33:31 PM »
I really like Designing Your Life by Bill Burnett and Dave Evans. Website: https://designingyour.life

It was designed as a course for incoming freshmen at Stanford University, by Bill Burnett, a Stanford professor, and Dave Evans, co-founder of Electronic Arts, and has now become a best-selling book. Not specifically about finances, but it talks about using the principles of Design Thinking and applying them to life and finances.

Experimental_FIRE

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Re: Personal finance course for young adults.
« Reply #4 on: November 01, 2022, 06:53:51 AM »
It's a laudable goal but until kids start earning their own money and having to pay for things, most personal finance information goes in one ear and out the other.

If they earn money while in high school (soccer ref, etc.), set up a custodial Roth IRA and help them fund it.  "Help" can be anything from matching some fraction of their contributions to making all the contribution for them.  They should do their own tax return (with help from you as needed) at this point.

When they get their first credit card (e.g., after graduating from high school and going off to college), you'll probably need to co-sign.  Have them set up the card for automatic payment from their checking account, and stress that they can't charge any more than what is in that account.

When they do start working, you could discuss the Investment Order with them, and perhaps Getting started - Bogleheads.

Certainly more could be covered, but if they understand and follow just the items above that will be a very good start.

Wow, the Boglehead links have a lot of great information, thanks!

beee

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gatortator

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Re: Personal finance course for young adults.
« Reply #6 on: November 01, 2022, 10:25:08 AM »
NOVA on pbs came out on with cool game this spring.

https://www.pbs.org/wgbh/nova/labs/lab/financial/

Which Teaches opportunity cost, intention-behavior gap, compound interest and other behavioral and economic concepts with video games.

I heard about this from Two Cents, a YouTube channel and PBS digital studio creator which makes interesting videos on various personal finance topics

https://m.youtube.com/c/TwoCentsPBS


Both of these resources might be interesting to you.



Runrooster

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Re: Personal finance course for young adults.
« Reply #7 on: November 02, 2022, 05:35:34 PM »
Here're a couple of good articles I like to share:
https://thehappyphilosopher.com/how-understanding-the-marginal-utility-of-money-will-make-you-happier/
https://thehappyphilosopher.com/utility-happiness/

I liked these articles, but they are very theoretical.  On top of which, despite frequenting this forum, I think things like nature, freedom, music, time to cook, time to spend with family - also have marginal utility.  I had the fortune of being semi-retired at 40 - taking care of my disabled mother was sometimes more attention than day to day work - and now I have the fortune of returning to my career, and I am much, much happier with challenging work to fill 40 hours a week.  I still take a walk outside for an hour a day, at lunch, while listening to my favorite music podcast.  On longer daylight days I take a second walk in the evening.  Exposure to a larger number of people than the two parents I live with (and occasional family), learning things about my industry, career, the world rather than being completely focussed on attending to my Mom's physical needs...  I don't love my coworkers, but I like the variety and appreciate the kind of interaction I have with them.  Honestly, there was very little rewarding or meaningful about caregiving, whatever the author of these articles expects. 

For some reason, the articles reminded me of my 17 year old nephew who doesn't want to learn math because he doesn't see a real world utility to it.  I'm not sure I did at his age either, for much of schooling, but I believed math is a Big Idea that has turned out to be important to science and business beyond what is obvious when you're taking a derivative.  I also generally liked the process of learning, getting better and smarter.  I think the same is true with nice objects, the pursuit of excellence, be it food or clothing or computers or cars - people like high quality far beyond its utility.  When my nephew claims not to ENJOY math, I think he's got a low IQ and is bad at it (I didn't put any real time studying math to be excellent at it at his age). 

Similarly, if you're buying the minimal happiness, most utility food, clothing, cell phone - you're probably poor (as the lead character in Inventing Anna says).  OR you are saving up for something else.  In my case, I sacrificed fancy objects to have a career I love, others do it to retire.  That burning desire to do something else with your money than get nice gadgets is what's missing in these articles for me.  That could be environmentalism, living lightly on the planet.  It could be a sense of fairness, that being in a rich country we need to support those in poor countries.  Some people do enjoy caregiving, esp as parents.  Maybe it's writing, or research, or religious studies.

The thing is, I am from a third world country. Are people equally or more happy there?  I dont know, everyone I know wants to come to the US.  But sure, there is a stronger sense of family and community, much less divorce, stronger religious ties.  There is more academic pressure in the US, more suicide I think.  So why does everyone want to come to the US, are the streets paved with gold?  I guess my point is, if you want to live poorly, or at least simply, you can probably retire today in a third world country.  With rolling blackouts and polluted water and okay healthcare.  Ex-pats in America all say they will retire there - and never do. 
« Last Edit: November 02, 2022, 06:50:43 PM by Runrooster »