Author Topic: Idea: Extreme Financial Literacy Curriculum for poor/low income families  (Read 16231 times)

PaulM12345

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I've been following some of the discussions about charities, responsible investing, donating money and time, and so on. I personally think one of the most important ways people can "do good" is by utilizing their skills, expertise, and passion (i.e., not money).  This has got me thinking: Has anyone thought of turning the MMM / ERE messages into some sort of curriculum for low income people? I'm thinking of actual classes/trainings, i.e., not just online. What would such a curriculum look like? Maybe start with a youtube video, classes at high schools, churches, non-profits, community centers, who knows?

It's fairly common for MMM and folks on this forum to critique folks for overestimating what a living wage is. (example thread: https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/pbs-show-on-how-impossible-living-on-38kyr-is/). While I get the point of this, I also feel like it verges on the "pull yourself up by your bootstraps" message. It's pretty understandable that people on the lower end of the spectrum who've been indoctrinated into the consumer culture since day 0, have trouble groking the idea, if they are ever even exposed to it. My job is in social services, and I've  worked with a range of very low-income individuals and families in poor settings. So many people are dealing with trauma, disillusionment, violence, lack of opportunity, racism, sexism, and so on and so on that working for financial stability, to say nothing of financial independence, is not even on the radar. The "little indulgences" are what make life bearable. Some few have the motivation and capacity to overcome these barriers on their own, most don't.

All this is to say that I think it would be really worthwhile for the message of financial independence (not just literacy) be made available to people - especially kids/young adults. It's hard to get motivated in high school if you're facing 45 years of monotony. Retirement at thirty, on the other hand? I would have really benefited from a little MMM magic at my weekly high school assembly.

As far as I can tell, mainstream financial literacy programs (based on my limited exposure and a quick google search) focus on very practical things like using banks; balancing check books; avoiding credit card debt; the road to home ownership, etc. Others seem to be more big-picture, but only in the sense of teaching people about compounting interest and retirement savings. In other words, good messages, but nothing radical - they're setting folks up to be good workers and reliable consumers.

There are a lot of people on this forum who want to do good, not just save, retire and go on permanent vacation. In fact, living in a rewarding, meaningful way is as far as I can see the key component of the Mustacian message. So I guess I'm wondering people think about this as-of-yet vague idea.

smalllife

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I've been turning this idea over in my head for a while now, but unfortunately much of the details are beyond my grasp.   I know of one charity that helps low income people file their taxes and I plan to participate in that this upcoming tax season (I think it's geared towards college students, but I'm sure I can find something similar if I don't qualify).   

Hopefully that stretch of volunteering will give me some ideas, or at the very least exposure to other groups that might already be doing something similar.

I had a whole paragraph written about why teaching this in schools is not a good idea but decided it was best not to go down that road.  Suffice to say, the best medium and method for expanding financial literacy is as of yet unknown.

grantmeaname

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When I'm king of the world someday, it'll be mandatory.

Smalllife, I'm really interested in hearing what you think the problems of teaching FI in schools are. We're pretty thick-skinned here and I don't think the OP will take it as an affront to his core idea if you point out practical problems with one way of getting it across. Plus, a discussion of why it might not work in schools could inspire people to consider teaching it through a YMCA, or at a bike co-op, so it could be really productive even though it's negatively-oriented.

twinge

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I think it's a great idea.

As a person who has designed programs for youth in this population, there are a few key things I would highlight if you chose to focus on youth:

a) Focus on creating a community who is interested in talking about these ideas, more than just content of curriculum--a small group of youth who are really interested are a better start than a larger one.  One of the biggest issues is to develop a support system for youth who trying to picture how to  operate counter to the prevailing culture around them.  This is way more important than ironing out the details of curriculum.

b) As quick as possible, shift authority to youth to envision how to design the program, teach themselves and others with you serving more as a rudder.  It helps if they can be paid to implement their designs (you could likely get grant funding to support this which is a fairly minimal expense). Some of their suggestions will probably make you think "huh?" but they will also likely astound you with great ideas you didn't imagine.  If you have collective discussions about how to make ideas into something feasible that make sense, usually the good ones win out.  The benefit of this approach is multifold:  they are more likely to be sensitized to what is useful/compelling info for their community, you are less likely to get burned out trying to "lead," even if the program doesn't take off they youth who were involved in the creative process will gain a lot in terms of initiative etc.,  others in the community are more likely going to want to help out youth trying to do good etc.

Just a few thoughts...hope you keep working on it.

PaulM12345

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Thanks for the comments. I should clarify that I don't have any current plan of doing this myself, at this moment - partly because finances are not my expertise (I'd have trouble answering any specific questions). That said, I can foresee it as a possible project sometime in the future, and I'll hopefully be in a position to do small-scale projects like this. Meanwhile, I was hoping to inspire others here who are clearly really into financial matters to take the idea and run with it!

Smallife, I'm curious too about why you don't think this would do well in schools. I can see how it doesn't fit with the major goal of school which is "lifelong workers" (as opposed to lifelong learners). Is that what you were thinking?

Besides high schoolers, another target for such a message would be single parent - a collective of single parents could support each one attaining FI.

You mentioned a charity, which tends to rely on donations. I think a more likely direction would be to apply for grants from established organizations. A 30K grant could help produce a curriculum, try it out, publish materials, website, etc. Anyone who's already retired want to get going on that? :)

Twinge - thanks for the support and suggestions. I agree about the shifting of authority. I think having an "authoritative" leader is important in many cases, e.g., MMM (and I don't mean that in a bad way at all) but when it comes to empowering people in low income communities, you can't go in there aiming to teach them how to live. Well, you can, it just won't work. This hypothetical program could combine the basic message of financial independence through saving and lowering consumption, and a project, as you mentioned. The "success" of the project wouldn't be that important if the message gets through and the experience is empowering.

smalllife

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a) Focus on creating a community who is interested in talking about these ideas, more than just content of curriculum--a small group of youth who are really interested are a better start than a larger one.  One of the biggest issues is to develop a support system for youth who trying to picture how to  operate counter to the prevailing culture around them.  This is way more important than ironing out the details of curriculum.

b) As quick as possible, shift authority to youth to envision how to design the program, teach themselves and others with you serving more as a rudder.  It helps if they can be paid to implement their designs (you could likely get grant funding to support this which is a fairly minimal expense). Some of their suggestions will probably make you think "huh?" but they will also likely astound you with great ideas you didn't imagine.  If you have collective discussions about how to make ideas into something feasible that make sense, usually the good ones win out.  The benefit of this approach is multifold:  they are more likely to be sensitized to what is useful/compelling info for their community, you are less likely to get burned out trying to "lead," even if the program doesn't take off they youth who were involved in the creative process will gain a lot in terms of initiative etc.,  others in the community are more likely going to want to help out youth trying to do good etc.

This.  This right here is why I think teaching it in schools won't work.  The system works against children born in poverty, without a home support system, and without any hope of going to college or working with their brains rather than their hands.  Not because they aren't smart or capable, but because society puts up too many roadblocks and very few children/teenagers are able to overcome them.  In my part of the country at least, low-income schools have the worst teachers and facilities. School is somewhere you go because you are legally required to do so.  A quarter of my graduating class dropped out at 16 - the age you are no longer legally required to attend school.  There are pitifully few opportunities at the trade school in our district: it's possible but requires a lot of time and transportation for those at other schools.  By the time they get to high school the majority has checked out.  If someone came to talk about FI or getting out of poverty they would laugh and continue in whatever conversation they were having.   It takes a community.  Right now the community that would benefit the most from financial literacy recognizes all to well that the educational system is not one to put their trust in.  There are exceptions of course, but the majority of young adults in the inner city or depressed areas of town are smart enough to know that the school system is largely a waste of time.  They graduate high school (the 75% that do graduate) with an 8th grade reading level and pitiful math skills.  Teaching financial literacy requires a solid mathematical and literary foundation which many of these kids are likely not have. 

If you can find a self-interested party of kids or adults to teach, then yes, it would be worth your time and effort.  But I don't think that a public school setting at all meets the criteria twinge laid out.

fruplicity

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I've actually started teaching classes in the low-income community where I work - well only financial literacy, not independence - I was actually encouraged NOT to concentrate on the idea of saving/investing because I was told it was way beyond these kids' grasp or experience to even fathom having money to save long-term - it was more important to the people I partnered with to concentrate on college financial aid issues and managing/avoiding debt.

 I designed a really basic, broad curriculum and have taught it to five different groups of students this past spring - four high school, one middle school. One thing that helped battle the main issues already mentioned (which I totally agree with) was that I taught it to kids in a federal TRIO program who had been selected (based on academic performance and potential) to receive extra support to put them on a path toward college. So I think partnering with a non-profit or federal program specifically targeting these 'cream of the crop' students is a good place to start. Yes it unfortunately "ignores" the students who really need the help and attention, but as mentioned many of these students are already checked out and it's virtually impossible to reach them through this kind of avenue. But in developing a more comprehensive program, one could allow these "top" students to take on bigger roles than just learners, which leaves the oportunity for some positive peer interaction and influence (for example, the top students could start some kind of club open to all students, or teach a portion of math class to their peers, etc).

I'm no expert, this opportunity practically fell onto my lap and I jumped on it, despite having no formal teaching training or experience (for what it's worth I do have a M.Ed in Education and got very positive feedback from the "real" teachers as well as about 85% positive survey feedback from the students). I'm hoping to continue it in the next school year. A little nagging part of me has a dream to create a nonprofit to do specifically this type of thing but the dream isn't strong enough yet to really push me to go for it (or my doubts are stronger than my dream). Either way I'm happy I've at least taken some steps down this path and am excited to see where it goes from here.


darkelenchus

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Check out the Financial Integrity/New Roadmap Foundation, which was founded by the authors of YMOYL. They have teaching programs and links to folks who teach them, but the program isn't necessarily geared towards poor or low income households. That's not to say you can't find someone through the Foundation who has experience in this area. It's likely someone has such experience.

I think smalllife's comment is right on the money about why having such programs through schools in economically depressed areas will be largely and discouragingly ineffective. If you want the endeavor to effect positive change, you'll have to look towards focusing on smaller groups that meet at least some pre-requisites for understanding the concepts and procedures of FI.

The biggest hurdle, probably, is that poor folks will have little actual experience with saving as a result of the reality of their situation This is often why when they benefit from upward mobility, they squander it with lifestyle inflation. This cracked.com article might give you a sense of the mindset that leads to those bad habits: http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/ . It's not impossible to illustrate the concept, but their imagining saving something is inhibited by their reality of having nothing left to save at the end of the week/month/year. The first concern will not be so much with showing they can have a savings rate now, but that they can take steps to raise their income, which will allow them to have a savings rate in the first place. Then you can explain what to do with the savings rate.

reverend

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I've been turning this idea over in my head for a while now, but unfortunately much of the details are beyond my grasp.   I know of one charity that helps low income people file their taxes and I plan to participate in that this upcoming tax season (I think it's geared towards college students, but I'm sure I can find something similar if I don't qualify).   

There's a charity here who has a program to help prevent seniors from making money mistakes (which includes being ripped off by scammers/family).  While I think that's a noble cause, I think this program would be redundant if children were taught like you say...


gooki

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If kids are checkedout come high school, I say go teach them when they're younger. Nothing wrong with teaching an 8 year old about money and debt.

MooreBonds

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #10 on: August 05, 2012, 10:58:47 PM »
While your sincerity and heart are true, I'm afraid that you'll find the intended audience may simply be unresponsive.

I'm not suggesting that people who don't manage their money have an illness, I'm only using this to illustrate a concept: just as people with a mental illness are simply unable to recognize that the voice they hear in their head isn't actually real, or the hallucination they see following them around is a figment of their imagination...in the same way, many people (whether poor, middle class, or even high-income) are simply wired in a way to be unable to see (much less WANT to learn/see) how to improve themselves financially, or how victories can be made with small steps in improving their financial health.

Some people are simply victims of not being taught, and some are able to learn when it's presented to them in an understandable way - but don't forget that many in our society are unable and unwilling to understand.

Typically, if someone has the psychological awareness and wherewithal to pull themselves up by their bootstraps, they will have already done so on their own (or at least made significant progress towards reaching that goal), without waiting for someone to show them how.

A program like tax services can be useful, because it requires the person to come forward to want to receive help. However, I don't see many people doing that on their own initiative with personal finance (unless there were a gov't penalty for not learning :) ).

Sadly, some of these fiscal trainwrecks will first stampede to a Wade Cook/Robert Kiyosaki seminar because they offer the sales pitch of an easy income with not much effort required. They do have a desire for more wealth - but only for the prospect of being able to spend more. If Wade/Robert advertised that they had to make financial sacrifices in order to do well with their investments, people wouldn't touch it with a 10ft pole.

happy

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #11 on: August 06, 2012, 02:49:10 AM »
 I also have had the same idea, quite a while ago in response to another blog I read "Down to Earth" which is a simple living blog, from a couple who have great quality of life on a basic pension: their principles are similar to MMM/ERE philosophy although more simply expressed.

 It made me realise that frugality can set you free from poverty. In my country there's a plenty on pensions who live miserably by not knowing how else to live.

As far as will education work? Well I think some will hear and respond, and some will choose to ignore the advice. I reckon everyone should get to hear the message once. 

kisserofsinners

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #12 on: August 09, 2012, 04:54:44 PM »
When I'm king of the world someday, it'll be mandatory.

I'll let you take over... You're doing much better than i was when i was 20 aiming for king of the world. :)

HeidiO

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #13 on: August 10, 2012, 03:19:35 AM »
When I was 18 my father told me to read YMOYL.  As a college student living on $6000 a year it didn't make sense to me.  It speaks to people who have more than enough.  At $6000 I didn't have enough.  Different place on the fulfillment curve.  Kids growing up in poverty (which I have a few years of experience in) aren't going to hear a "frugality for the sake of frugality" message.  Extreme frugality is fun when it is a choice, not a necessity.
Heidi

kolorado

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #14 on: August 10, 2012, 07:13:07 AM »
Having grown up poor and with the majority of my extended family still poor I can attest that an "education program" is unlikely to work. Why? Because many people in the lowest rungs of finance are there because they are poor learners. Poor learners cannot grasp concepts  as they are traditionally taught. And often it is related to mental disorders and sickness.
 Poor learners or not, the information to succeed is available freely to anyone who first has the desire to learn it, a mind open enough to receive it and the determination to push themselves forward. All it takes is a library card.
Something the poor always seem to grasp is media influence. So to really reach the masses of the financially illiterate, make funny financial cartoons, put out clever financial music(yes that's possible, look up Square One!), make attention grabbing commercials during daytime shows like Judge Judy, stage a unique financial event in public and have the media attend, etc.
Yes, a class or program of study will reach those who are already ready to learn and pull themselves up. For everyone else, the ones who need it most, help may consist more of preparing the soil or sowing seeds of which you will never see to harvest.

Nancy

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #15 on: August 10, 2012, 07:54:14 AM »
I have wanted to do this exact same thing. I think it's imperative to teach students about money and financial independence if they are to have a chance of breaking the cycle of poverty. IMO, it's important to set up a separate course or program that you could then come in and teach at a school, as opposed to allowing the school to teach the curriculum (schools have a vested interest in students going to seemingly prestigious school that are actually just expensive). I also think that the course should be online and interactive, so you can reach and engage the widest possible audience. Most importantly, I think it needs to be free and could be supported by grant funding or independent philanthropy (like Khan Academy).

Bakari

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #16 on: August 10, 2012, 08:25:59 AM »
I always thought this would be a good way for junior high math teachers to make learning more relevant to real life.

That way kids learn about how to not waste their limited money, AND you get them learning math at the same time.

For example, instead of word problems involving apples and trains, you have problems where you calculate the total cost over a year of going to check-cashing places instead of a bank - and then come up with a list of what you could buy with that money.
Or you figure out how to determine if your supplier is shorting you - break out the postal scales, divide up the dime bags, if you know what I mean...

Sure, lots of kids are disengaged from school, but that doesn't mean that some of what they learn in school doesn't sink in.  The vast majority learn to read, learn basic arithmetic.  Go over savings with them a few times, and at least some of them are going to pick up something.

And there is definitely a need for it. 
Some of it would even be as simple as just making sure people are aware of what services already exist.  There are people who have no phone, or pay $35 a month for a cell phone, only because they don't know that $5 a month LifeLine exists.

Yes, the information is out there, but it isn't just motivation that stops people from seeking it - you can't look for something that you don't even know exists.  Even college educated middle class people don't know the value of basic frugality - millions of Americans genuinely believe they are struggling just because they waste money on crap they don't need.  How could we possibly expect the less educated poor to spontaneously see the light on their own?

To all the people who think the community would be unable or unwilling to hear it, think of the public information campaigns that have existed in the past.  Anti-smoking ads is a good one.  It hasn't eliminated it, but it has raised public awareness of cancer enough to have reduced it enormously.  I see no reason you couldn't do the same with anti-payday-advance-loan ads.  Or how sex-ed in schools has reduced teen pregnancy and STD rates - demonstrating that stuff you teach kids in public school really does have an impact on real world behavior.

Gerard

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #17 on: August 16, 2012, 07:06:00 AM »
It might also be a matter of choosing your target groups. Where I grew up (in poverty!), it was the immigrant kids who appreciated concepts like delayed gratification, education, and long-term planning. We already had the mindset. We just didn't have the tools, or the understanding of how things worked in our new culture.

The financial advice I absorbed from my parents was basically "Don't spend money on anything, ever." Which was actually pretty useful, compared to what my tenth-generation-Canadian schoolmates were hearing. A lot of them (like a lot of what John Ogbu calls "involunary minorities") have been beaten down so often that the live-for-today choices they make actually make sense to them. Why save when somebody's going to rip you off? Why plan for retirement if you're going to take a stray bullet? Why deny your kids a toy today when your income source might disappear tomorrow? At some point the financial literacy/independence teaching we're talking about is actually a competing ideology, one that many people haven't seen work around them, and that they'll resist if it comes from outsiders.

(Wah, re-reading that, I'm a total buzzkill... sorry about that.)

ak404

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #18 on: August 16, 2012, 08:28:49 PM »
I dunno, I'm poor and I'm learning.  I don't have much (if anything), but I'm scraping by and saving what little is left to get bad decisions from the past to stay in the past.

The first part, I guess, is to start getting used to the idea of long-term planning.  Another is getting used to the idea of discomfort.

liquidbanana

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #19 on: August 17, 2012, 01:17:12 AM »
"As far as will education work? Well I think some will hear and respond, and some will choose to ignore the advice. I reckon everyone should get to hear the message once."

This.

Just as there are people making six figures with doctorates who don't completely "get" the point of frugality or FI, there are people in all socioeconomic spheres who won't either. At the same time, there are plenty of people who will. Anyone who just dismisses all poor people off as incapable of learning this stuff needs to spend a few days with some po' folks. Mustachian concepts aren't rocket science. I would argue that you don't even need to be literate for the most part to understand it and implement it.

Unfortunately, implementing it is harder for people who start at the bottom and have bad habits ingrained because that's all they've known. The concepts are still valuable even for these people. Just hearing them is a good start. Our society is so crazy that these ideas are really revolutionary to so many. To expect people who've never been exposed to frugality or any form of financial literacy to be able to figure it out on their own is not realistic. Even if they are the "pull yourself up by the bootstraps" type.

I grew up poor with divorced parents who both had only 8th grade educations and terrible financial skills. I learned about voluntary simplicity and the possibility of early retirement when I was 17 via library books (Your Money or Your Life was one of them) and adbusters magazine. These ideas changed my life more than any other philosophy I've come across. It was like finding Jesus! lol I can't imagine how miserable my life would be at this point if I was never introduced to these ideas. I would be running a rat race and losing with no end in sight. I think everyone should at least know that they can choose something different for themselves.
« Last Edit: August 17, 2012, 01:22:26 AM by liquidbanana »

flygirl

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #20 on: September 04, 2012, 12:56:16 PM »
Just poppin in late. Hi. I thought this article might add to the discussion: The High Cost of Poverty: Why the Poor Pay More http://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702053_pf.html

It's something you don't think about, but "being frugal" can sometimes require an upfront cost that many people can't afford.

PaulM12345

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #21 on: September 04, 2012, 01:15:52 PM »
Thanks! I agree and thing about that for myself a lot. Not that I am poor by any means, but I often realize that if I only had more time (i.e., if I didn't have to work) I would be able to save a lot more money. Simple things like choosing the most efficient space heater or prowling craigslist would really cut my expenses, but ironically I'd only have time to do it if I didn't have to work. Anyway, I'm hoping to change the situation soon. I appreciate the link to the article.

erejacob

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #22 on: September 16, 2012, 03:39:19 PM »
The ERE blog has caught a significant amount of flak (including threats of violence) from self-described poor people for suggesting that one can have a happy live at low income.

(This happens when someone posts a link to my blog on yahoo, reddit or another big site.)

Frugality is a solution, alright, but it's not the solution many want to hear. A common human reaction is to look outside rather than inside to explain why "one's life sucks". In particular, when people say their life sucks, they're looking for sympathy... not some solution that implies that they themselves can do something about it. For example,

"I'm only earning 15,000 per year so I struggle financially and my life sucks."
"Here's a link that shows how you can live a good life for 10,000."
"Why are you dissing my unhappiness?!? You don't understand poverty."

I have no idea how to get around that. From having listened to several stories, it seems that the problem of poverty is more fundamental than the lack of eduction/knowledge. Rather it's a lack of agency, that is, the belief that one is personally in charge of and able to influence one's destiny. I've seen several examples of people coming out of poverty because they believed they could do it. I've never seen an example of someone getting out while maintaining that there was nothing they could do about it. I don't know how to develop agency through the written word.

Another problem is that people who want to help typically have "surplus capital". They can spend less because they can substitute something else. People in poverty often have nothing to substitute. They're trapped. Also see http://earlyretirementextreme.com/angry-people-online-insults-frugal-lifestyles-and-the-poor.html + the link in that post discussing Aristotle's "natural slaves". Also the comments.

MooreBonds

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #23 on: September 16, 2012, 07:45:02 PM »
Frugality is a solution, alright, but it's not the solution many want to hear. A common human reaction is to look outside rather than inside to explain why "one's life sucks". In particular, when people say their life sucks, they're looking for sympathy... not some solution that implies that they themselves can do something about it. For example,

"I'm only earning 15,000 per year so I struggle financially and my life sucks."
"Here's a link that shows how you can live a good life for 10,000."
"Why are you dissing my unhappiness?!? You don't understand poverty."

I have no idea how to get around that.

To put it simply: there are 2 main reasons that keep people from growing themselves out of poverty: many people who simply don't want to solve the problem - they only want to bellyache and complain....and those who refuse to believe the power of $1.

If you or I walked through the dwelling of a 'poor person', we could probably easily see where they could reduce costs to actually accumulate some additional savings (everything from buying Doritos to using check-cashing places).

Not only would they not want to truly hear our advice on how to help themselves, but they also refuse to believe it can be so easy as saving $1. To them, they can't possibly fathom how saving "just $.50" on a can of tuna, or "just $3" to cash a check amounts to anything. To them, the only way to accumulate wealth is to earn a huge income (although they fail to realize that if they spent everything they made at $15k/year, they would likely spend everything they make at $50k/year)

Taken solely on it's own, they are correct: just $.50 on a can of tuna in and of itself cannot possibly bring them out of poverty.

But applying that attitude to everything in their lives, can. So when they make a sacrifice by (gasp) not buying a bag of Doritos, or (God-forbid) go without a cell phone or (the ultimate) cut out cable each month, things have such an overwhelming effect that money can start to accumulate.

However, it takes someone who wants to put forth the effort. And, sadly, many do not simply want to.

You can look at many immigrants (legal or illegal), and you can see many examples of people making true sacrifices to accumulate some money. The difference between their modest level of success and the poor that assault your blog is often a simple difference of motivation and determination. Sure, it might take working 2 jobs, one of which is washing dishes or cutting lawns or flipping burgers....but the opportunities are there if you truly push yourself and desire to pull yourself out. Hell, I was raised in an upper middle class household, but still busted my ass sweating on the golf course as a caddy starting at age 12 in addition to mowing lawns in order to start accumulating money, and even today work a moonlighting gig (sometimes staying up until 3am some nights) to make some extra $ even though I'm getting very close to being FIREd and truly don't need the side work. I could sit back and complain about the multi-millionaires, and how they have it easy, and how it's not fair that they have so much - but instead, I simply spend the effort trying to better myself and doing what I can to accumulate some wealth (and minimizing my expenses).

PJ

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #24 on: September 16, 2012, 09:31:50 PM »
Jacob said:  From having listened to several stories, it seems that the problem of poverty is more fundamental than the lack of eduction/knowledge. Rather it's a lack of agency, that is, the belief that one is personally in charge of and able to influence one's destiny. I've seen several examples of people coming out of poverty because they believed they could do it. I've never seen an example of someone getting out while maintaining that there was nothing they could do about it. I don't know how to develop agency through the written word.
 
Jacob, you're talking about people having an external locus of control vs an internal one.  It is theoretically possible to shift locus of control, but I think it requires some insight and desire to do from the individual in question.  Might make for some interesting reading though?  Even to think about how researchers in the social sciences set up experiments - how posters or reading material in a waiting room, strategically exposing subjects to overhearing specific conversations, etc, can all influence how subjects respond to the experiment.  Maybe there are ways to "prime the pump" for people to be able to hear the ERE message better. 

Also, it's important to recognize that having an external locus of control is not all bad - most of us tend to veer toward one end or the other, but most healthy is being able to recognize when things are and are not in our control. 

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #25 on: September 17, 2012, 07:44:49 PM »
I'll grant there is some truth to the notion that some people lack agency and/or are more interested in complaining than change, but you have to realize that for the most part, if someone is commenting on a blog, they aren't really poor.
Just because someone says they are poor, or thinks they are poor, doesn't actually make them poor.

A person earning 15k a year is not below the federal poverty line.  They are working class.
The truly not only can't afford internet, they don't even have computers.  Most don't know how to use computers, so they don't even access the internet from the library.  They don't have (working) cars.  They don't have cable to cut.  Some, but not all, have cell phones, and they definitely waste plenty of money on check-cashing places, not to mention cigarettes.
These people exist, but you will never hear them commenting on websites, or read about them in the paper or see them on TV.  I know they exist, because, living in trailer parks from CA to MI to NJ, I have had them as neighbors most of my adult life.

All of you are (rightly) criticizing whiny working class people who make stupid choices.

In any event, the fact that a very vocal subset of working class people are violently resistant to taking responsibility does not mean that there aren't plenty of others who would take responsibility if they only knew where to start.

Consider also that these same people have been taught from childhood that they don't have agency.  Many have been taught by parents and peers that cops and courts are out to get them, that the system is stacked against them, that laws favor the rich - and, while granted, these things can be overcome, to some extent they are right.  This doesn't mean that they can't still find ways to save and potentially pull themselves up, but it is understandable that they don't.

There are always comparisons with immigrants when this topic comes up.  Most legal immigrants are only admitted if they can show a certain level of capital, education, or skill, so they are coming here with an advantage.  Many (if not most) illegal immigrants stay under the poverty line indefinitely.  And that is despite the fact that, yes, they are generally willing to work a lot harder for a lot less pay than any American, rich or poor.

hyacinthE

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #26 on: October 20, 2012, 04:38:11 AM »
If it’s so important for students to learn these subjects in school along with science, math, history, and English, then why are they not getting the right education on everyday money matters to survive in the real-world? Just wondering.

Honest Abe

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #27 on: October 20, 2012, 07:08:45 AM »
If it’s so important for students to learn these subjects in school along with science, math, history, and English, then why are they not getting the right education on everyday money matters to survive in the real-world? Just wondering.

Your question gets to the heart of the modern education debate.

The short answer to your question: Because your wonderful and essential idea is not on "the test."

Now the long answer.

Teachers don't hate standardized tests. As a matter of fact, they can be downright handy. However what's been happening in education since No Child Left Behind and now more recently with Race to the Top is that these standardized tests are being used to:

a) evaluate a teacher's effectiveness (low scores or low year-to-year score growth can lead to your termination) and;

b) possibly be used as a goal for financial bonuses.

So to make a VERY long story and a sore subject for myself as short as possible, if it ain't on the test, it's in every teacher's best interest to NOT teach it. Why? Because they're trying to survive in their careers and navigate the perpetually changing maze of national education policy.

Now before you start banging your head against the keyboard, you can be somewhat comforted by the fact that these classes ARE taught, mostly in affluent school districts like the ones that employ me.

But inner city schools are funded almost entirely by state and federal aid, which is tied to that school entity's compliance with the national education policy of the month (which by the way, is conceived by non-educator politicians and test-making/test-prep companies such as Pearson.) So low-income schools are essentially screwed. So sorry!

What can you do about it? Tell your local and national legislators to get their noses out of our schools and let local communities determine their own curriculum. Should the feds get involved? Sure, but only in extreme cases where the graduation rate is very low. They should leave everyone else, including my own (very successful) school district alone.




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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #28 on: October 20, 2012, 08:55:09 AM »
If it’s so important for students to learn these subjects in school along with science, math, history, and English, then why are they not getting the right education on everyday money matters to survive in the real-world? Just wondering.

Because schooling is not the same as education.

Education is the ability to understand, manage, and control one's environment, that is, the so-called real world. Schooling is the ability to sit still and do repetitive tasks for many hours, every day, all year long. These are different goals.

During the beginning of the industrial massproduction system, the lack of schooling was actually a huge problem. Workers were bored and frustrated doing the same simple action all the time and they would simply go home when they made enough money. Worker retention rates were terrible.

The solution to this was the modern school system when students sit in rows and do trivial/simple/well-specified tasks that are handed out by the teacher (think manager) at the head of the class. All problems are close-ended and pretty much in the form of 1) Here are the components. 2) Don't think. 3) Just perform the correct procedure on them and you will get the right answer.

Schools are essentially turning out employees and they do a good job on it. Schooling has been very successful.

On the other hand, education has been a huge failure. If you want an education in the sense of knowing the real world, some of the important parts of today's environment are the following: the ability to think critically, applied statistics, systems theory, personal finance, an understanding of advertising/psychological manipulation, the ability to build simple things (like tables and shelves), rudimentary appliance repair, clothes mending, how to do your taxes, how to start a business, ...

Of course none of these things are taught in the school system because such knowledge tend to create bad employees. However, if the purpose is to turn out people who are good consumers who are helpless with a job income, the school system works just as it should.

These days people are very well schooled. It's education that's lacking.
« Last Edit: October 20, 2012, 09:56:29 AM by erejacob »

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #29 on: October 20, 2012, 09:13:28 AM »
I dunno, I'm poor and I'm learning.  I don't have much (if anything), but I'm scraping by and saving what little is left to get bad decisions from the past to stay in the past.

The first part, I guess, is to start getting used to the idea of long-term planning.  Another is getting used to the idea of discomfort.

I agree with you.  Get used to the idea of long-term planning first and change your views on the merits of short-term discomfort a bit.  The other part of this is spend time reading books and learning from others' examples.  Take strategic steps.  Good work :).

I don't know. The views on this are so diverse here.  Speaking as a kid who grew up on welfare, I would have appreciated some practical FI advice early on.  We did have consumer's ed in high school which had some info on buyer beware and stocks, but it was not fabulous.  I think there could be a fabulous curriculum for consumers ed based on FI principles.

Finally, personality plays into this a bit.  I am a long-term planner and a thinker naturally. I'm attracted to the ideas on this board. I always saved my Halloween candy and made it last.  Even though I was living in poverty, I could see the power of delayed gratification and got a job and made my way out of it.  More education on FI would have been valuable for me. 

I do believe it would have been valuable for those that don't have the same temperment too though, like my sister, who enjoys spending quite a bit. 

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #30 on: October 20, 2012, 10:50:55 PM »
From my (mostly) insular life in the middle class, my initial reaction was that you couldn't teach in-depth financial skills in school because parents would object.  Too political.  Money has so much morality associated with it (even some religious edicts regarding it?) that it's a sensitive topic.  Think of how offended and judged people feel when you say "I gave up my $4/day Starbucks habit to save money", then aim it in a direction they are ultra-protective about: their kids.

Gerard mentioned delayed gratification, which for those naturally not-so-inclined, is a concept that needs to be introduced in the first place, let alone role-modeled, for them to know it exists.  If you're not naturally a saver, how the hell are you going to know that stashing an emergency fund will save your ass and protect you, when everyone around you just lurches from disaster to disaster?  That would be the norm in your world and you'd manage your finances that way, too.

PJ brought up the need not only for education to be available, but for people to be receptive to it.  Not everyone is lucky enough to have parents to teach and demonstrate good habits from a young age, and lacking that they may not be initially receptive to concepts around FI.  If schools aren't a trusted and respected source of learning, maybe it has to come from a peer or mentor.  "This person from my community achieved X and is willing to sit down and talk to me about it, so I can do it too."  Not massively efficient (and you can lead a horse to water...), but perhaps effective if you consider these skills as best introduced and role-modeled by a parent, and you are now attempting to make up for a lack of that.  "Mass production" doesn't come to mind regarding anything intended to replace a parental role.

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #31 on: October 20, 2012, 11:46:44 PM »

People are discussing whether poor communities/people could accept this but I'm thinking top school districts might resist it as well.  The HS I went to prided itself on having high-achieving professional graduates come out of the gifted class, meaning they wouldn't have dared take time away from the standardized gold that looked good on college apps.  A math class focused on finance would have engaged me, but the admin was convinced all their gifted students were competing for places in STEM programs so AP Calculus was the only way to go.




But inner city schools are funded almost entirely by state and federal aid, which is tied to that school entity's compliance with the national education policy of the month (which by the way, is conceived by non-educator politicians and test-making/test-prep companies such as Pearson.) So low-income schools are essentially screwed. So sorry!

What can you do about it? Tell your local and national legislators to get their noses out of our schools and let local communities determine their own curriculum. Should the feds get involved? Sure, but only in extreme cases where the graduation rate is very low. They should leave everyone else, including my own (very successful) school district alone.

Not to make this political, but these 'let communities/parents decide' plans always seem like non-plans to me.  I don't see why the local communities should be any better at choosing their curriculum than the feds (nor am I clear how "local legislators" are somehow not included in the "local communities").  Seems to me the fed is a mediocre average, meaning, left to their own devices, half the districts will be above average and half below.  Your school and community is very functional.  Many communities are not.  A national system might set the bar low, but at least the floor is set.  Take that away and some inner city schools are just going to implode.  Some rural schools are going to stop teaching evolution.  Etc.

Put another way, some people are idiots, so I'm not in favor of everybody home-schooling their children because plenty of children will be stuck with idiots for teachers.  This means plenty of kids who would have brilliant parents for teachers will miss out.  A national system allows brilliant parents to benefit their kids after school while saving the children of idiots from their parents.  I agree the bureaucracy of the federal system might result in sub-optimal plans, but I can't see what inherent virtue a smaller bureaucracy has that would invariably avoid that.

Honest Abe

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #32 on: October 21, 2012, 06:09:49 AM »


Not to make this political, but these 'let communities/parents decide' plans always seem like non-plans to me.  I don't see why the local communities should be any better at choosing their curriculum than the feds (nor am I clear how "local legislators" are somehow not included in the "local communities").  Seems to me the fed is a mediocre average, meaning, left to their own devices, half the districts will be above average and half below.  Your school and community is very functional.  Many communities are not.  A national system might set the bar low, but at least the floor is set.  Take that away and some inner city schools are just going to implode.  Some rural schools are going to stop teaching evolution.  Etc.


You make some good points, and as I originally stated, I think there is a case for federal intervention if certain places are not meeting basic benchmarks. But my point is why is Jericho, NY... basically one of the most valued public education systems in the country, having to modify it's educational practices to stay compliant with a law that was created to hold failing inner-city schools accountable?

And by "communities" I don't mean mom and pop going to a board meeting and deciding what science textbook to use.. (Although in the past, if you had people approach a school board regularly and demand a financial literacy course be taught then it would probably happen.) I was referring to the teachers and school administrators. These are people with advanced degrees in their fields (depending on what state you're in) and are passionate about their subject areas.

Locally-controlled education brought you NASA, Google, Microsoft, Facebook, Apple.. the list goes on and on.

Top-down policies are the reason why we can't take a 40-minute period out of our day to actually teach kids how to budget and invest their money.

Anyhow I digress.... here is my original point:

FINANCIAL LITERACY IS NOT REQUIRED TO BE TESTED IN PUBLIC SCHOOLS. IT WILL THEREFORE NOT BE TAUGHT UNTIL LEGISLATORS GIVE AUTHORITY BACK TO THE PROFESSIONAL EDUCATORS**

** With the exception, for now, of schools who still have the financial capacity to have it as an "elective" course

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #33 on: November 01, 2012, 05:15:01 PM »
If it’s so important for students to learn these subjects in school along with science, math, history, and English, then why are they not getting the right education on everyday money matters to survive in the real-world? Just wondering.

Because schooling is not the same as education.

Education is the ability to understand, manage, and control one's environment, that is, the so-called real world. Schooling is the ability to sit still and do repetitive tasks for many hours, every day, all year long. These are different goals.

During the beginning of the industrial massproduction system, the lack of schooling was actually a huge problem. Workers were bored and frustrated doing the same simple action all the time and they would simply go home when they made enough money. Worker retention rates were terrible.

The solution to this was the modern school system when students sit in rows and do trivial/simple/well-specified tasks that are handed out by the teacher (think manager) at the head of the class. All problems are close-ended and pretty much in the form of 1) Here are the components. 2) Don't think. 3) Just perform the correct procedure on them and you will get the right answer.

Schools are essentially turning out employees and they do a good job on it. Schooling has been very successful.

On the other hand, education has been a huge failure. If you want an education in the sense of knowing the real world, some of the important parts of today's environment are the following: the ability to think critically, applied statistics, systems theory, personal finance, an understanding of advertising/psychological manipulation, the ability to build simple things (like tables and shelves), rudimentary appliance repair, clothes mending, how to do your taxes, how to start a business, ...

Of course none of these things are taught in the school system because such knowledge tend to create bad employees. However, if the purpose is to turn out people who are good consumers who are helpless with a job income, the school system works just as it should.

These days people are very well schooled. It's education that's lacking.

Don't get me wrong, I am plenty cynical about many elements of the modern public education system.
I even just posted a blog entry on just that topic http://biodieselhauling.blogspot.com/2012/10/education-now-with-references.html

But what you are describing does not remotely describe the experience I had in public school.
(btw, did you even go to public school in the US?  How do you know what its like?)
We were rarely discouraged from thinking.  We had plenty of open-ended problems.  Things like essays, for example, or engineering projects (bridge out of toothpicks, string, and cardboard, atl-atl out of whatever we could think of).  One year we had to research our own family history, and write a book about it.  One test consisted of a book of brain teasers to answer.  In high school polysci class the teacher kept trying to trick us with forms, until we learned to read contracts before we sign them.  In history class we learned about the "Nacirema" people and their strange habits, and watched "The Gods Must Be Crazy" to get us to question our own cultural habits and assumptions.  In junior high all the students put in a few dollars and we collectively bought one share of stock - we all voted on the company, and then the teacher actually bought it for us, and then we learned about the company and tracked its stock performance.  We read and analyzed classic literature and poetry, made independent films, wrote short stories.  Our history teacher told us about the 60s - from his own personal first hand experience.  We built things in woodshop (one of which I have and use to this day).

The reason not all the things on your list are taught is not some conspiracy, its because very few Americans can do those things themselves, including the teachers and administrators who come up with curriculum, so it would never occur to most people to teach it. 

Of course, though we had standardized tests, schools were not funded based on them, so teachers had the flexibility to teach for real, instead of teaching ways to pass standardized tests.  But this is a modern thing, not something inherent to public education.

Consider SummerHill school, which is probably the most child self-actualization focused of any that has ever existed - all lessons are strictly voluntary, students are allowed to do what they like with their time so long as they don't infringe on others, and rules are determined by popular vote, with teachers, students, and staff getting one vote each.  Yet even there they have nothing revolutionary about the lessons themselves. 

Learning to read, write, and do arithmetic are actually pretty vital skills for life.  Nearly everything you listed as important is dependent on those basic skills.  It is a testament to how well education has worked that we are able to take them for granted - realize that for most of human history the vast majority of people did not have these skills.  It is a monumental task to teach reading, writing, math, history, all of the sciences, plus PE and various "electives" to millions of children for 12 years each. 
Of course it has to be done in a classroom, and of course the kids have to be at least somewhat attentive.  What alternative would you propose? 
Not every parent has the time, the skill, the knowledge, or the interest in being a full time teacher.  Without public education ignorance would become hereditary. 
An educated population is necessary for workforce, yes - and much more so for highly complex and technical jobs than for tedious ones. 
It is necessary, too, for democracy to function - which is the real reason it was instituted in the first place.

Yes, of course, there will always be some people, like Richard Finmann, or, I have no doubt, you Jacob, who would have educated themselves from a young age no matter what.  But yall are not the norm.  Far from it.

Our system needs reform, no doubt.  But not having it at all would only make everything much much worse.

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Re: Idea: Extreme Financial Literacy Curriculum for poor/low income families
« Reply #34 on: November 01, 2012, 10:05:02 PM »
One of the biggest problems with public schools is coercion. Meaning, children are forced to learn without little say in what, when or how. This drives down motiviation and their ability to actually learn the material set before them. If you're not interested in stuff, you're not going to learn it well or retain it. It's as simple as that.

Of course, that's not a simple issue to remedy.

Summerhill is a good example of how children can learn well without coercion, but it's not easily replicable.