Learning About Money Changed My Life — But Not In The Way You’d Think

Learning About Money Changed My Life — But Not In The Way You’d Think

Whizy Kim   Wed, August 18, 2021

Up until a few years ago, I knew less about money than the average person. At least, that’s how it felt. The extent of my financial philosophy was a) try not to spend what you don’t have and b) try to make your student debt vanish. If someone was talking about the state of the economy, I only responded with neutral, noncommittal noises, rather than voice any specific thoughts.

The exchange of money in society was this impossibly intricate machine that a regular person like me could never begin to comprehend. The GDP? Sure hope it’s doing great! Trickle-down economics?  Sounds suspect, but if all these economic experts and politicians are saying that tax cuts for the wealthy means we all win, who am I to disagree? Would they really just lie to everyone? (Actually, don’t answer that.)

No one wants to admit that they don’t know how money works. It’s way easier to confess that you know nothing about cooking or cars. But, if you don’t know how money works, as an adult? Well, it’s no wonder you’re so behind on getting your shit together; it’s no wonder you’re not rich. From admitting how little you understand about personal finance and the economy, it’s a quick slide to being given the “personal responsibility” lecture, and being told you put yourself in less-than-ideal financial straits. It’s nobody’s fault but your own.

Except, that’s just not true. A big reason why so many people don’t know about how money works is that many of us never got any formal — or informal — education on money. And not learning about money can be expensive. Plenty of smart people look at their various student loans and think intuitively that it’s more beneficial to pay off the $3,000 loan in one lump sum, and then start tackling larger ones, instead of prioritizing the highest-interest loan regardless of balance.

Maybe if we all had even just one compulsory high school class that introduced basic money concepts like taxes or how interest is applied to the principal, there would be less confusion around tackling debt. I learned how to find the derivative of a function at 16, but didn’t learn what marginal tax rates were until my 20s — and that really doesn’t seem right.

But even beyond basic high school courses, the issue is that many of us also form a single perspective of money, or only one way of talking about it, thanks to our family. And if that perspective is to not talk about money, as is often the case, that means we have that much less practice in, well, talking about money — especially in a healthy manner.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/learning-money-changed-life-not-144617033.html