Economics and Education

MasterOLightning

MasterOLightning

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Jun 3, 2003
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I had Oprah, with guest Suze Orman, on TV tonight, (a great starting point clearly), and I was astounded by how retarded people are about how interest, debt, and financing work. Unless I'm being shown cases that are outside the norm, which I doubt, a significant amount of Americans are dumb as rocks, and have no clue how to handle money. This has to be factor as far as our current financial crisis in the US.

There are likely two places you learn about about money before you are an adult; school and parents. I'm wondering what kind of education people did get or are getting about economics these days. I would think that if the educational system did better, people would not ignorantly be racking up loads of debt. I don't want to solely blame the educational system, since there are areas where the curriculum is certainly adequate and kids still don't learn shit.

I'm wondering what kind of education you all have about economics, especially on a personal sense. I had a macro course in senior year of high school, which touched on how to manage money. In college I took a similar macroeconomics course that was more math intensive. In neither case did I feel like I was being given advice on how to appropriately manage money as an adult. Learning about how supply/demand curves or how the Fed works is not bad information, but from my experience, there should be more of a practical emphasis on personal economic skills.
 
I wonder how much families have to do with it. Growing up, the idea of having any debt was pretty abhorrent, but apparently most families do. I had a modest upbringing, but all the bills were paid in full on time, and my parents came to own a house on a below average income. I imagine in a lot of cases people are living at lifestyles they can't afford unless they're taking on credit card debt each month. This can't be a good message to send to kids.
 
I wasn't taught a thing about money management at school, and my parents showed me little. I just learned as I went, somewhat cautiously most of the way. I only got my first credit card a couple of years ago. I agree better education in school would be extremely beneficial, although I'm not sure whether it is taught more extensively these days than when I was there.
 
I took Economics in highschool but that was mostly about actual economics, not about how to manage your personal money. But my dad is good with money and I seem to have picked that up from him (though my brother has not).
 
I majored in Finance and that didn't even touch on personal finance at all. I really think all students should have to take some form of personal finance course in college or high school. My parents were the catalyst to me saving as much money as possible so that I won't be hurting when I'm on my own and get canned or whatever
 
I hate that Suze Orman show. This is basically her answer to everyone's question:

YOU DON'T HAVE 43289293498234 DOLLARS IN SAVINGS?! DENIED!

Two kinds of people annoy me more than anything when it comes to money:

1) People who just blow money without thinking twice about it, when they are clearly in debt.

2) People who preach saving money, investing money, this and that with your money, and are cheap as hell.

Fact of the matter is, you work to make money and to eventually spend it. Any and all money you come in to possession with should be spent eventually. The difference here is you need to know how to spend it. I look at saving for retirement like I would be saving for some insanely expensive thing I've always wanted. To me when you retire and have saved enough money, you should be using that money to spend on yourself. Treat yourself with whatever you want, do what you've always wanted to do etc etc etc. I completely disagree with saving money up your entire life, for retirement, and for your "kids" and just letting it go to waste. You earned that money, and you should spend it how you want, and rightfully so. I think it's your kids responsibility to support you when you get older, not the other way around. That's what I believe, and that's what I am saving up to do. When my parents retire, I'm goint to help them out in any way I can, while putting back for my retirement as well. But there's no way I'm going to just die with a butt load of cash in the bank having never touched it.
 
I have a bachelors degree in business administration and was also in a program that included business administration in college and personnal finance was never really discussed.

Personnal finance is not really complex...you don't need to understand all the economy to do ok with your money. It's more a matter of knowing how much you make and than have the discipline to live within your means. That's pretty much all there is to it I think. Sounds simple but very few have actually the discipline to live within their means and that's where the problem is.
 
It's why so many people are in credit card debt. They don't have self-discipline and are all 'Oh, I can pay for it later since I don't have the cash' when in reality they won't even have the cash to pay the bill later anyway. People wonder why I always carry cash with me and it's because of things like that.

I'm cutting back on using my credit card now anyway and am only going to use it for gas and some other things for a while. I've thought about just getting rid of it entirely or just not using it at all.
 
No way man, don't get rid of your credit card. Credit cards are great tools to use to boost your credit rating. Besides, you always want something incase of an emergency.

Also, not sure if you knew this or not, but if you cancel a card it looks bad on your credit report. Keeping the card until it expires without any overdraft charges, and constantly paying it off makes your credit look really good.

I also agree with the carrying cash on you at all times too though.
 
Well, I was at the bar with my friend last night and was talking with the deejay (whom I have become friends with) and he said that some places won't even take cash (high end hotels and such) and that's the only reason he keeps one. Otherwise, he always has like 2K worth of bills on him at any one time.

I'm pretty sure of you hand someone a wad of cash in an emergency (like your car breaks down or whatever), they won't turn you down
 
The Ozzman said:
It's why so many people are in credit card debt. They don't have self-discipline and are all 'Oh, I can pay for it later since I don't have the cash' when in reality they won't even have the cash to pay the bill later anyway. People wonder why I always carry cash with me and it's because of things like that.

I'm cutting back on using my credit card now anyway and am only going to use it for gas and some other things for a while. I've thought about just getting rid of it entirely or just not using it at all.
Click to expand...

I personnaly use my credit card a lot. Basically it makes me avoid paying the transaction fees that I'd get charged by using my bank card. There's no fee for using my credit card so I use it for pretty much everything...gas, groceries, restaurants...whatever.

BUT! I always pay it fully at the end of the month. So I use it but always reasonably. That way I've never had to pay the ridiculous interest rate of 20%.

Credit card dept is basically the most retarded form of debt ever. 20% interest...insane.
 
Ben_t said:
BUT! I always pay it fully at the end of the month. So I use it but always reasonably. That way I've never had to pay the ridiculous interest rate of 20%.
Click to expand...

This is what I do. I think the largest balance I had at any one time was no more than 350 dollars (and my limit is 10 times that). I don't see a point in carrying a balance over when the interest is ridiculous (like you said).

Also, I never use my debit card

Yeah but why risk it when you can have a little plastic card in your wallet that is boosting your credit score?
Click to expand...

I suppose if I was to buy a house or condo this would be true. Other than that, if I wanted something like a car, I could pay for that in cash right now, so a credit score would be irrelevant since I wouldn't need a loan.
 
The Ozzman said:
This is what I do. I think the largest balance I had at any one time was no more than 350 dollars (and my limit is 10 times that). I don't see a point in carrying a balance over when the interest is ridiculous (like you said).
Click to expand...

Considering I live with ym girlfriend my expenses are a lot more than you apparently. I'll never have below 1000$ on it a month on average.

Right now I have a lot more because of the Tv, xbox 360, Blu ray player that I bought. I could have paid for all of this cash as I had to money and it was all planned...but I'm getting 1% back (not much but still) and my visa card (the gold one) has an interesting feature. If you buy something with it you get an extra year of warranty on what you buy. So on top of the warranty offered by the manufacturers I'm getting another year warranty that way.
 
My wife is really good with finances. She worked in accounting before our son was born. She has now been at home for 15 years, and more than "earns her keep" with her managing of our finances.

We have a few credit cards and we use them and pay them all of each month. They all come with some financial benefit, so instead of paying interest, we are given money for using the cards.

The problem has to do with people being stupid, with greed and covetousness (forgive the Biblical word :lol:), with how the financial world has changed, and what society has defined the norm. These things overlap and feed each other.

People want newer cars, bigger houses and more crap. People have figured out that they can make money off of money, and they have tried to make this the norm so their plans will work.

The stupidity comes in as far as people not realizing how much they really pay in interest, and in not caring because they really "need" this stuff.
 
My mother is half-Jewish and all my father does is worry about money, so I consider myself the frugal type. CD's are really the only thing I spend my own money on. But I am wary of the day when I have to start managing every financial component of my life. I haven't taken any courses on any scale of economics. I'm screwed.

In contrast, all the people at my school who don't give a shit about academics are Business majors.
 
I'm very good with money i've noticed since i moved from home five years ago, i wouldn't say that i'm cheap, but i'm aware of how much i should spend on unnecessary things. I have a lot of friends who've had to borrow money from their parents because they've spent it all ten days before next salary comes.
 
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