I loved this title of a recent post at Get Rich Slowly: If Personal Finance is Easy, Why Isn’t Everybody Rich? The post talks about the fact that getting rich is about more than just knowing what to do - it's just as much, if not more, about whether you are emotionally and mentally able to do what you know you need to do:
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Economics vs. personal finance
Choice and responsibility: self-help or just good economics?
Human beings are complex creatures. Some of us are highly logical. Some of us are emotional. Most of us fall someplace in between. We rarely make decisions based on optimal paths; more often, we choose what makes us happy in the short term. I’m not saying that this is the right thing to do — it’s just what happens. For those who routinely make financial decisions based on emotion, it can be difficult to turn things around.This is why I believe it is much more important for high school students to be well-trained in economics, before we start worrying about their knowledge of personal finance. Economics puts human behavior front and center, pointing out over and over that whether you want to admit it or not, life involves trade-offs. I simply don't think that knowing the 'rules' of good personal finance will be much help to someone who doesn't truly understand the more foundational concepts of opportunity costs and cost-benefit analysis.
Related posts:
Economics vs. personal finance
Choice and responsibility: self-help or just good economics?
I agree that econ is a good basis for an education in finance, but I think people can learn the basics without having to understand economics. Really you just have to teach them to invest for the longterm, the problems with collecting debt and various products that people can invest in. I think that's probably all most people need.
ReplyDeleteMy concern isn't so much that people can't understand the basics of finance without economics - I absolutely agree that they can. But there are a lot of people who presumably 'know' what to do but don't actually do it (at least, that was the point of the post on Get Rich Slowly) and I think economics is more about training people to make better choices. My original post was also more about whether financial education should replace economics education in school curriculum - given those two options, I think econ is more useful since it is the foundation for finance plus a lot more.
ReplyDelete"People know what to do and don't do it"
ReplyDeleteWe can say the same thing about learning or knowing anything, couldn't we? I mean information abounds about the consequences of not exercising, smoking, eating too much bacon and ice cream. We observe people who appear to make smart decisions in some arenas but don't make them in others. Psychologists likely have answers, religion does too, maybe even sociology. It's one of those human condition things that makes education such a messy endeavor.
I wouldn't reduce it to "motivation" either, there are just too many ways to slice that concept and it can't account for a lot of examples.
One way to think about it, is to think about metacognition (thinking about thinking) or in this case, thinking about learning. If you'd agree that we do most of our learning throughout life outside of classrooms and experientially, then it's an interesting thought experiment.
There's something in helping students think about learning,when they've learned something and what they did, what facilitated that
I heard this pearl of wisdom from a classmate, a 21 year old man (I'm 48) who's also very bright. We were talking about being efficient as a student and why we thought it was an important skill to have. He said, he's basically lazy, and doesn't want to spend any more time on anything than he has to. It completely resonated with me and I've taken that explanation on too.
Two things about this story I'd like to share. First, he clearly thinks about thinking already at 21. It might be his personality type, or learning style (Gardner's intrapersonal). Second, I learned instantaneously from that exchange. It's a bit of knowledge, even wisdom, I immediately recognized as wanting. It's a piece of knowledge I know I'll share too.
At the macro level, the issue might go something like this: We don't live in a culture that values education, really. We argue constantly about what it's purpose is.
Also, there's an ongoing tension between Jacksonian and Jeffersonian ideals of democracy and education. The former underpins the idea that everyone should be educated. The latter sets the individual at the center, allowing for an elite class.
If you believe that learning involves adopting identities, ways of thinking and believing then not learning can also be seen as resistance, rebellion and cultural pride. Class, race and gender have a lot to do with the decisions and desires to learn.
This is a classic:
Learning to Labour: how working class kids get working class jobs - Paul Willis (1977