Why don’t they teach this stuff in school? Is there some sort of conspiracy to keep us working our entire adult lives until our bodies give out and we’re forced into a retirement that almost perfectly coincides with the social security benefit age? Oh wait, maybe that’s the way it IS intended to be. You go to school, you work, you retire for a few years, and then you check out. If you ask me, that sounds like a completely uninteresting and grim prognosis. Why am I babbling on and on about this? Because it’s no secret that most people, and especially young(er) people, have no idea what the heck they’re doing with their finances. This very thing was thrust into my face this evening when I was enjoying a nice dinner with a friend who is in her late 20s. Somehow we got on the topic of money…this must’ve happened because I was there 🙂 The conversation rolled on from there. And I experienced, first-hand, the uninformed state of our union.
“What’s An IRA?”
As we sat there enjoying our dinner and conversing about college, debt, and a combination thereof we drifted into unchartered territory for my friend. We were listing the pros and the cons of different career paths she was considering and when I threw out the idea of starting a ROTH IRA account to save for her future and safeguard against emergencies at the same time, she threw back this question, “What’s an IRA?” As I explained what the acronym stood for and how it could be used, more questions came my way. “What’s a brokerage firm? What’s Vanguard? How does the stock market work?”
Now I love talking about this stuff and passing along the knowledge I have taking up space in my noggin, but as I went on and on trying to explain the connection of one to the other, and how the biggest asset anyone can have is time, I realized that the my friend is only one speck in a sea of drowning ocean of misinformed people. How’s that for a visual? Unfortunately, it’s true. I also must add that this friend of mine is one of the smart ones. She is a smart cookie who can debate anyone under the table. Yet, somehow our public education system had failed her in this area.
“How Do I Start?”
After about 30 minutes of me excitedly laying out the basics of saving and investing (did I mention I love this stuff?), the next question was asked with enthusiasm, “How do I start?” I kept going. I gave her options and things to think about that she had never considered before. I was able to give her a basic idea of what’s going on in the financial world and what should be going on in her financial world.
The State Of Our Union
Before she left for the evening, I suggested she read (some of my favorite) financial blogs and listen to (some of my favorite) financial podcasts to jumpstart her financial education. She seemed happy to have had a tiny boost in the right direction. But how many other people never get that boost? Considering the amount of money people have saved for retirement in each age group (see below), I’m guessing not too many.
Being a young Gen-Xer myself, I see it all around me nearly every single day. I see co-workers who say they’ll never be able to retire and scoff at my lofty goals of having enough in savings to walk away from The Man in a few years. I see friends buying cars they can’t afford and I see those same friends wondering how they’re going to pay their rent. This is the unfortunate state of our union without financial education.
What do you think? Where did you get your financial literacy? Did you learn it in the classroom, at home, or in books and on the web? How are you teaching your children (if you have them) about money? We’d love to hear from you in the comments!
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