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'Striking weaknesses' in adult financial skills

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Re: 'Striking weaknesses' in adult financial skills

#121

Post by sangnoir »

skybrian wrote: post #118
tboyd47 wrote: post #93

Earlier quoted context omitted.

Anything involving the stock market is far from simple. And "don't spend money on stupid things" is more class signaling than financial advice. Who decides what is "stupid?" If it's important to you, why not estimate how much of an impact the purchase will have on your budget, and decide based on that? That requires math. I dunno, I do arithmetic in my head just about every day. I can't imagine engaging in any sort o…

I think what we're seeing here is a class difference? For some people, if the grocery bill is higher than expected, you just shrug and try to do better next time.

> For some people, if the grocery bill is higher than expected, you just shrug and try to do better next time.

I knew I had crossed some class boundary when I found myself not paying close attention to the running total at checkout. There is a difference in mindset for people whose budgets are rounded to the nearest $1, $10 or $100 respectively.

Re: 'Striking weaknesses' in adult financial skills

#122

Post by scarface74 »

megaman22 wrote: post #75
scarface74 wrote: post #24

Earlier quoted context omitted.

This reminds me of the myth of the "Latte Factor". http://www.slate.com/articles/business/the_united_states_of_...

The "Latte Factor" is a real thing. Not necessarily by itself, but it is indicative of a larger systemic problem.

The systemic problem is not your discretionary spending much of the time. You can easily adjust that up or down as the need arises. It's the lifestyle inflation - buying a bigger house, nicer car, etc.

Those aren't easy to ratchet down quickly.

Re: 'Striking weaknesses' in adult financial skills

#123

Post by gknoy »

grondilu wrote: post #35
volgo wrote: post #3

Some of the skills tested in the study seem more like arithmetics rather than financial skills: - "About a quarter could not work out how much change they should receive from a shop..." - "About one in three adults struggled to work out the price they had to pay.. per litre or per kilo" - "About half could not read a simple financial line graph" - "Most struggled to calculate discounts involving more complex calculat…

> I mean.. people can't do math in their head. Who cares? I kind of agree. I guess I can answer to the first question : "If you bought four packs of tea: chamomile ($4.60), green ($4.15), black ($3.35) and lemon ($1.80) with a $20 note, how much change would you get?" but to be honest, it would take me an embarrassing long time to do it, and in the end I could very well have made a mistake. Don't get me wrong : menta…

My reply would be "around five dollars, and if you want more let me whip out my phone's calculator". :D

Now that I use a calculator, the tea adds up to just under $14, lower than my estimate of 15, but the taxes we non-Oregonians pay end up bringing it to a bit over $15. `sum(ceiling(price))` seems to be a useful way to estimate when the prices are small.

Re: 'Striking weaknesses' in adult financial skills

#124

Post by hackerman12345 »

AnIdiotOnTheNet wrote: post #107
jandrewrogers wrote: post #4

These aren't even "financial" skills but a lack of basic arithmetic ability. It is a failure of the education system. I expect if we tested for actual financial skills the results would be even worse, as that requires some domain knowledge beyond basic arithmetic. I'm not sure this is easily fixable; most people I know have a very limited interest in understanding financial maths.

I don't think the education system is at fault. Mental arithmetic is a skill you need to practice, and since a lot of us either spend a lot of time at a computer or always have one in our pocket, why would we?

Here are the questions, if you can't get them correct without a computer handy, than your education is suspect. I would expect them to appear in a 3rd grade math book.

1. If you bought four packs of tea: chamomile ($4.60), green ($4.15), black ($3.35) and lemon ($1.80) with a $20 note, how much change would you get?

2. If a litre of cola costs $3.15, how much will you pay for a third of a litre?

3. If a football club offers the same discount for all season tickets - Main Stand - $50 for single entry, $300 for a season; Stand 2 - $35 for single entry, $210 for a season; Stand 3 - $25 for single entry, $150 for a season - what would the price be for a Stand 4 season ticket, where a single entry costs $21?

The answers are $6.10, $1.05 and $126 respectively.

Re: 'Striking weaknesses' in adult financial skills

#125

Post by rbcgerard »

_ah wrote: post #11
Kuiper wrote: post #8

Earlier quoted context omitted.

Especially when you consider that most supermarket labels will also include the "price per unit weight" or "price per unit volume" on the shelf with a smaller font, it becomes trivially easy to compare which bottle of soap is going to get you the most for your money. Or maybe you neglect to do this (simply opting for the container that looks the most appealing rather than optimizing for the amount of liquid per dolla…

I've started noticing some sneaky math in my local supermarket. When comparing two items, both list the unit price, but they list the price in different units. Example: A 1.4-lb package lists the price per oz, while the 0.8-lb package lists the price per lb. In every case, the intent seems too be an attempt to induce math errors and cause someone to accidentally purchase the package with the higher true unit price.

I’ve noticed some weird anomalies as well like if there is a small, medium, and large size package the large sized package isn’t always the cheapest per unit - as they assume customer will just assume the largest packages has the lowest per unit price

Re: 'Striking weaknesses' in adult financial skills

#126

Post by sokoloff »

scarface74 wrote: post #45
sokoloff wrote: post #28

Earlier quoted context omitted.

It's an exaggeration more than a myth, IMO. It's directionally correct, meaning no re good would be done by people considering it than ignoring it.

What instead of the "Latte Factor", they said... - buy a house that is well below your means or even move some place where your cost of living compared to your money earning potential is favorable. -Get a degree in something that can make money instead of a BS in Ancient Chinese Art History. -Don't go into debt getting a degree from a prestigious college to be a high school teacher. Go to a cheap state school. -Buy a…

I agree with a lot of what you say. I think from a practical standpoint, a latte factor blog post can get people interested in a way that a checklist of 10 big things that would all be "better" never will. Latte factor seems totally doable.

Get them in the door with latte factor. Let them read the whole rest of Mr Money Moustache in due time.

(Not to take much away from the results of your job changes and negotiations, but that's just under 5% CAGR. If you are early in your career in tech, lots of people can meet/beat 5% annually. Later is harder of course.)

Re: 'Striking weaknesses' in adult financial skills

#127

Post by scarface74 »

sokoloff wrote: post #126
scarface74 wrote: post #45

Earlier quoted context omitted.

What instead of the "Latte Factor", they said... - buy a house that is well below your means or even move some place where your cost of living compared to your money earning potential is favorable. -Get a degree in something that can make money instead of a BS in Ancient Chinese Art History. -Don't go into debt getting a degree from a prestigious college to be a high school teacher. Go to a cheap state school. -Buy a…

I agree with a lot of what you say. I think from a practical standpoint, a latte factor blog post can get people interested in a way that a checklist of 10 big things that would all be "better" never will. Latte factor seems totally doable. Get them in the door with latte factor. Let them read the whole rest of Mr Money Moustache in due time. (Not to take much away from the results of your job changes and negotiation…

Let's just say I'm not early in my career and 33% is taking into account a $15000 paycut by my wife and we still ended up in the 90th percentile of household income....

I'm not bragging. Any dual income household with one being a senior developer in a major city could do it.

Re: 'Striking weaknesses' in adult financial skills

#128

Post by walshemj »

smcl wrote: post #109
walshemj wrote: post #85

Earlier quoted context omitted.

I meant socially those in the stem professions are looked down on.

By whom? I have not experienced this at all. STEM jobs are by UK standards well paid and would be considered solid respectable to enter by everyone I can think of. Unless you're comparing the salaries in these to those of Bankers ... but that's a whole different kettle of fish, and there's the added complication that Bankers are actually actively disliked by an overwhelming majority of the population.

No actually real science jobs are paid appallingly I know what say the STEM grades in the civil service are paid.

And even developers are paid badly when compared to our peers in the states and with other professions in the UK.

Compare what google pays in London to what it pays in say Kansas I could buy a house there (Kansas) out if my cash savings

You do know that the train driver on my commute to London is paid £60k for a 4 day week and most of them after overtime are on >£75k with a DB pension!

The UK has been known for decades as a place to get good engineers cheap.

Re: 'Striking weaknesses' in adult financial skills

#129

Post by watwut »

prepend wrote: post #71
watwut wrote: post #55

Earlier quoted context omitted.

Majority of students go for practical or practically sounding degrees. And those who dont are clustered among students from more rich families. The "students are choosing impractical degrees" is just a way to ignore actual economy problems and blaming result on students.

What is the breakdown of degrees? What source leads you to think most have practical degrees? I found this link, https://nces.ed.gov/programs/coe/indicator_cta.asp , that says “Of the 1.9 million bachelor's degrees conferred in 2015–16, over half were concentrated in six fields of study: business (372,000 degrees), health professions and related programs (229,000 degrees), social sciences and history (161,000 degrees…

Definitely practical in order: business, health and related, engineering, biology, psychology. Some of science, whether history or social or biomedical wont be practical. How did you came to "most are not practical" from that breakdown?

The worst off are those who did not finished school, but still paid some of it. These are not in your stats, they have no degree.

Besides, those who finished college do better then those who did not in pretty much all stats. They do worst then previous generation. You people make it always sound as if average college graduate was worst off then high school drop outs. It is not the case at all, while college graduates dont have great lives on average, those who finished with high school have it even worst - on average.

Re: 'Striking weaknesses' in adult financial skills

#130

Post by antisthenes »

gknoy wrote: post #123
grondilu wrote: post #35

Earlier quoted context omitted.

> I mean.. people can't do math in their head. Who cares? I kind of agree. I guess I can answer to the first question : "If you bought four packs of tea: chamomile ($4.60), green ($4.15), black ($3.35) and lemon ($1.80) with a $20 note, how much change would you get?" but to be honest, it would take me an embarrassing long time to do it, and in the end I could very well have made a mistake. Don't get me wrong : menta…

My reply would be "around five dollars, and if you want more let me whip out my phone's calculator". :D Now that I use a calculator, the tea adds up to just under $14, lower than my estimate of 15, but the taxes we non-Oregonians pay end up bringing it to a bit over $15. `sum(ceiling(price))` seems to be a useful way to estimate when the prices are small.

Hah, the tax calculation almost certainly would mean that I would get it wrong!

I would have given the plain arithmetic answer.

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