Personal Finance

With all of the hullabaloo in Washington over the debt ceiling, it reminds me of yet another area where our educational system fails our students, and ultimately our country. For the most part, we don’t teach students how money works.

We assume that money is merely an application of math, but it is a system just like Euclidian math, or grammar or stoichiometry are systems for doing tasks. Unless you take an elective or are a banking/finance or related major, you are not exposed to how our monetary system works, how wealth is created and destroyed, how the different areas of the economy have constructive and destructive interference patterns just like light or waves, and so on.

Why is this a topic for this blog? Many reasons. As educators, we need to take a big picture view of our curriculum from time to time to remind ourselves what our expected outcome is from education and if we are achieving that outcome. This in itself is a topic for a different post. Personally, I have realized how personally ignorant I am about the topic and the very real impact it has on my life, and I would like to see future generations learn these lessons earlier. Also, it matters. Christ taught that we cannot serve both God and mammon (wealth/money). We tend to therefore interpret it to mean that good Christians should embrace poverty or at worst, the upper middle class strata. I have learned that the poor can be just as much slaves to their economic condition as the wealthy. It is not the amount of your net worth that determines whether you serve mammon or not, but how it motivates you.

What I came to realize is that if we live paycheck to paycheck, we are working for our money. Thus, in a sense, we serve our paychecks. How much better is it to live in such a way that we have our money as our servant, instead of the other way around. Ordering our lives with this attitude frees us from being a servant to mammon so that we may be a servant to God.

If Coolidge was right, and the business of America is business, then doesn’t it make sense that all students should have at least an intermediate understanding of how the market works? Would they be better employees? Would they be wiser entrepreneurs? For many self-employed professionals (doctors, lawyers, etc.) they spent lots of money learning their trade, while very little attention was spent in their schooling on how to run their practice. Is it any wonder that in spite of large incomes, these professionals have some of the worst financial situations in our country? That the stress of running the business is far greater and takes more energy than the client care that led many into the field in the first place?

There is a difference between materialism and money savvy, or financial intelligence. The first is your attitude towards money and is equally rampant among all socioeconomic classes. The second is how proficient you are wielding the tool of money, so that you are less likely to hurt yourself or others with it, just like any other power tool. Make no mistake, money is a power tool. It is the primary expression of power in this world, more so than much of our defense arsenal, and as Christians we are told to be in the world, not of it, so it behooves us to understand how the tools of power work, so that we are less likely to either be enslaved or blindsided by its misuse by ourselves or others.

Tonight at a party, a group of us was discussing these kinds of issues, and I had a brainstorm. I suggested to a couple with small children that they give their kids an internal ‘credit card.’ If the child is in the store and wants something, the parent buys it, then at the due date each month, the child is expected to make a payment to the parent. If the entire balance is paid, then all fine, but if not, interest starts accruing, and they learn within the safety of the family the dangers of consumer debt before they start receiving those offers in the mail. The couple loved the idea. Of course, how this plays out in practice is more involved and many things need to be thought out, but it is one way of helping kids learn early.

There is lots of room for creative ways of teaching money lessons to kids about any aspect of it. We can do the same in our classrooms. Even in other subjects, we can creatively incorporate economic lessons into the curriculum. In my field, physical chemistry, for example, I can have students learn how experimental conditions can be optimized to maximize yield and minimize the amount of equipment, chemicals and energy, and that such concerns are complex, not always obvious, and yet critical in making a product profitably with minimum environmental or other costs. In organic chemistry, they can be taught how to turn necessary byproducts of a reaction into marketable products that reduce waste and provide more revenue.

There really is no end to the benefits of an economically savvy citizenry. It is also consistent with our divinely given roles as stewards of Creation.

SDG