Comment by pradn
18 days ago
> Teaching financial concepts in a classroom is like teaching swimming with PowerPoint slides. You can explain the theory of the butterfly stroke all day, but at some point you need to get in the water. And with money, the water is always cold, deep, and full of currents that weren’t in the textbook.
It is totally true that these extra-mathematical factors have a big part to play how we spend and how we save. If you’re in a certain culture that expects a certain level of spending, it’s hard to take yourself out of that.
I still don’t see even adults with a good idea of basic financial things. How much does it cost to buy a house? How does a monthly payment change with interest rates? How do you become eligible for Social Security?
You really need to keep these several-dimensional functions in your head. At the least, a good grasp of algebra is required.
> I still don’t see even adults with a good idea of basic financial things. How much does it cost to buy a house?
Big part of that is because the answer is "twice as much as 10 years ago", which is simultaneously mindboggling, appalling, and hard to keep track of.
The list price of a house going up is a big part of it.
But I don't think people actually have an idea of how much more a house of the same price costs when interest rates go from 2.5% to 7%. For a million dollar house, that's an extra thousand or two a month.