# Basic Financial Literacy - why is it SO uncommon? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [March 29, 2023, 3:10pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841 "2023-03-29T15:10:24Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [March 30, 2023, 2:24am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/81 "2023-03-30T02:24:47Z")
> [@Sam\_Stone](#): > > A big part of the problem isn’t math - it’s the inability to defer pleasure into the future instead of having the pleasure now and deferring the cost into the future. I would put this slightly differently. Some people, for whatever reason, appear to have a high “discount rate”–often 100%/yr or more. That is, they’d prefer to have $100 now than $200 in a year. These people don’t see the problem with credit card debt at 21%, and would never go for that 15% ESPP discount (which is actually a 17.6% gain) if it meant tying up their money for a significant amount of time. They’re happy to take payday loans or use rent-to-own services with absurdly high effective interest rates. Unfortunately, those people will always find themselves on the short end of the financial stick. I don’t think education alone can fix this problem; they’re behaving rationally _given_ the belief that money in the future is worth that much less. The problem is somehow deeper than that. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [March 30, 2023, 3:54am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/82 "2023-03-30T03:54:19Z")
> [@Kropotkin](#): > > Try that with toilet paper: different prices, different numbers of rolls in a package, different numbers of plies, different numbers of sheets on a roll, different sized sheets, different levels of quality…Now do that with every item in your shopping cart. Next week, do it all again. Uh, they list square footage/meters on the package. You can compare them by that pretty effectively. But beyond that, what you’re talking about is _exactly_ what I’m talking about. Stuff like toilet paper, sorting M&Ms, etc… is not that important. It really doesn’t matter in the grand scheme of things, unless you’ve got some sort of ass problem that requires specific toilet paper. But being financially savvy is something that can make a REAL difference in your life- it’s well worth cultivating that skill. If nothing else, it keeps you from being gulled by unscrupulous lenders, car salesmen, and the like. > [@ASL\_v2.0](#): > > All that to say, I cringe when I see lack of “take” for matching 401K schemes put forward as an example of financial illiteracy, rather than what it really is: yet another example of how wage laborers are exploited by the job market. I don’t know… I’ve worked in places with woefully low 401k participation, and I’m talking about the IT departments of billion dollar companies. People who are reasonably well educated and compensated, and most of which _should_ be able to afford to put money toward retirement. Or savings. I’m not talking about “highly compensated employees”, just regular, everyday salaried folks making in the 60-120k range. Yet when you mention things like being able to set up direct deposit to automatically chuck some arbitrary amount of money into a savings account every check, they look at you like you’re insane, as if nobody would ever want to willingly put $250 per check into their savings account automatically. Or that the company matches your contributions up to some arbitrary amount, etc… so it’s a good idea to make sure you at least save that minimal amount just to essentially double your investment right out of the gate. > [@suranyi](#): > > The key is, how sure are you that the student loan rate will stay at 2%, and how sure are you that the investment will stay at \> 2%. If either is not 100% sure, your risk profile must be taken into consideration. 100% sure it’ll stay at 1.5%. Those are the terms of my loan- it’s a fixed rate loan for a 20 year term. Whether or not investments will stay higher than that, I don’t know. But historically, over just about any 20 year period, the return has generally been considerably over 1.5%, even considering the various dips due to recessions and the like. ---
**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\ **Post date:** [March 30, 2023, 4:15am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/83 "2023-03-30T04:15:03Z")
> [@bump](#): > > But being financially savvy is something that can make a REAL difference in your life- it’s well worth cultivating that skill. If nothing else, it keeps you from being gulled by unscrupulous lenders, car salesmen, and the like. Agree with all this. But, I would suggest one doesn’t even need to be financially savvy. The OP is asking about “Basic Financial Literacy”, which should be somewhere between being able to balance a checkbook and paying your bills on time, and knowing when to rebalance your retirement accounts. I don’t think those who pass on participating in a 401K because they have constraints are financially illiterate. But knowing how to save short- and long-term, understanding how a 401K and a IRA work, being able to determine what’s good and bad debt, and yeah knowing how not to get ripped-off or taken advantage of - these are base-level financial skills that can help build financial stability. It’s not hard to learn about these things, but yeah, it can take a little effort. ---
**Author:** ![Odesio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/odesio/32/20003_2.png) [@Odesio](https://boards.straightdope.com/u/Odesio)\ **Post date:** [March 30, 2023, 5:19am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/84 "2023-03-30T05:19:12Z")
> [@ASL\_v2.0](#): > > Consider also that maybe it’s not that the people who don’t contribute to the 401K are just too stupid to see the value in it, rather that they have more pressing/immediate needs for their money (for example, student loan debts or medical expenses) than retirement savings than long-term retirement plans. I work in HR, mostly benefits these days, and there are a lot of employees who make sub-optimal choices with their elections. I don’t think they’re stupid, mostly I think it’s a combination of being overwhelmed at a new job and that some people simply don’t read anything about their options. Almost every week, I have to contact a new hire who elected the high deductible health plan to make sure they intentionally waived the health savings account. The vast majority of times they waived it either on accident or because they didn’t understand what it was. I wouldn’t say they were stupid though. And even the ones who don’t contribute to their 401(k) aren’t stupid either. I think many of them are a bit short sighted, but so was I when I was their age. I don’t know if I would have participated in the 401(k) when I was in my twenties as retirement seemed like a million years away. > [@ASL\_v2.0](#): > > Which, again, shows how matched 401K contributions might really just be a way for employers to conceal how exploitative and manipulative they are. Because, again, they are choosing to offer this kind of compensation not out of the goodness of their hearts but, presumably, because they consider it to be more cost effective than just offering straight up cash for each worker to do with as they choose. When it comes to recruitment, most candidates are more interested in their base pay than they are the benefits. I’ve only been asked about benefits from a candidate a handful of times. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [March 30, 2023, 5:23am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/85 "2023-03-30T05:23:41Z")
> [@bump](#): > > I mean, explaining the last example to some people causes them to give me looks like I’m explaining the finer points of how to sacrifice babies to summon demons or something like that. And yet it’s basic math - investing X at 3% and paying X at 2% means that you’re _making 1%_ over time. There are any number of rules of thumb in life that people apply rigidly even though – if you know what you are doing – you will get a better result if you depart from those rules. Most of the time (particularly after taking tax into account) you will lose more paying interest on a loan then you will gain by investment of the loan proceeds. Somewhat ironically, given the subject of this thread, I think one of the reasons that even financially literate people look askance at you when you explain your above proposition is that they are concerned that financially illiterate people will misapply your insight, and lose money. Rather like a parent might take umbrage at me explaining to their child that - actually - when you do it right playing with fire is really fun and not that dangerous. ---
**Author:** ![nate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nate/32/13085_2.png) [@nate](https://boards.straightdope.com/u/nate)\ **Post date:** [March 30, 2023, 5:24am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/86 "2023-03-30T05:24:04Z")
Meh… many people, and I assume many because I feel like this and that must mean others do too, often value the stress of having debt plus a risky investment to be less valuable than a debt paid off, regardless if I’m missing out on that whopping 1%-2% of interest I’d otherwise be making for “free”… if things go according to plan. It’s the same reason I maximize my tax withholdings throughout the year. I’d rather get a check for $20k of my own money and have my family live within my paycheck throughout the rest of the year because it’s just easier for me to save for big things that way. I don’t give a fuck about the 0.9% interest I would make if I had the discipline to pre-calculate my yearly taxes and have that money sit in a risk-free savings account. It is just not worth it for me… not to mention, I know in reality that shit would be spent if the gov’t didn’t withhold it. But a big chunk at once? That I can hold onto to. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 30, 2023, 6:27am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/87 "2023-03-30T06:27:43Z")
> [@Just\_Asking\_Questions](#): > > What people need to do is stop taking payday loans! It’s a predatory market designed to suck money for poor people. > > The latest stupidity I see is those commercials for services where you can get your paycheck a day early (no doubt with some “fee”). So, you currently get paid on Friday, but your money runs out by Thursday. So you shift your “payday” to Thursday. Then what happens? In a couple weeks, you run out of money on Wednesday. Do you shift your payday to Wednesday, perhaps with another “fee”? Well, that’s true, but my daughter did a study, which got published, showing that these people are not quite as dumb as it may seem. They have credit cards with fairly low limits, and they don’t want to max them out since if they have an emergency they’d have no buffer. So, a payday loan, ripoff as it is, might preserve their options. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 30, 2023, 6:49am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/88 "2023-03-30T06:49:26Z")
> [@Odesio](#): > > I work in HR, mostly benefits these days, and there are a lot of employees who make sub-optimal choices with their elections. I don’t think they’re stupid, mostly I think it’s a combination of being overwhelmed at a new job and that some people simply don’t read anything about their options. Almost every week, I have to contact a new hire who elected the high deductible health plan to make sure they intentionally waived the health savings account. The vast majority of times they waived it either on accident or because they didn’t understand what it was. Do you default to signing up for 401Ks or must people opt into it. I think the law changed during the Obama years to make it a default, based on research by Thaler and others showing that people tend to take the default action. In one study they found that changing the default to choosing the 401K increased sign up rates, but they made the default amount 2% instead of the top of 6% and people’s contributions went down. A lot of financial illiteracy is just how we’re wired. I’m good with discount rates and interest calculations, but I suffer from loss aversion, and it pays me to pay a financial consultant so I don’t make bad decisions - which I did back in 2001. > [@Le\_Ministre\_de\_l\_au-dela](#): > > I can only speak for myself, but - if I were financially literate, I would be in a completely different line of work. I am a musician/actor/writer because that’s what I’m good at, not because of the financial rewards. I disagree. Choosing to do a lower paid job that you love instead of a higher paying one you hate has nothing to do with financial illiteracy. I know someone who wanted to be an art historian, but her father forced her into a business career. She made money, but she was miserable and retired as soon as she could. Now not computing the cost of apples might count, but for most things there are unit prices written in small characters on the shelf tag. I do math in my head for fun (it’s genetic, my daughter and grandson both do this also) but the unit prices are for those who don’t enjoy doing math. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [March 30, 2023, 7:49am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/89 "2023-03-30T07:49:05Z")
To answer the OP, I think this really boils down to upbringing. If you grew up in a tough family where debt meant you always couldn’t have this or have that - picture a struggling family trying to pay off some huge medical bill, or whatnot - you could have it scared-imprinted into your mind that all debt is bad, bad, bad and you must pay it off at once whenever you can. Hence why someone with $20,000 in loans, who comes into possession of a $20,000 windfall, would feel the instant urge to erase that nagging, prickly, uncomfortable debt all at once, like someone scratching a powerful itch. On top of that, a lot of financial illiteracy is dressed up as common sense. It makes intuitive sense to the human psyche that “all debt is bad, save as much as you can, be frugal” - it was hard taught into you by your parents, grandparents, etc. and it’s simply what feels naturally logical. The idea of “you should spend money to make more money” comes across as deeply uncomfortable. ---
**Author:** ![actualliberalnotoneofthose](https://avatars.discourse-cdn.com/v4/letter/a/e79b87/32.png) [@actualliberalnotoneofthose](https://boards.straightdope.com/u/actualliberalnotoneofthose)\ **Post date:** [March 30, 2023, 10:23am UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/90 "2023-03-30T10:23:13Z")
I believe that my literacy is high but my execution is far from ideal, for many of the reasons mentioned. I grew up in scarcity and I’ve been in some form of survival mode most of my life. I’m pretty savvy with moving money around, getting my needs met, helping my kids keep their teeth, stuff like that. But I’ve never been good at achieving mainstream financial lifestyle like making a sufficient income while maximizing retirement planning, investing, low as possible interest home ownership, being able to pay my credit cards off every month and not depending on debt to buy groceries and electricity and that sort of thing. I’m mostly just scraping by while using a variety of loan products, mini-windfalls, etc. Sometimes I do things that don’t make sense to anyone else but I can rationalize as a good ROI due to priorities, time value, etc. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 30, 2023, 12:49pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/91 "2023-03-30T12:49:56Z")
> [@Voyager](#): > > Do you default to signing up for 401Ks or must people opt into it. I think the law changed during the Obama years to make it a default, based on research by Thaler and others showing that people tend to take the default action. In one study they found that changing the default to choosing the 401K increased sign up rates, but they made the default amount 2% instead of the top of 6% and people’s contributions went down. I don’t know what occurred earlier, but there was a SECURE Act in 2019 that IIRC gave a tax credit to companies that auto-enroll. SECURE 2.0 got signed in December. It requires auto-enrollment with escalation. There’s definitely an effort component here. The vast majority of employees don’t opt out once they’re enrolled. Likewise, I have ~$5k earning next to nothing stuck in an account with some administrative issues that requires notarized forms. It’s been on my to-do list since before the pandemic. ---
**Author:** ![Kropotkin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kropotkin/32/18045_2.png) [@Kropotkin](https://boards.straightdope.com/u/Kropotkin)\ **Post date:** [March 30, 2023, 1:01pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/92 "2023-03-30T13:01:47Z")
> [@bump](#): > > But beyond that, what you’re talking about is _exactly_ what I’m talking about. Stuff like toilet paper, sorting M&Ms, etc… is not that important. It really doesn’t matter in the grand scheme of things, unless you’ve got some sort of ass problem that requires specific toilet paper. My point was simply that even small decisions of the sort we all make daily, without doing toilet paper math or sorting M & Ms, lead to decision fatigue and make it harder to make more important decisions. And I would go out on a limb to suggest not having enough money forces you into more decisions with real consequences over the course of the day. It’s easy to say “don’t sweat the small stuff” when you have the relative luxury of time, money, and brain bandwidth to avoid “small stuff” that is crucial for others. As for toilet paper more precisely, the point was simply people are often told to be smart consumers to better manage their money. Among other things, we’re advised to do cost comparisons, meaning “make dozens of choices just to buy groceries.” That’s exhausting, mind-numbing, probably futile, and frustrating. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 30, 2023, 1:05pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/93 "2023-03-30T13:05:44Z")
> [@suranyi](#): > > The key is, how sure are you that the student loan rate will stay at 2%, and how sure are you that the investment will stay at \> 2%. If either is not 100% sure, your risk profile must be taken into consideration. Federal student loan rates are or at least can be fixed. If the investment changes, you can plow the money back into debt. Take for example my fixed rate mortgage, which has a lower rate than my savings account. I had been paying a bit extra each month toward the mortgage. That now goes in the savings account. If (when) the savings account rate drops, I can just make a lump sum payment toward the mortgage. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [March 30, 2023, 1:16pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/94 "2023-03-30T13:16:35Z")
> [@k9bfriender](#): > > It’s not something taught in school, I’m happy to report that at least in my district there is a course in the high school that covers this. I have no idea how many take it, but it goes over things like compound interest, investing (asset classes, etc), mortgages, and basic household financial matters. I do agree that a relatively large part of the issue is the strange taboo Americans have about talking about financial matters with their kids. I was fortunate my Dad was an accountant and loved to talk about bond rates and the stock market and mortgages and stuff like that. ---
**Author:** ![Odesio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/odesio/32/20003_2.png) [@Odesio](https://boards.straightdope.com/u/Odesio)\ **Post date:** [March 30, 2023, 1:37pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/95 "2023-03-30T13:37:54Z")
> [@Voyager](#): > > Do you default to signing up for 401Ks or must people opt into it. I think the law changed during the Obama years to make it a default, based on research by Thaler and others showing that people tend to take the default action. We automatically default to 6% particpation in the 401(k) and the employee has to jump through some hoops to change it. They’ve got to contact the company that manages their 401(k) to change their contribution instead of just logging into Workday like they do for most of thier other benefits. For new employees, my company matches 50% but only up to the first 6%. The more years you have the higher the company percantage match is maxing out at 100% after 15 years. > [@Voyager](#): > > I disagree. Choosing to do a lower paid job that you love instead of a higher paying one you hate has nothing to do with financial illiteracy. I know someone who wanted to be an art historian, but her father forced her into a business career. She made money, but she was miserable and retired as soon as she could. Yeah, finances aren’t the only consideration to make when it comes to how you live your life. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [March 30, 2023, 2:33pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/96 "2023-03-30T14:33:08Z")
> [@ASL\_v2.0](#): > > If someone doesn’t earn enough money to put towards retirement, then they can hardly benefit or get “a good deal” from a 401K with matching contributions. If it is just impossible to save anything at all, then you can’t save anything at all, I suppose. I somehow managed to do so on near minimum wages, but that _did_ take a fair amount of financial discipline. My trick was to budget for investment _before_ discretionary, but many people just save what they have left over, which is usually nothing at all. That’s one of the reasons that a 401k is useful, as it takes that money out before you have a chance to spend it. You don’t even have to do the full 5% or whatever they will match, even just a 1% contribution will help you out significantly in the long run. > [@ASL\_v2.0](#): > > There are actually people out there, some of them even relatively high-income earners saddled with debt, who do not have the _luxury_ of putting money towards retirement savings, and so do not get the benefit of matching 401K contributions, _whether or not such schemes are a good idea_. And those would be _very_ financially illiterate people. It’s one thing to not be able to save when you can barely earn enough to get by. It’s quite another to not be able to save because you have chosen to live beyond your already very generous means. > [@ASL\_v2.0](#): > > Do you see my point? The point that you were making was the employers were doing something shady by offering 401k’s. _That_ was what I was disputing. > [@ASL\_v2.0](#): > > That I also happen to think that the trend towards privatization in retirement is, like privatization of healthcare, a bad thing is secondary and I suppose beyond the scope of this thread. Retirement has _always_ been privatized. It used to be that you had to have enough kids to support you in your old age, now we have things like 401ks. Social security was never meant to mean that you don’t need to save for retirement, it’s just a basic safety net for those who didn’t. Anyone living solely on Social Security, especially if they are getting minimum payments, is having a hard time. I’m not sure how you can call it a trend _towards_ privatization in retirement. I’d say that the trend is more that we have more options to save and invest for retirement, and I’d say that’s a good thing. When would you say retirement was _less_ privatized, and what did that look like? Now, I’m all for a UBI and generous safety net, especially as AI and automation threatens to put vast swaths of the workforce out of work. But we don’t have that now, if we ever do. Until then, saving and investing for retirement is the only way to ensure that you are reasonably comfortable in your golden years. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [March 30, 2023, 3:41pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/97 "2023-03-30T15:41:39Z")
> [@Dr.Strangelove](#): > > Some people, for whatever reason, appear to have a high “discount rate”–often 100%/yr or more. That is, they’d prefer to have $100 now than $200 in a year. > > These people don’t see the problem with credit card debt at 21%, and would never go for that 15% ESPP discount (which is actually a 17.6% gain) if it meant tying up their money for a significant amount of time. They’re happy to take payday loans or use rent-to-own services with absurdly high effective interest rates. > > Unfortunately, those people will always find themselves on the short end of the financial stick. I don’t think education alone can fix this problem; they’re behaving rationally _given_ the belief that money in the future is worth that much less. The problem is somehow deeper than that. The evolutionary psychology reason given for this is related to the overall shape of uncertainty. In a primitive society, 1 bird in the hand was worth 100 in the bush tomorrow. In a modern safe society it’s more like 1 bird today, 2 next year. People’s instinctive discount rate is insanely high versus their lived reality, _if_ they live in a fairly safe stable part of a fairly safe stable economy/society. And even so, “safe” financial bets do go wrong every day for somebody somewhere. Like any human trait, this instinctive discount rate runs on a normal distribution. And as you say, in addition to the median being silly-pessimistic for most current USAians & Europeans, there are the very many outliers 1-, 2-, or even 3 standard deviations more pessimistic than that. These sorts of pessimists also tend to be the ones most preyed upon by loan sharks and other bad human actors. Their “world” of both random luck and enemy action is a far more dangerous and unstable place than where you or I live. Even if they live just one zip code away, or even next door. Which bad experiences contribute to them developing a learned cynicism that further amplifies their discount rate. Humans are good at building positive feedback loops into their psyche to their own detriment. C.f. Conspiracy Theory enthusiasts. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [March 30, 2023, 3:45pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/98 "2023-03-30T15:45:52Z")
> [@Velocity](#): > > To answer the OP, I think this really boils down to upbringing. > > If you grew up in a tough family where debt meant you always couldn’t have this or have that - picture a struggling family trying to pay off some huge medical bill, or whatnot - you could have it scared-imprinted into your mind that all debt is bad, bad, bad and you must pay it off at once whenever you can. Hence why someone with $20,000 in loans, who comes into possession of a $20,000 windfall, would feel the instant urge to erase that nagging, prickly, uncomfortable debt all at once, like someone scratching a powerful itch. You’re right this is a big slice of it. See also: > **[Rich Dad Poor Dad](https://en.wikipedia.org/wiki/Rich_Dad_Poor_Dad)** > > Rich Dad Poor Dad is a 1997 book written by Robert T. Kiyosaki and Sharon Lechter. It advocates the importance of financial literacy (financial education), financial independence and building wealth through investing in assets, real estate investing, starting and owning businesses, as well as increasing one's financial intelligence (financial IQ). > Rich Dad Poor Dad is written in the style of a set of parables presented as autobiographical. The titular "rich dad" is his best friend's father wh... which spawned an entire franchise on exactly this point. Which I alluded to up in post #2 here. Adults _can_ overcome a poor-person mentality caused by their upbringing given diligent effort. But it’s just one more obstacle to them achieving physical and mental comfort. ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 30, 2023, 3:50pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/99 "2023-03-30T15:50:33Z")
The education system, including math class, prioritizes many concepts of interest to pure mathematicians but spends very little time on basic finance. It is the obvious point to improve things. Knowing something about markets, debt and banking basics is probably more useful to more people than many topics taught. This argument was best advanced by Feynman in his letters to the California school board when they asked his opinion on how to teach basic math skills. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [March 30, 2023, 3:59pm UTC](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841/100 "2023-03-30T15:59:54Z")
> [@bump](#): > > After hanging around here two decades and some change, I’ve run across a lot of threads that remind me that people (in the general sense) have very little financial literacy. They often get into crippling debt, take sucker deals on things like mortgages, and do other financially questionable and often frankly stupid things. It is because for the longest time we had a lack of free flowing reliable information about financial planning. Saving your pennies will make you rich, was what I was taught. That is complete bullshit. People were also told not to talk about money with their friends. Why is that? I just don’t get it. The internet and social media in general is beginning to make some changes in to the way people think about wealth creation, and to be honest, it’s only going to help us all. [Previous page](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841.md?page=4) [Next page](https://boards.straightdope.com/t/basic-financial-literacy-why-is-it-so-uncommon/981841.md?page=6)