Recession drags rising number of Albertans into financial ruin

[4X4]

Originally Posted by The Coppernian One

And a society that reinforces it. About a month ago in Grande Prairie I saw a billboard advertising 0% interest on an absurdly long loan for an RV. A can't remember the number of months but when I did the math it was in the 12 year range.

No concept of financial vulnerability (if I lose my earning power, what am I on the hook for - cable can be cancelled, I may not be able to avoid the car payment).

This is also amplified by an education system that does an extremely poor job of teaching finances.

I'll caveat here that I'm speaking from 20 years ago when I was in high school, but I've seen little to nothing that makes me think it's changed.

I remember learning about the stock market (just enough to be dangerous to myself) but not touching on mortgages and different types of mortgages, savings, why not to combine your car/boat/quad loan with your mortgage, etc. Nothing about an RRSP and the pros and cons of it.

There are so many good habits that people can do that most just don't and I think budgeting is an abstract concept for many because it never had be learned and now having stuff is "normal". Akin to your car example - "sure I can afford the adoption fee for this dog, so I'm good." No thought about the food, vet bills, toys, grooming, leashes, kenneling/care costs when vacationing, etc.

What? You didn't learn all you need to know about finances from that ultra informative, 3 credit course C.A.L.M? Well, at least you know trigonometry and the three different types of rock. I'm sure igneous rock guided you away from being a moron with money as soon as Visa sent you a credit card at 18.

[taco.vidal]

[Slava]

Originally Posted by 4X4

What? You didn't learn all you need to know about finances from that ultra informative, 3 credit course C.A.L.M? Well, at least you know trigonometry and the three different types of rock. I'm sure igneous rock guided you away from being a moron with money as soon as Visa sent you a credit card at 18.

Yeah well that's just it. You do learn about those things to some degree in CALM (although I think it needs to be covered in greater depth and more fully). The problem is that it's a small course and lots of people skip it or sleep through it because they don't think it's important. I know we did everything from writing resumes and cover letters through mortgages, RRSPs and all kinds of other important topics. Whether people took anything away and applied it is another matter though.

[The Coppernian One]

Originally Posted by 4X4

What? You didn't learn all you need to know about finances from that ultra informative, 3 credit course C.A.L.M? Well, at least you know trigonometry and the three different types of rock. I'm sure igneous rock guided you away from being a moron with money as soon as Visa sent you a credit card at 18.

I was dumb and got a credit card for each of the three types of rock! Just in case of emergencies, which as I learned in C.A.L.M. from carrying an egg around for a week pretending it was a baby, could happen at any moment.

At least C.A.L.M did teach us some useful information like which girls were adept at putting a condom on a banana and which weren't.

[The Coppernian One]

Originally Posted by Slava

Yeah well that's just it. You do learn about those things to some degree in CALM (although I think it needs to be covered in greater depth and more fully). The problem is that it's a small course and lots of people skip it or sleep through it because they don't think it's important. I know we did everything from writing resumes and cover letters through mortgages, RRSPs and all kinds of other important topics. Whether people took anything away and applied it is another matter though.

We did Resumes and Cover Letters. There was one very small exercise on budgeting that didn't do a whole lot, but at least it scratched the surface. Nothing coming even close to mortgages, loans, RRSPs, etc.

I would agree that the few important things it covered are mostly ignored by those in the class.

[Slava]

Originally Posted by The Coppernian One

We did Resumes and Cover Letters. There was one very small exercise on budgeting that didn't do a whole lot, but at least it scratched the surface. Nothing coming even close to mortgages, loans, RRSPs, etc.

I would agree that the few important things it covered are mostly ignored by those in the class.

I know we did mortgages because the house I selected to buy was going to take me more than a decade to save the down payment. It was a bit of an eye opener for me.

But really, these topics are there and taught. Most people ignore them and complain later, but what else can the schools do? You can lead a horse to water...

[GGG]

You could start financial literacy earlier in grade four or five and teach compound interest and saving and have a chunk of every year devoted to it. Not just one 3 credit course. If you had a 1/2 he per week on it as part of math / social studies/ etc you could get people literate by the time they graduate.

[V]

My kids all have four accounts, saving, investments, charity and spending, and they have to put a set percentage of all money they make into each account. I'd say it actually means something to my 12 year old, while the others don't get it yet. It probably starts making sense to teach this stuff to kids once they're in grade 7, but not earlier. I also think parents need to do a lot of this, I think it's pretty clear that CALM doesn't have much impact how it stands now.

[Weitz]

You force charity giving on your kids? That seems silly.

[V]

Sure do.

[Weitz]

Interesting. No worries that they would resent it later in life and not give to what they feel they might like to support? Just curious have seen it both ways.

[V]

They're kids. We're building habits. And they pick the charity. We don't just pick their pocket and say you're sending it here. They choose the charity and they send the money. We think the world could use a little more charity and we should probably start at home.

This is getting pretty off topic, though, my intent was to highlight when and who should be teaching kids finances.

[Dion]

Originally Posted by V

Sure do.

I like that idea.

[Kavvy]

Originally Posted by Weitz

You force charity giving on your kids? That seems silly.

Your post seemed silly to me.

[GGG]

Originally Posted by V

They're kids. We're building habits. And they pick the charity. We don't just pick their pocket and say you're sending it here. They choose the charity and they send the money. We think the world could use a little more charity and we should probably start at home.

This is getting pretty off topic, though, my intent was to highlight when and who should be teaching kids finances.

I don't disagree but schools are better at teaching sex Ed, driving, math, English and probably everything outside of reading then average parents.

And like all of the above subjects school should provide a baseline of factual information so that you can break mis-information cycles. If kids learn from the signs at the pay day loan place they are going to make the same poor choices.

[Amethyst]

If the parents are teaching finances in a reasonable manner, sure they can teach the kids. But what about all those people who are terrible with money? They just perpetuate the problem.

I love the charity idea, where the kids pick the charity. Gives them some direction and also some control. I think it is more likely to build the habit of giving to charity than it is to cause resentment.

[Mr.Coffee]

Originally Posted by Slava

Yeah well that's just it. You do learn about those things to some degree in CALM (although I think it needs to be covered in greater depth and more fully). The problem is that it's a small course and lots of people skip it or sleep through it because they don't think it's important. I know we did everything from writing resumes and cover letters through mortgages, RRSPs and all kinds of other important topics. Whether people took anything away and applied it is another matter though.

hang on now, not to perpetuate the off-topicness but this is not true, at least not for me (and I went to a fairly large high school, so also not true for a few hundred others minimum).

CALM did budgeting, but did not at all get into savings, compound interest, RRSP's, tax returns or the myriad of other simple finance related topics that literally EVERYONE should know.

I recall taking a university level personal finance course and it was the first time being introduced to RRSP's and how to even fill out a basic tax return. And I distinctly remember thinking how absurd it was that this was the first time I'd seen it given that a) it's a legal requirement to submit a tax return and b) I had never been taught it before in school until post-secondary.

So no, maybe you had a great CALM teacher or maybe mine just sucked hard but that wasn't my experience and even if they did go over it, it would not have done what's needed to be done justice to go over the material properly. 4x4 is absolutely right, it's much more important for individuals AND society that people understand these basics rather than get into introductory calculus or a variety of topics taught in high school. It's mindboggling this hasn't been a fix to the curriculum yet?

A few years ago my finances were not super hot, and I started budgeting, just on my own. Not a horrible situation, just pretty leveraged and I knew it. Budgeting made all the world of a difference and changed things very dramatically for my family and I. Basically it empowered us to say no when we knew we couldn't afford things.

[V]

I remember going over compound interest. We had a table that showed how much our money was worth if we paid in every year, and after 30 years we had a million dollars. I thought "cool" and never thought of it again. We talked about "investments" but I don't know if it went into RRSPs. Mortgages didn't come up, because I remember we had to look through the paper to find a place to rent, and we definitely did budgeting as a part of the exercise. Absolutely none of it was retained, though. Not a lick.

[flamesfever]

I think, to some degree, we are all victimized by the relentless advertising on tv, radio, e-mail, newspapers, magazines, Facebook, etc. Is it any wonder that we become programmed to spend...spend...spend? Besides lack of education, I think this is one of the driving forces in keeping people poor. It never ceases to amaze me in seeing the endless flow of people into stores like Walmart. I say to myself, "Where does all the money come from?..these people don't look that affluent."

Just look at our government's efforts to stimulate the economy by spending money that they don't have, and printing money with nothing to back it up. Are we not a mirror of our government, or the other way around? And how are our children or grandchildren going to pay it back?

I went to a seminar a month ago, and it was expressed that, in view of our present situation of low interest rates and a faltering world economy, the only way out was to continue to print money and put it in the hands of those who spend it. In this regard it was expressed that the minimum wage should be raised as soon as possible. Does this not jive with recent moves by governments?

There's no doubt in my mind that we are locked into and age of rampant consumerism coupled with materialism. And who knows where it will take us.

[Mr.Coffee]

Originally Posted by flamesfever

I think, to some degree, we are all victimized by the relentless advertising on tv, radio, e-mail, newspapers, magazines, Facebook, etc. Is it any wonder that we become programmed to spend...spend...spend? Besides lack of education, I think this is one of the driving forces in keeping people poor. It never ceases to amaze me in seeing the endless flow of people into stores like Walmart. I say to myself, "Where does all the money come from?..these people don't look that affluent."

Just look at our government's efforts to stimulate the economy by spending money that they don't have, and printing money with nothing to back it up. Are we not a mirror of our government, or the other way around? And how are our children or grandchildren going to pay it back?

I went to a seminar a month ago, and it was expressed that, in view of our present situation of low interest rates and a faltering world economy, the only way out was to continue to print money and put it in the hands of those who spend it. In this regard it was expressed that the minimum wage should be raised as soon as possible. Does this not jive with recent moves by governments?

There's no doubt in my mind that we are locked into and age of rampant consumerism coupled with materialism. And who knows where it will take us.

World war 2 was a pretty good reboot to the world economy.