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funancial
May 25, 2014 | by  | in Features Homepage |
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More like FUNancial literacy

Esteemed reader,

Welcome to this non-interactive interaction aiming to equip you with some basic snippets of financial literacy. No! Walk back over here! It is important that you learn. I will try to make it entertaining. There will be a quiz at the end because I am self-indulgent to see if you have retained anything. As far as financial-literacy pieces go, this one will be bitingly honest. “I just found a pimple in one of my eyebrows” honest. But also financially honest. I will mention the time I spent a day’s worth of my Wholly Bagels wages on a first-year Classics textbook at Arty Bees despite (a) being in seventh form, (b) not studying classics, and (c) the internet existing. I ask you.

Personal finance is a sensitive issue because people have differing amounts of money and differing amounts of knowledge about money. One doesn’t cause the other: whenever you read anything that says “people without money are just bad budgeters”, you should sound the liberal alarm (a seal noise, in memory of all the seals that Bob Jones has personally clubbed). It’s difficult to know where to pitch lessons about this stuff, too, because you don’t want to assume people know more or less than they do.

I could try to get academic about this, and (in keeping with what I think being an academic would involve) go back to theories about money so no one can challenge me on the impracticality of my suggestion. The central concept in finance (which I learned from a Finance paper, so you are getting the knowledge for a fucking song) is that money has a time value. A dollar now can be worth more or less to you than a dollar in the future. To figure out whether it’s worth buying or selling something today, you add up the total income you will receive from it in the future. The textbooks use disgusting anatomical phrases like “income stream” and “cash flow”, which makes you think the Mooncup is the only real logical corollary of corporate-finance theory. Anyway, when you’re adding up this income, you have to account for the interest you will earn if you buy it today, or will miss out on if you sell it today. Are you satisfied? I tell you, if Blinglish put it this simply, it’d be mansplaining.

The central concept of economics gets us closer: trade-offs. Trade-offs are why you get mad at your friend for never coming to social events that require them to pay for food, and then—TWIST—that friend goes on a bitchin’ holiday and you are left on Ghuznee St bitchin’ over $15 muesli. (This example is way less fun when it’s more realistic.)

I have exhausted all of my patience for properly explaining things, which means that all that is left is the humble emotional appeal. Here it goes. Do you ever get anxious and stressed and avoid thinking about things because you don’t know that much about them and you’ll never be an expert so why bother? And it’s like, “I haven’t done washing in three weeks and you’re asking me about whether I would notice if I added more to my KiwiSaver every week?” or, “I will make a budget as soon as I have completed this Facebook friend cull/run this bath/made this pasta bake.” This is pretty common. I think this is why a lot of us feel like we’re so bad with money. It’s a self-castigating line of reasoning, that whole “I am too far behind to ever catch up so why bother” thing. It’s stopped me from joining DebSoc and dating casually. I guess we’ll never know what I could have been like.

I know it SOUNDS LIKE these are surface-level jokes with no solution or even relevance to financial literacy but—TWIST—I have identified something that I think you should take from this. You can get most financial advice from better places than me. But I am just as good a person as any to tell you to STOP BUYING FOOD AT UNI YOU KNOW THAT IS WHY YOU NEVER HAVE ANY MONEY DO YOU KNOW HOW MUCH YOU WOULD SAVE IF YOU JUST MADE STUFF AT HOME AND TOOK IT TO UNI I KNOW KRISHNA IS CHEAP I KNOW HUNTER LOUNGE IS RELATIVELY CHEAP BUT YOU KNOW WHAT IS CHEAPER BRINGING FUCKING LENTIL SOUP THAT’S WHAT LOOK I’M NOT YELLING I’M JUST PASSIONATE.

Being told that you are bad at stuff or need to try harder at stuff is difficult. That is why I am trying to couch this message in rainbows. Financial literacy is important, and it is not actually that funny that a lot of people have a poor understanding of their money. Start trying to learn about it now; you’ll get better faster than if you started later. Remember, we are all just trying to get to the next warp room in the game of life. Now, I promised you a quiz, and I am a woman of my (tangential, convoluted, overly embellished) word.

ONE: How do you stop your aunts and uncles fighting? A: Invent a time machine and stop your grandfather giving unsecured Bridgecorp securities an $120,000 hoon.

TWO: This one is set out like an NCEA Level 1 Biology Merit question. You’re in the club and someone starts grinding on you being all, “Mmm, you’re so intelligent, the Bechdel test is so rarely satisfied, can I borrow $8 and pay you back $10 later?” Identify the two different kinds of interest at play here and explain which is more likely to end in tears.

THREE: Did you hear about the paternalist peak-hour conductor who kept nudging people off the train?

FOUR: Who can you trust? A: No one. (TWIST (not actually a twist; I think you knew that already)). Markets assume you’re rational, and they take no responsibility for the consequences of your actions if they turn out badly for you. Governments have to take responsibility. There are lots of arguments over whether they are doing this well or even at all.

FIVE: Okay, this isn’t a question, but if you have a solid-enough understanding of defamation law to help me out should Bob Jones deny having clubbed any seals, please email editor@salient.org.nz, subject line “BOB LOBLAW LOBS LAW BOMB”.

 

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