I think financial illiteracy is a huge issue in this country. I won't go so far as to call it a "problem" since our system does require an economic underclass and I'm an unapologetically heartless bastard who has absolutely no problem with that, but in terms of minding to my own brood, financial illiteracy is something I'd rather not see amongst them.

I have a couple employees, I'll call them Dave and Beth.
Dave and Beth are a married couple in their mid 50's who have a care taking position on property. They live in a small house owned by the business, rent free, and get a modest salary that takes into consideration their lodging. Between them, they make a decent living for two people without high school degrees. They're also wonderful salt-of-the-earth type folks.

The thing is, if I were to gauge financial literacy on a scale of 1-10 with 1 being the bottom, they would be a 1. They make more "disposable income" type purchases than I do.. They have no checking account, get their entire paychecks in cash, spend every dime they get on garbage and trinkets, eating out almost every day, new car payments that are insanely disproportionate to their income, etc.

Whenever 'life strikes' and they need cash, I wind up having to advance them. Not that I'm worried about getting paid back- they're always good for it- it's just that it bothers me seeing two otherwise good people living so stupidly.

Realizing that the most fruitless cause is trying to save someone from themselves, does anyone have any suggestions for things I might say that would resonate with people like this and help get them on the right financial track? I'm not a particularly patient communicator when it comes to people on the upslope of the IQ curve. Seeing two very good people with virtually no expenses burn through $30,000 a year on nonsense and not having a thing to show for it is frustrating.

I say this in all seriousness. Give each one a copy of this book. It costs about 6 bucks and is by far the greatest money management book ever written.

SMP.

If they are otherwise happy with their daily lives why intervene at all? If you really want to help stop enabling their behavior notify them you are no longer able to advance them money and explain why. Weighing their reaction to any intervention you may see fit to take should be considered carefully, most poor people are very proud and it sounds like you don't want to generate any hurtful feelings.

Jimbo

I think all schools should make this book mandatory reading.



It pains me too. I also have an employee that does the finest / honest job of being janitor of my rental hall yet every single time I give him a paycheck he manages to burn through it the weekend later.

I talk to him about it but he doesn't really care.


Some people either understand frugality and want to understand it, or they don't. And it's nearly impossible to convince the people that don't.

"Rich Dad Poor Dad" is also another great simple book for completely financially illiterate people.


I know there is some flack for the author but the actual book has sound principles that has inspired millions to escape from the constant rat race of pay check to paycheck.

www.partypoker.com imo

You're being an enabler by "bailing them out" regardless if they are good for the money in return. What will be your reaction when suddenly they aren't good for it as expected?



Try to casually bring up retirement funding and savings accounts, see what direction it takes.

I disagree. I bought this book after it was recommended here. The writing is atrocious, and information content is low. The book's content could be summarised in one page, but it's padded with cheesy stories. It's a waste of money IMO.

Make a personal finance course a requirement for a high school degree or GED. That would do wonders.

We can cross-post to politics to talk about why it won't happen, though.

Nothing to add, but read this article on the topic today:

http://www.economist.com/displaystor...ry_id=10958702

Great article.

I read a story a little while back about a guy that worked as a machine hand for 40 years before retiring. At retirement he was making about $35k a year.

Soon after retiring, he gave his life savings to a local university, $1.5m in all. Ill let you guys do the math.

Yeah, kinda like Oseola McCarty. Her story always stuck with me.

Good luck with educating people who don't want to be educated. I feel your pain. I'm related to people like that. I've tried. It doesn't work.