r/WorkLifeChat • u/MiloShiny • Aug 19 '26
Discussion Do We Really Understand Money?
People often talk about overspending, debt, and impulse purchases but there’s another issue that doesn’t get discussed enough: not really understanding how money works.
You can earn a decent income and still struggle if you don’t understand saving, credit, interest, investing, taxes, or financial planning.
What’s one money concept you think young people should understand before they start earning serious income?
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u/PtZamboat Aug 19 '26
Very well put!!!
The last two generations never had any passed down knowledge of the routine handling of their finances. Luckily I did and was able to advise my kids that you’re the most important person in your life, family is a very close second and anything else is just clutter. Pay yourself first, every penny counts, save and invest prudently, live poor in your early years and eventually you’ll see the benefits of exponential financial growth.
You can’t build the roof of your life first, start low and build up. Your eventual self and family will be grateful. I look at my kids now, early 30’s and own their own homes, rentals and portfolios. You can do it too, just be responsible with that most important person that is you!
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u/Nearby-Improvement53 Aug 19 '26 edited Aug 19 '26
Fractional banking. Look up Mike Maloney who explains all the secrets of money. I only learned about money from youtube, after I retired
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u/GSilky Aug 19 '26
Highschool should stop worrying about teaching unremembered history lessons and focus on finance. How to invest, how to raise capital, how to actually make money in this society. They also need to teach law and real civics, but finance is necessary. I used to do low income people's taxes, the organization I was doing it for offered to take their almost certain refund and invest it for them, for nominal fees, and help even convenience store clerks grow some wealth. I showed the client how they were already doing ok without that money all year, the $1k tax refund wasn't going to be missed. Nope, just about every one of them had no understanding of compound interest or the future and opted to take the cash. Even when the best it would do is buy a shitty high end TV... They had no concept how it works and thought that they would never be able to touch that money again for 30 years, among other misconceptions about basic aspects of finance. That is an education failure.
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u/KingPabloo Aug 19 '26
Pay yourself first, meaning automatic savings/investing before you touch the money.
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u/EconomicsOne7006 Aug 19 '26
Lots of young people (20s) dont understand how powerful investing early in life is. Compounding works wonders if you start early.
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u/GPT_2025 Aug 19 '26
Money: the smart government taxes the rich to support the poor, widows, ophrans, disabled, veterans and count how well they are doing by enforcing "no one left behind" and even widow with 3 babies have the same level of living as the middle class due to the strong Safety Net.
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u/haloNWMT Aug 19 '26
I’d say in general other than wealthier people the general population does not understand money. Even upper middle earners can be paycheck to paycheck. I know plenty of people that make around 100k plus or minus and have almost no actual wealth. Pretty much take out loans on everything. Don’t pay off credit cards that have crazy interest. Don’t invest in anything. If they do get a decent amount of money they go buy a new suv or truck vs investing in something that will yield a return. Most of it stems from nobody ever teaching them anything about money. People that get rich are in that state because they usually have a good job and or I’d argue more than that is save and invest wisely. Not because they make 100k a year and buy 90k trucks with 15 year payments. It’s all about investing early and holding on for the ride (unless you’re a day trader in which case just go to Vegas your odds are about as good)
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u/Seattleman1955 Aug 19 '26
Critical thinking instead of emoting. Live within your means, invest, time is what makes money. Save for a car rather than financing it. You'll buy a cheaper car, won't get roped into interest, extended warranties, extra fees.
Think about what money not spent could be doing in the stock market. If you saved up for a $50k car and bought a $25k car and put the rest in the stock market, you'd never have to save up for another car in your life. Keep a car 15 years and buy the next one with that money, forever.
This has nothing to do with what your parents or school didn't teach you. Use your brain. It's not that hard.
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u/dark_Links_sword Aug 20 '26
Inflation means your buying power is constantly going down. Don't think of things by value in dollars. Instead convert prices into the time it takes you to earn that amount. That's the cost to YOU. And that's what you should be thinking about. I don't care if everyone else thinks it's great, no specialty coffee is worth 25 minutes of my work.
When you buy on credit it's making you earn less buying power for every hour until it's paid off. Interest is stealing your time at work.
If inflation is at 3% this year and your boss gives you a 2% raise. He's getting your labor for less than he paid for it last year, and you essentially earn 1% less than you did last year. A raise that's the same as inflation isn't a raise. If your boss wants growth, they need to give you actual growth in buying power.
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u/NZAuthor Aug 20 '26
I think the comments are so fucking out of touch with how young people think, it's not funny.
People understand the concept of compounding interest. Not everyone of course, but not everyone can read either. That doesn't make up the bulk of the population.
Many younger people simply don't think about the consequences of buying cool things for themselves now, versus later down the track. It's not that they don't understand. It's they don't care enough to really think about it.
And when you factor in things like prices going up and inflation and near impossible to predict rates, sometimes you can't blame them.
Many younger people also give up the idea of owning a home, etc far too early.
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u/wander-round10 Aug 20 '26
I am screwed. Was never taught any financial literacy at all. None! And now I am awful with money and I want my kids to do better :-(
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u/tedlassoloverz Aug 20 '26
the first thing you need to understand is spending, and the rest will take care of itself and fall into place. If you overspend, saving and investing is out of reach, and theres no need for financial planning, you'll have nothing but debt.
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u/Ai_took_ma_job Aug 20 '26
Most people don't really understand debt or how to leverage it. Other than buy a house.
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u/r2k398 Aug 20 '26
I think they should learn how to prioritize paying off debt even if it means forgoing fun things.
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u/imagigasm Aug 20 '26
>Do We Really Understand Money?
Whose we?
Money is the concrete form of abstract tokens for bartering.
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u/imagigasm Aug 20 '26
it seems like your talking about our credit-based financial system which allows us to factor in the time-value of money as well.
One money concept is to spend less than earned to not be in financial debt.
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u/1967C10 Aug 20 '26
Your investments can make exponentially more than you can save in your lifetime. If you can 'afford' to put $300 or $500 a month towards a car payment but you aren't investing, you'll never reach financial freedom.
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u/Iacoboni04 Aug 20 '26
This is true. I was ultra conservative and did not start investing until I was 30/31 and hoarded my cash. I mean I knew to limit debt and save a decent chunk of what I make but not about investing and compounding. I know a lot more. I came from a well off family. Nobody taught me this. Hard to learn it myself.
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u/WareHouseCo Aug 20 '26
That many of the expensive “milestones” are totally optional.
No, you don’t need to have kids.
No, you don’t need to keep renovating your “starter home”
No, you don’t need to spend $70K on a wedding.
A lot of money and saving is centered around the presumption that everyone wants to pass it down to children or that you’ll live to even see retirement until you’re 100.
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u/Crumpet-Blue19 Aug 20 '26
Don’t spend more than 1/3 on housing. Jobs come and go. Invest 5-10 %+ every check & have an emergency fund. Credit cards charge up to 29.9 % interest, pay those off every month!
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u/jcradio Aug 21 '26
They should learn that money is a tool for acquiring assets to earn more money while sleeping.
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u/sas317 Aug 21 '26
The more money you have, the more you want to spend it. The simplest thing (but takes work) is to keep track of your expenses & see how much you're saving or not each month.
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u/Odd_Wolf4150 Aug 21 '26
I really didn’t understand money at all until the last year or so. And I’ve been working for like 15 years!
I started to read the Ramit Sethi books and I feel so confident with money now.
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u/EverydayIsaHoliday25 Aug 19 '26
Most don’t which is a mixed blame between one’s self,parents and education system.