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I RECENTLY LISTENED to a podcast featuring Richard Thaler, the Nobel prize-winning economist. To say I’m a huge fan of his work is an understatement. Thaler has that rare ability to communicate a complex topic—behavioral economics—to a lay audience in a way that’s both accessible and enjoyable. His book Misbehaving offers a fascinating historical account of behavioral economics, a field he played a major role in developing.
But it was a casual comment that Thaler made toward the end of the interview that really caught my attention. Podcast host Meb Faber asked him for some best practices for teaching personal finance to high school students. Thaler suggested replacing subjects like trigonometry—with near zero practical value—with more useful ones, such as teaching students how to use a spreadsheet.
Use a spreadsheet. It suddenly dawned on me just how heavily I’ve relied on spreadsheets throughout my life, particularly when it comes to personal finance. So many financial questions are ripe for analysis through the use of spreadsheets. The following is a list of nine problems for which I’ve depended on them. Some of the resulting spreadsheets were relatively simple, while others devilishly complex.
Looking for help creating a spreadsheet? Microsoft offers a slew of Excel templates that are available for download.
Many of my HumbleDollar articles—and the financial analyses that underlay them—would never have seen the light of day if it weren’t for spreadsheets. Of the 24 articles and blog posts that I’ve written so far, a full quarter of them relied on spreadsheets in some manner. In particular, this article, this one and this one were essentially spreadsheets disguised as prose. These articles also happen to be among my favorites.
How often have I used trigonometry in my finances? Meet the null set.
Many things that are taught are not directly useful “as is” but they’re more about “learning to learn” and using rational method.
It’s like complaining that students in IT don’t learn whatever programming language or technology is the latest trend. The point is to learn enough so that when they need to use a new language, they’ll be able to learn that one by themselves.
About teaching to use spreadsheets, I don’t think it would change much. You presume people would use them if they’d been taught but I think there is no correlation here.
I’m not sure if I started using spreadsheets before or after learning trigonometry, but I certainly hadn’t had any “spreadsheet lessons”, and school had already taught me enough that I could discover spreadsheets by myself.
I think getting to basics somehow is most important, like save before spending, be careful about creeping lifestyle, avoid debt to the max possible, live within your means, be disciplined, how to assess the stuff you really need, understanding the power of compounding.
It’s not the absence of a spreadsheet that gets people in trouble, it’s making poor life choices.
There is a lot of debate in the education world about working in personal finance. The problem, of course, is that available time in a student’s schedule is scarce and there are so many subjects demanding to be worked in (health, self-defense, media literacy, statistics, rhetoric, civics, volunteerism, etc.). Plus, hitting topics like personal finance (and spreadsheets) has little efficacy if done once in a curriculum. Everyone has something they want to put in, but are stumped when asked what to take out. As an educator, I would like to see Algebra II/Trig removed from high school. As you said, most careers don’t require it and those that do can work it into the college requirements for a degree. My sons (an engineer and an actuary) said they would like to have had more basic education in statistics and data analysis in high school, which could include spreadsheets. BTW, I am also a huge fam of Thaler (I am an author in behavioral economics education), but owing to my “bent,” I think behavioral econ cannot be taught without also teaching about the influences on our behavior, the “nudges” to borrow from Thaler, and thus media literacy.