FREE NEWSLETTER
CAN WE REALLY EXPECT Americans to be financially literate and act prudently with their money—when they can’t even return a shopping cart to where it belongs, or stop dropping litter wherever they stand?
I was in the grocery store recently and came out to find a shopping cart pushed into the side of my car. I was parked eight feet from the cart corral. Meanwhile, on my last trip to an ATM, the ground was littered with receipts. It looked like a blizzard, which isn’t what you expect in Florida. I couldn’t resist picking them up and looking at them. “Transaction denied” and “insufficient funds,” they read. I guess folks were annoyed at those messages and unaware they had no money in the bank. Surprise?
Then there’s the pseudo-planner. Think of the driver who, upon seeing the sign saying “left lane closed ahead merge right,” waits until the last possible point, thereby causing an even greater traffic jam. Folks show the same skill at anticipating their financial needs. “I’m 59 and I’ve saved $100,000. Can I retire at 60?”
Speaking of drivers, think about the guy who cuts you off while passing on the right. Do you think he plans ahead for retirement and other expenses? How about the drivers who switch from lane to lane in traffic? Do they do the same with their investments?
The fashion aisle at a pet supermarket in Deerfield, Florida
We need to take a holistic approach to our finances, viewing the various parts as interconnected. For instance, if a family lives paycheck to paycheck, should they be shopping in the fashion aisle of the pet store? Or, for that matter, acquiring a new pet, no matter how cute?
Are irresponsible actions at the grocery store or on the road indicative of poor financial decisions? Can folks be fully responsible in one area of their life, but not others? It seems not. An irresponsible person is generally always irresponsible, including when it comes to money.
I read a blog about a couple in their 30s who were spending thousand of dollars more each year than their $40,000 income. But at the same time, they were contributing $300 a month to their church. Generous perhaps, but are they acting responsibly? I guess it’s a matter of opinion, but I vote “no.” We all have a financial starting point and an end point spanning 80 years or so. A holistic approach to financial decision-making considers all those years, all the time.
Thank you Sir Richard, another insightful post!
I was about 8 years into my second career and was sent out to the public and a random fellow asked about my job and how long I had been with the company. I told him and his eyes got wide with a surprised look and he said “Time for a change isn’t it?”
Some people don’t look at life the same way most folks here do, and that’s a shame.
I’ve written here with comments in the past,
“Well finished is well started.”
Find a job that has good retirement benefits and stick with it for an easy way to secure the after work life. I was with that company for 16 years 10 months until 6 months before my 70th and then I started S.S. with 52 years of earnings reported.
I had 30 years with another company before the last one, and receiving a pension from them since 2001 while still working the second position.
I now have 2 pensions and my max Social Sec along with a Roth and Traditional IRA for personal income.
But, I didn’t get here by jumping jobs every few years.
Hopefully my 2 sons have listened over the years!
Well said Richard. The dynamics of our society has certainly changed. In my opinion it’s a lack of respect. A lack of respect for money, our environment and each other……..all fueled by low esteem and lack of integrity. Feeling we are entitled rather than responsible strips us of our integrity.
The litter of “transaction denied” and “NSF” slips triggered this sad thought: Many people are apply “magic thinking” to the basic arithmetic functions of addition and subtraction.
The rude/thoughtless shopping cart behavior triggered more sad thoughts, about cultural decline, and how its rate varies by geography. Another factor to add to retirement location decisions.
Today I went to a well known store and grabbed a shopping cart on the way in. A couple were leaving through the ‘In’ door as I approached and gave me a ‘What are you doing?’ look as they tried to exit through the door at the same time I was entering.
That’s bad…..parents who never taught their kids.
Thanks for the morning fix of curmudgeonry. I laughed out loud at a few. I live in Hawaii and a popular bumper sticker reads, “Drive with Aloha.” It is not unusual for drivers to let others merge or make a turn or pull out of a driveway, but certainly not all. And there are no Aldi stores here but the U. S. Mint did just release a quarter honoring Edith Kanakaʻole.
In interstate traffic I’ve often thought about the analogy to investing/trading. When younger I used to change lanes more often and performance chased with mutual funds. Now that I’m older and wiser I stick more to my lane and invest in broad market ETFs.
It’s pretty common here in eastern Iowa for folks to leave the quarter in the Aldi’s cart. Just a simple way of paying-it-forward. – and there’s never stray carts left in the lot, but right next to Aldi’s is Walmart, with carts everywhere!?!
To Richard’s point, credit scores are used to underwrite risk/rate setting for automobile insurance. It’s been proven statistically that higher credit scores are a better risk. A higher score correlates with better driving behavior. Many folks don’t like this, but it’s true nonetheless. I agree that it doesn’t seem fair. I’m also glad that I have a high credit score. Of course, the high score didn’t occur by accident.
I think we can all agree that not returning shopping carts and littering are irresponsible. Zipper merging, passing a slower car on the right, and tithing are definitely NOT good examples. Not everything you disagree with is irresponsible, and financial literacy does not equate with infallibility.
Risky, dangerous, inconsiderate and illegal actions on the road or elsewhere are not irresponsible? Is that what you are saying?
Zipper merging is definitely the most efficient. Read this thread on Reddit if you haven’t had a chance to do so yet. (I posted it as a response to another comment below.)
Do you feel that way after merging as a sign instructs and then when you get to the single lane the cars that ignored instructions and rather zipped along in the to be closed lane cut in front of you? It’s so annoying i have seen truckers pull their rigs over to block moving up in the closing lane. Begs the question why put up the signs instructing the merge.
I find it curious that as a society we’ve mostly decided to bend a knee to the most unruly and inconsiderate among us. The zipper merge is bad because a handful of Americans can’t stand to give up their “spot” in line and so the rest of us have no choice but to spend a lot of unnecessary hours in traffic every year. I’m going to say that as a nation we’ve struck a bad bargain —and this comment extends well beyond a simple traffic merge.
I definitely think people should do whatever the traffic sign instructs.
I do not like the vigilante trucks (or other vehicles) who straddle the line to try to keep people in a different lane from getting ahead.
What is risky, dangerous, inconsiderate or illegal about tithing or zipper merging? Just because you personally don’t like them doesn’t make them so, and it doesn’t make those people financially irresponsible.
I was surprised, when I moved to the US, to discover that “zipper merging” (one from the left lane, one from the right lane, right?) seemed to be unknown. I was more surprised by all the people idling in the middle and fast lanes, therefore requiring others to overtake in the slow lane. That’s illegal in a lot of countries. Actually, I believe it is illegal in my state, but that law is never enforced here.
Think of the driver who, upon seeing the sign saying “left lane closed ahead merge right,” waits until the last possible point, thereby causing an even greater traffic jam.
Think of the zipper merge as the most efficient means of reducing two lanes of traffic into on. We utilize all the asphalt by filling it up with cars and blending the lines together at one fixed point at the very end instead of chaotically and haphazardly. It works poorly in most parts of the U.S. because people can’t fathom that there are two lines and get bent out of shape when one line moves faster than the other.
When reading that portion, I remembered a recent thread I had seen on Reddit. The zipper merge is certainly more efficient, but at the same time there are a large amount of people who have the mistaken opinion that waiting until the end is somehow unfair or inefficient.
I am not sure it is correct to conflate financial literacy and behavior with other societal conduct. From the Tax Code to concepts of asset allocation, finances and financial concepts are not simple. The average IQ of people living in the US is around 100 with 16 % or over 50 million people with an IQ of 85 or below. To be sure, politeness, while not totally dead has certainly been diminished within our society. People have found that cooperation as a strategy for success isn’t as helpful as looking out for one’s own self-interest as every capitalist should.
Responsible behavior is not tied to any particular action and I don’t think IQ has much if anything to do with it. The basics of financial decision are pretty simple, and certainly can be explained that way. it’s personality and behavior that gets in the way.
Think of all the people back in 2009 who got out of the market at the low point, locked in their losses and then claimed they lost their retirement savings. IMO A pure emotional reaction with long term consequences.
While ill-advised, I wouldn’t call panic-selling irresponsible behavior. I know several responsible people who panicked and sold when the market crashed in 2009.
You raise some good examples of habitually irresponsible people. I see it happening all the time and there is no letting up. Litter is everywhere, not just at ATM’s, but on highways, intersections and neighborhoods. When I go for a walk I take two plastic grocery bags (plus Nitrile gloves to wear) and usually come home with the bags full.
When I moved to NYC in 1986, trash and dog poop were everywhere, and the city was covered with graffiti. That’s not the case today. Yes, there are plenty of irresponsible people. But I’m not sure they’re more numerous today than they were in earlier decades.
First time visiting I was shocked by the amount of graffiti in Europe, especially Italy.
Think of all the millions, perhaps billions used each year in this country, just picking up litter or the fact we need signs and fines to tell us not to do it.
Ten percent of income is the norm in a number of churches (e.g., LDS). While you can fault them for spending in excess of their income, I don’t think it is appropriate to suggest that adhering to the norms of their church is irresponsible.
Actually most people give between 3-5%, but it’s my opinion only and I recognize it is highly personal, but I still think that is not prudent.
There was a recent article in the WSJ about couples living in retirement. One couple lives in a old 14 room house, have a modest income, but can’t afford to heat the house so they live in three rooms with a space heater, but they give $400 a month to their church, more than they spend on food.
Legally required tithing (10% of income or property) to support a national church has a very long history – according to wikipedia it goes back to 855 in England, and appears to have only fully been abolished in the last century. The dissenters who left for the “new world” appear to have brought the concept with them. Paying it voluntarily may be a point of pride, but is surely counter-productive if it blows the budget.
I (and so many others) have decried the lack of financial education in our public schools. I thought that such an education would improve the future for everyone. Sadly, to your point, millions of irresponsible folks will never take advantage of all the knowledge in the world.
In Virginia, a financial education class is required for graduation. Unfortunately, its a waste of time and effort. While all the basics are taught, there is no matching of knowledge to real world applicability. While all my children graduated with this class, I still had to explain what a checking account was and how to use it, how our tax system worked and why their paychecks were smaller than anticipated, basic budgeting, and so much more.
The current results are like a student signing up for a woodworking shop and never touching a piece of wood or stepping foot into a woodshop….yet they learned about the multitude of different types of trees. Knowledge without applicability or context…and the box is checked.
Public schools should teach how to balance a checkbook (or use the format of online accounts) and combine it with math class. However, there are fundamental problems implementing this. One is that we cannot trust commercial interests that may interfere. Another is today’s political climate; people at both ends of the political spectrum will cry foul. Another problem would be finding qualified teachers.
Unfortunately reading comprehension today in the U.S. is poor , and reading has been poorly taught in the U.S. in the past 35 years. A majority of young people read very little , whether they go to public or private school. The back of a checking account statement provides very simple instruction on how to balance a checkbook but people won’t read it. If people could read and were motivated to learn by reading, there would be no need to have classes to teach you how to balance a checkbook.
And if so, it shouldn’t be in a math class, unless you are talking about the second grade. Older students should be mastering algebra , geometry and calculus , not basic arithmetic.
If you can’t read well you won’t do anything well.
That’s the sad state of the US educational system in a nutshell. We are now ranked 29th in the world last time I checked. When most us here were in school the US was first, but my schools did not have air conditioning, we had to participate in “gym”, and there were the paddles. Most graduated as responsible people who could count change and do their own tax returns.
Good point. I recently found out one granddaughter didn’t know how to peel a potato. Brought back memories of peeling fifty pounds with a paring knife in the army.
Thanks for the memory jog. In 1972 I was a holdover coming out of basis training at Fort Knox while waiting for a security clearance background check to be completed. During that time I mostly worked in the mess hall for the breakfast meal. It took me decades to learn to eat scrambled eggs without first dumping maple syrup on them.
My training company had an industrial potato which could peel potatoes 20#’s at a time. Still had to carve the eyes out after the mechanical peel. Some training is taught and hopefully learned that has no relevance to the real life needs of the individual whether that be peeling a potato or balancing a checkbook.
You definitely weren’t shopping at an Aldi.
(For those that don’t get the reference: At Aldi, customers are required to put a quarter in to unlock the cart and only upon returning the cart is the quarter released back. This means that there are never stray carts at an Aldi.)
I am a big fan of Aldi and go there at least once a week. (Organic blueberries for breakfast are the cheapest in town). What’s funny is that at least twice customers who were done shopping offered me their carts. I don’t always use them as I don’t buy a lot of stuff, bring in my own bag, and I don’t always carry change. Perhaps they were being generous, but I wonder if they didn’t know how to reconnect the cart and retrieve quarters. Anyway being a cheap guy, I was happy to do so!
My wife and I had a similar experience on our last visit. When we went to return our cart, there were two (!) that still had the quarters in them and had not been “relocked”. (Although, they had been pushed into the proper position.) I’m not sure why other than the Aldi was undergoing a remodel and maybe it was an employee or something that put them there. In any event, I was happy to “relock” them and receive two extra quarters.
Ronald, I’ve had the same experience at Aldi. I think this is these friendly people’s way of “paying it forward” and offering some inexpensive kindness. I’ve even started doing it myself lately, although many times the person I hand the cart off to insists on putting their quarter in my hand. Maybe that’s what those offering their cart to you were expecting?
Maybe, but I rarely carry change on my person. Usually some in the car. Perhaps they just didn’t want to walk it back to the corral. I recall being initially confused about the mechanics of it when I first started going there. Probably the reason. But I wouldn’t give up a quarter. I still pick up pennies!! Change Is Coming – HumbleDollar
My loose change is collected in a large jar and then I take it to my credit union where there is a change counting machine. There is no charge if you deposit the result in your account. I do that because it is more than what they pay in interest.
Ronald, I rarely have change with me either. The exception is the “Aldi quarter” that is in the family van change holder. Everyone in the house knows to never remove it because it is exclusively for when you go to Aldi to get a shopping cart.