Category Archives: Financial Literacy

Annotated bibliographies for financial literacy course

Here are the annotated bibliographies I prepared from 2016-01-14 to 2016-02-22 for my incomplete online course, Introduction to American Personal Financial Literacy. This course will not be completed.


All Annotated Bibliographies by Richard Thripp [6 Credit Hours]

EDP 6936 Section 0M01: Spring 2016 – UCF, Dr. Michele Gill

Completed February 22, 2016



Mandell, L., & Klein, L. S. (2007). Motivation and financial literacy. Financial Services Review, 16(2), 105–116.


b) Abstract:

This paper examines the hypothesis that low financial literacy scores among young adults, even after they have taken a course in personal finance, is related to a lack of motivation to learn or retain these skills. The research is based upon the latest national Jump$tart survey of high school seniors and uses financial literacy scores after controlling for socioeconomic, demographic, and aspirational characteristics that have historically predicted these scores. We analyze the relation of financial literacy scores to responses to three questions designed to measure motivation to be financially literate. We found that the motivational variables significantly increased our ability to explain differences in financial literacy.


c) Relation to Capstone Project # 1, Financial Literacy Course:

This paper reviews and interprets the results of financial literacy surveys developed by the Jump$tart Coalition for Personal Financial Literacy and administered to high school seniors 1997–2006. Lucey (2005) has established, with reservations, that these surveys have reliability and validity that is adequate for many purposes. However, the Jump$tart surveys remain among the best self-report instruments we have to measure personal financial literacy, which is unfortunate because there is much room for improvement.

Importantly, Mandell and Klein (2007) conclude that motivation is a key factor in explaining levels of financial literacy. The authors reflect on the fact that high school classes do not measurably improve financial literacy (pp. 113–114), relating this to results from the Jump$tart surveys indicating that students who talk about finances with their parents, have stocks in their name, or possess credit cards are not more financially literate than their peers (pp. 108–109). The authors lament that high school students might be more motivated if they fully understood the many social safety nets that have been removed from American life (pp. 109), such as the consumer protections that were dissolved under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Moreover, the authors cite research indicating that “targeted financial education” is efficacious, such as pre-purchase or credit counseling given to people before borrowing for a mortgage, student loan, auto loan, etc. (pp. 112–113). The implication here is that these consumers are motivated to apply what they have learned, rather than seeing it as something nebulous that does not apply to them. This is very important for my course; capturing students’ interest and conveying personal relevance will be essential to my course design, which will incorporate motivational theories from the ALIMA program.


d) Key Insights:

See above for key insights (combined with Relation to Capstone Project # 1 section).


e) Further Reading:

Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89, 309–322.



Lucey, T. A., & Maxwell, S. A. (2011). Teaching mathematical connections to financial literacy in grades K–8: Clarifying the issues. Investigations in Mathematics Learning, 3(3), 46–65.


b) Abstract:

Most teacher education programs do not incorporate financial education preparations into courses required for early childhood, elementary education, and middle level candidates. The authors of this manuscript explore the reasons for this omission, particularly the mathematics education component, and clarify the issues surrounding this decision. They argue that financial education represents a valid curriculum concern and that inadequate personal finance literacy and mathematics standards exist. In addition, they discuss that elementary and middle schoolteachers generally lack understandings of the content, that teacher preparations inadequately educate teachers to teach about this content, and that a pedagogical shift is needed to affect meaningful change. They call for revisions of traditional mathematics pedagogies to address this challenge so that K–8 students may begin to exercise the responsibility for prudent financial decision-making that they will need in future years.


c) Relation to Capstone Project # 1, Financial Literacy Course:

Lucey and Maxwell (2011) contend that the methods American teachers use for teaching personal finance to elementary and middle school children are pathetic. For example, teachers tend to include decimalized dollar amounts such as $1.45 in their lessons to K–2 students, even though the requisite mathematical skills are not introduced until grade 4 at earliest (pp. 48)! According to the authors, this is both an issue of curriculum development and teacher education. Many textbooks “tack on” dollar figures to mathematical problems without any financial context (pp. 51–52). Elementary teachers are especially likely to lack the education and confidence to effectively teach financial skills to their students.

Being that my course under development is titled Introduction to American Personal Financial Literacy, I will not be assuming my students have extensive background knowledge. Therefore, much of the course materials and strategies used in my course will be of remedial level. It is thus appropriate to incorporate empirically supported suggestions for middle and high school education, and perhaps even elementary school. This article provides many useful ideas and several tables with topical suggestions (pp. 56) and suggested complexity–grade-level interactions (pp. 57–58).


d) Key Insights:

• Matching the needs of the learners is important and is perpetually difficult when developing “one-size-fits-all curricula” (p. 55).

Current teachers learned mathematics in the 1980s and 1990s, when mathematical instruction was more basic, according to the authors (p. 49). Therefore, the authors allege these teachers did not learn the requisite background information to teach personal finance, at least during their primary and secondary educations.

• The authors say that “a pedagogical shift is needed to affect meaningful change” (p. 46). I love how the authors have attacked this issue from many sides, particularly with their focuses on better textbooks and improved teacher education.


e) Further Reading:

Way, W. L., & Holden, K. C., (2009). Teachers’ background and capacity to teach personal finance: A national study. Journal of Financial Counseling and Planning, 20(2), 64–78.



Seyedian, M., & Yi, T. D. (2011). Improving financial literacy of college students: A cross-sectional analysis. College Student Journal, 45(1), 177–189.


b) Abstract:

Financial literacy has become more important than ever as an increasing number of college students are relying on credit cards to finance their education. We examine whether college students are knowledgeable about finance, whether they improve upon that knowledge, and whether their demographic profile, financial backgrounds, and engagement/motivation level affect their financial knowledge and learning. Recruiting students who voluntarily participated in the pre- and post-tests of personal finance and managerial finance, and using multiple regression and the results of student course evaluations, we find that using finance courses positively affect the students’ financial literacy. Moreover, we find that gender difference is found only in the pre-test of managerial finance, that female students significantly improved learning, and that students in the upper level of finance courses overall outperformed those in the lower level in both tests of personal finance and managerial finance. We also find that students’ job experiences, financial background, attitude and behavior, and class participation and motivation determine the amount of their learning.


c) Relation to Capstone Project # 1, Financial Literacy Course:

Sevedian and Yi (2011) administered the entire Jump$tart Coalition financial literacy survey (30 questions) to about 50 undergraduate students, as well as eight questions relating to managerial finance. This was done at the beginning and end of the semester in managerial finance or portfolio management college courses. The sample was primarily Caucasian (80%) at SUNY Fredonia, a campus in the New York University system.

In my opinion, there are quite a few issues with the authors’ methods, such as the loss of 15 students between pre- and post-test (64 to 49), their conflation of results from three separate undergraduate courses, the use of a volunteer sample, and a tendency to cherry-pick data. Nevertheless, several results emerged which I believe will be valuable to my course development, which will be explored in the Key Insights section (below).


d) Key Insights:

• One question in the Jump$tart survey asks whether an elderly person with only Social Security income and little savings will have a hard time getting by, or will have it fairly easy by simply reducing expenses. Sevedian and Yi found that students who said such an elderly person would have a hard time performed much better on other questions relating to personal finance (p. 186). Therefore, developing realistic financial beliefs may be correlated with improved financial literacy.

• Owning a savings account was correlated with better performance on the authors’ pre-test of managerial finance (p. 186). Perhaps opening the savings account was an educating experience for these students? Did the banker advise them of the benefits of a savings account, or did they open the account online and read bank webpages first? Who knows? It is important to note the current climate of very low interest rates on savings accounts. Basically, savings accounts in the post-2008 era function basically as psychological devices; very little money is earned versus keeping your money in a checking account. How does this factor in?

• A comparison of post-test results reveals that students who were in BUAD 320(B), Managerial Finance II, performed better than students in BUAD 320(A), Managerial Finance I (pp. 187–188). Students in the second course also participated more and expected higher grades, according to the authors. They believe that participation and effort is positively correlated with financial literacy, at least with respect to financial courses.


e) Further Reading:

Roberts, J. A., & Jones, E. (2001). Money attitudes, credit card use, and compulsive buying among American college students. Journal of Consumer Affairs, 35, 213–240.



Lucey, T. A. (2005). Assessing the reliability and validity of the Jump$tart survey of financial literacy. Journal of Family and Economic Issues, 26(2), 283–294.


b) Abstract:

Financial education represents an area of popular interest, owing largely to the Jump$tart surveys of financial literacy. However, while the surveys represent indicators of financial knowledge among high school seniors, these measures have not been statistically validated. This article describes an assessment of the surveys’ reliability (internal consistency), and validity. It reports a moderately high degree of consistency overall, however, discloses low to moderate internal consistencies among subscales. It also finds significant response differences to one quarter of comparable items between surveys. The researcher observes challenges to affirming the surveys’ validity and offers statistics suggesting social bias among survey items. He calls for further research into measures of financial literacy.


c) Relation to Capstone Project # 2, Companion Paper:

From my initial readings, the Jump$tart survey kept coming up again and again in financial literacy research—it is obviously considered an important instrument for measuring personal financial knowledge. I looked for articles lending credibility to the survey, and while there were distressingly few, this article is strong and refreshingly skeptical. The Jump$tart survey is revised approximately biennially, and while its empirical support is somewhat tenuous, it appears to be the “state of the art,” so to speak, among survey instruments for personal financial literacy. Lucey (2005) finds that the survey overall is too short, having only 30 items when the Jump$tart Coalition itself recognizes 49 financial benchmarks, and has low internal subscale consistency, but adequate internal consistency and inter-correlation consistency. As for validity, only face and content validity is apparent. While the coalition’s benchmarks might be more useful for curriculum development in my course, I will also be using this survey, or at least some aspects of it.


d) Key Insights:

• Lucey laments that congruent validity is impossible to determine; older financial literacy instruments have not been evaluated for reliability or validity, so there is nothing to compare the Jump$tart survey to (p. 290). Obviously, this field is sorely underdeveloped compared to others, such as motivational and personality instruments.

• Relating survey items to practical life may improve predictive validity (p. 290). This reminds me of a discussion from the graduate course, DEP 5057: Developmental Psychology, at UCF in spring 2015 with Prof. Valerie Sims. This discussion involved the Heinz dilemma, where Sims spoke of research indicating that when high school students were presented with a more realistic dilemma about having casual sex, a majority of the students who displayed high levels of moral reasoning with the Heinz dilemma regressed with regard to the more realistic scenario (e.g., they advocated having casual sex without telling parents). Could a similar phenomenon exist with respect to personal finance? Perhaps if a survey instrument included realistic questions, it may be more predictive? One possible question could be whether you should go to Disney World because your friends want you to go with them, but you have to charge it to your credit card because you have no money in your checking account. This could be set up as a story, which might aid readers in rationalizing and justifying the bad financial decision. Realistic questions may have greater predictive validity for participants who engage in such rationalization in real life.


e) Further Reading:

Jump$tart Coalition (2000, April 9). Financial literacy declining among 12th graders, coalition urges states to include personal finance in curriculum standards. Retrieved March 9, 2002, from


NOTE: Relate to Mandell & Klein (2007): Including personal finance in curriculum standards might not work if students remain unmotivated! Suggesting that education is a panacea may not be accurate.



Lindsey-Taliefero, D., Kelly, L., Brent, W., & Price, R. (2011). A review of Howard University’s financial literacy curriculum. American Journal of Business Education, 4(10), 73–84.


b) Abstract:

This article evaluates a financial literacy curriculum at the Howard University (HU) School of Business, by measuring the financial knowledge acquired after participating in a variety of programs. To evaluate the HU curriculum, the National Jump$tart Coalition (NJC) survey was administered to collect data on financial knowledge and demographic characteristics. Descriptive statistics and regression analysis were used to study the data. The results show that HU-Business students performance was comparable to Jump$tart’s national average for college students and Business/Economics students. HU Business students scored higher than the Jump$tart’s African American student sample. The regression analysis helped identity key factors that influence financial awareness for HU students including having checking account, electronic tax preparation, taking a course in personal finance or money management, GPA, and frequently balancing check book.


c) Relation to Capstone Project # 2, Companion Paper:

This article gives useful insights from the development of Howard University’s curriculum, based on the CreditSmart curriculum. In particular, the authors found that students with student loans performed 6.17% better on the Jump$tart tests, perhaps because of the required financial training prior to receiving the loan (p. 81). I believe this is an important point, because it shows that targeted financial education is efficacious, providing support for the conjectures of Mandell and Klein (2007). Why, then, are we not mandating education prior to applying for credit cards?

The authors also include a table with summaries of eight prior financial literacy studies in their literature review (p. 74). Among the papers I have read so far, this is depressingly rare. I may consider or use some of this information for my companion paper.

Important note: The Jump$tart survey was expanded in 2008 to include college students, at which time the high school version contained 31 items, and the college version contained the same 31 items plus 25 additional items for a total of 56 items. Articles from before 2008 do not account for this.


d) Key Insights:

• Overall, the authors’ literature review led them to the conclusion that American adults simply are not prepared to make financial decisions (pp. 74–75). This is a theme that appears again and again from reading the literature. While it can be demoralizing, it also shows us that a lot of “low-hanging fruit,” or easy gains relating to the financial literacy of the public, are yet to be picked.

• The authors statistical analyses led them to the conclusion that simply owning a checking account was correlated with an 18.9% increase in performance on the Jump$tart 56-item survey (p. 79). This is astounding at first glance. From anecdotal personal experience, I have noticed that many high school dropouts never attain checking accounts, or are barred from opening accounts due to accumulated debts relating to overdraft fees on past checking accounts. They are on the ChexSystems blacklist, the Early Warning Services blacklist, and may also have passed credit delinquencies, particularly relating to medical bills which are surprisingly easy to expunge, and yet they lack the knowledge, education, and even computer access that make such processes easier. It is difficult to dispute items on your Experience, Equifax, and TransUnion credit reports from your cell phone! While calling in is an option, many do not even know about the problem, nor how to request their free annual credit report, to begin with. We should not confuse correlation with causation here—individuals who have checking accounts are likely be financially advantaged in unrelated ways.


e) Further Reading:

McCormick, M. H. (2009). The effectiveness of youth financial education: A review of the literature. Retrieved from



Bosshardt, W., & Walstad, W. B. (2014). National standards for financial literacy: Rationale and content. Journal of Economic Education, 45(1), 63–70.


b) Abstract:

The National Standards for Financial Literacy describe the knowledge, understanding, and skills that are important for students to learn about personal finance. They are designed to guide teachers, school administrators, and other educators in developing curriculum and educational materials for teaching financial literacy. In this article, the authors explain the reasons for the development of the Standards by the Council for Economic Education and the work of economists, economic educators, and teachers to prepare them. They describe each of the six content standards and how they are supported by associated benchmarks at the fourth, eighth, and twelfth grades. The authors also discuss several valuable Standards’ features, including a focus on economic content and decision-making skills as the foundation for financial literacy.


c) Relation to Capstone Project # 2, Companion Paper:

This article presents proposed national standards for financial literacy, which could serve to either standardize or provide a common framework for K–12 financial literacy education throughout the United States. The standards include items such as incomes, savings, and credit. I particularly like the categories and their purposely timeless nature (pp. 66–67); the authors are keen to note that benchmarks such as “writing a check” are not included in their 144 benchmarks. It also seems intuitively logical to me that the benchmarks are cumulative and presented for the 4th, 8th, and 12th grade levels, since the skills build on each other like any math skills, and since these are key ages where developmental or cultural shifts take place. I will surely consider using the standards and suggestions the authors have presented in guiding and justifying my course design choices.


d) Key Insights:

• The authors note that time and uncertainty are often too difficult for elementary students to understand (p. 66); thus, it makes pedagogical sense to focus on these topics in middle and high school rather than elementary school. Similarly in my course design, it is important I do not overwhelm beginners with concepts that require prerequisite knowledge, although developmental concerns will be negligible since my course is aimed at adults.

• I love that the standards include “human tendencies or factors” that are illogical (p. 68), such as being influenced by marketing tricks such as anchoring, tending to “stick with our gut” even when knowing of the first-instinct fallacy (Kruger, Wirtz, & Miller, 2005), and being unable to judge probabilities or time. While some sociologists may argue otherwise, humans are simply not rational maximizers! I can see why some financial figures such as Dave Ramsey will advise their followers to do things such as completely avoid credit cards and to pay the small debts first rather than the high-interest debts first (the “snowball” theory)—while mathematically suboptimal, these approaches have better results for people who are vulnerable to financial failure if they use credit cards or become discouraged by too great a number of debts.



Kruger, J., Wirtz, D., & Miller, D. T. (2005). Counterfactual thinking and the first instinct fallacy. Journal of Personality and Social Psychology, 88, 725–735.


e) Further Reading (citation copied from article—not APA format):

U.S. Department of the Treasury, Office of Financial Education. 2010. Financial education core competencies. Federal Register 75(165): 52596. Washington, DC: U.S. Department of the Treasury. (accessed July 28, 2013). Continue reading Annotated bibliographies for financial literacy course

Outline for financial literacy course

Here is the outline I came up with on 2016-02-10 for my online course in development, Introduction to American Personal Financial Literacy.

NOTE: On 2016-10-29, Richard Thripp decided he will not be completing this course.

The course will allow “just-in-time” education by permitting learners to access modules in any order, thereby allowing them to create their own “teachable moments” where they can acquire specific strategies and information to address their current situations (Carlin & Robinson, 2012; Fernandes, Lynch, & Netemeyer, 2014).

The course will consist of a mix of lecture videos, text and picture-based modules, narrated presentations, and some external videos. Assessments will include quizzes and self-assessments, such as writing Twitter summaries (Bailey, Hendricks, & Applewhite, 2015) or evaluating one’s budget or net worth spreadsheet against a rubric. Assessments will primarily be unit based. Some modules will have exercises. This outline does not yet include assessments, exercises, instructional modalities, or citations to support the information presented in each module. I will be adding these items while developing the course.

Tentatively, the course will include 8 units containing 35 modules. Many of the standards of the Jump$tart Coalition for Personal Financial Literacy’s “National Standards in K–12 Personal Financial Education” (2015) will be met; these standards are widely used in financial literacy curricula and academic research. Although these standards lack outcome-based empirical support, this is unfortunately a pervasive problem in the entire field of financial literacy education (Fernandes et al., 2014). Other modules will focus on topics that academic authors have identified as problem areas. While not comprehensive, this course will address an impressive array of issues.

Unit 1: Why be financially literate?

Module 1.1: The disastrous consequences of financial illiteracy
Learn about the cycle of living paycheck to paycheck and consequences of making mistakes such as paying high interest rates or having bad credit, both short-term and long-term.

Module 1.2: Adopting the growth mindset
Do you believe that math skills are something you are “born with”? Perhaps you believe the same for personal finance skills? See the research that says these skills are like a muscle that can grow with diligent effort (Dweck, 2006).

Module 1.3: Avoiding payday loans and other schemes
Payday loans, rent-to-own stores, and pawn shops may help you make ends meet, but they do are incredibly disempowering in the long run (Karger, 2015). Learn about alternatives here.

Unit 2: Spending and Saving

Module 2.1: Crash course on banking, fees, and ChexSystems
Learn how checking and savings accounts work, how to avoid bank fees, and how a bad ChexSystems report can prevent you from opening new accounts or even prompt banks to close your existing accounts.

Module 2.2: Budgeting: Do you really need it?
Learn how to set up a budget, including your regular monthly expenses, surprise expenses and less-than-monthly expenses. Also: An alternative to budgeting—make every purchase a wise purchase.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 1. Develop a plan for spending and saving” (p. 12).

Module 2.3: Calculating your net worth
This module will teach you how to calculate your net worth. Let Microsoft Excel or Google Docs do the math for you. You will learn to realistically appraise your fixed assets, tally your liquid assets, and deduct your debts and liabilities.

Module 2.4: Consumer protection and payment methods
Learn about cash, debit cards, credit cards, Bitcoin, gift cards, coupons, return policies, and warranties. Learn that cash may be “king,” but it definitely does not offer the best consumer protections!
Competencies: Jump$tart Coalition (2015), Spending and Saving: “Standard 3. Describe how to use different payment methods” (p. 11); Credit and Debt, “Standard 4. Summarize major consumer credit laws” (p. 18).

Module 2.5: Goal-oriented saving
Learn how goal-oriented saving can motivate you and reduce your tax burden, including Health Savings Accounts and 529 qualified tuition plans.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 1. Develop a plan for spending and saving” (p. 12).

Module 2.6: Comparison shopping
Are you getting the best deal? Comparison shopping can be done from home, but there can be an overwhelming number of websites and similar products. Learn how to analyze anecdotal evidence (customer reviews) to determine if a product is right for you.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 4. Apply consumer skills to spending and saving decisions” (p. 12).

Unit 3: Credit and Debt

Module 3.1: The psychological toll of debt
Examine the psychological research on how being in debt may cause anxiety and dread. Explore several ways to motivate yourself to get out of debt.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 3. Apply strategies to avoid or correct debt management problems” (p. 17).

Module 3.2: All about credit cards and charge cards
Learn the technicalities of credit cards including interest rates, grace periods, late fees, penalty APRs, cashback and rewards, and cardholder benefits.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 1. Analyze the costs and benefits of various types of credit” (p. 15).

Module 3.3: The mystery of credit scores
Learn about the three credit bureaus, FICO vs. “FAKO” scores, how credit scores are calculated, the effects of credit inquiries, and a step-by-step plan to improve your credit score.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 2. Summarize a borrower’s rights and responsibilities related to credit reports” (p. 16).

Module 3.4: Student loans and alternatives
Learn about federal subsidized, federal unsubsidized, and private student loans, interest rates and deferments, and methods to reduce your loan burden such as grants, scholarships, and attending a less costly school.

Module 3.5: Mortgages
Learn about mortgages, tax benefits, how to get the best deal, and how to refinance an existing mortgage at a lower rate.

Module 3.6: Your car: A depreciating asset
Learn why your car is not a good investment, a better way to get a car loan, and how to negotiate the lowest price for a new or used car.

Unit 4: Employment Income

Module 4.1: Job interviews and promotions
Learn approaches that are supported by cognitive psychology for doing well in job interviews and successfully asking for a raise or promotion. Also, learn how to ace the psychological questionnaires that many job applications require—answer wrong and a human may never look at your application.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 1. Explore job and career options” (p. 21).

Module 4.2: Understanding your rights as a worker
Learn about equal opportunity laws, OSHA regulations, overtime pay, whistleblower protections, and how to compel an employer to relinquish your last paycheck.

Module 4.3: Understanding payroll deductions and income taxes
Learn how Social Security deductions, Medicare deductions, workers’ compensation insurance, and income tax work, including tax brackets and standard deductions. Figure out how to calculate your net hourly pay. Also: Learn how to increase your number of “allowances” to prevent giving Uncle Sam an interest-free loan out of your paychecks.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 3. Analyze factors that affect net income” (p. 23).

Module 4.4: Self-employment
Learn basic information about self-employment as a sole proprietor, including your increased tax burden, licensing, commercial auto insurance, deductions, legal liability, and how to figure out if your homeowners’ association prohibits home-based business activity, and whether such terms will be enforced.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 2. Compare sources of personal income and compensation” (p. 22).

Unit 5: Investing

Module 5.1: Defining your investment goals and risk tolerance
Learn how to assess a sensible level of risk tolerance based on your current age and desired retirement age. Learn about safe investments like bonds and certificates of deposits, as well as riskier investments that may yield big payoffs or might lose everything.
Competency: Jump$tart Coalition (2015), Investing: “Standard 2. Evaluate investment alternatives” (p. 26).

Module 5.2: Why picking stocks hardly ever works
Learn about index funds, diversification, and why actively-managed funds almost always under-perform index funds.
Competency: Jump$tart Coalition (2015), Investing: “Standard 3. Demonstrate how to buy and sell investments” (p. 27).

Module 5.3: Pros and cons of home ownership
Learn why renting or leasing might be better than buying, including information on property taxes and homeowners’ associations. Also: Lessons from the past on how to tell when real estate prices are in a “bubble.”

Module 5.4: How to retire in style
Learn to understand compound interest rates, retirement plans, 401(k) and Roth IRAs, employer matching, and the benefits of tax deferment. Learn how your Social Security benefits are calculated, and how to determine the best age to begin receiving them.
Competency: Jump$tart Coalition (2015), Investing: “Standard 1. Explain how investing may build wealth and help meet financial goals” (p. 25).

Unit 6: Risk and Insurance

Module 6.1: Understanding and avoiding identity theft
Learn the risks for identity theft and the methods thieves use. Learn how to proactively monitor your credit reports for free. Bonus: How to keep track of your account passwords without reusing the same password over and over.
Competency: Jump$tart Coalition (2015), Financial Decision Making: “Standard 7. Control personal information” (p. 41).

Module 6.2: When is insurance a good idea?
Learn about the fundamental purpose of insurance, and use this knowledge as a lens to judge the types of insurance that are must-haves and the types that are frivolous.
Competency: Jump$tart Coalition (2015), Risk Management and Insurance, “Standard 1. Identify common types of risks and basic risk management methods” (p. 31).

Module 6.3: How to lower your car insurance premiums
Learn how car insurance companies offer wildly different quotes through different channels. Learn how to make sure you are getting the discounts you deserve, and how making a “lump sum” semiannual payment can save you hundreds over monthly payments. Also: Learn about your Comprehensive Loss Underwriting Exchange (CLUE) report, how to request it for free from LexisNexis, and why even talking to an insurance agent about a potential claim can raise your rates.

Module 6.4: Navigating the Health Insurance Marketplace
Learn the fundamental differences between bronze, silver, gold, and platinum plans offered through, how Advance Premium Tax Credits are administered and calculated, when the penalty for not having health insurance is enforced, and when paying the penalty may be a cheaper option.
Competency: Jump$tart Coalition (2015), Risk Management and Insurance: “Standard 3. Justify reasons to use health, disability, long-term care and life insurance” (p. 33).

Unit 7: Financial Decision Making

Module 7.1: Every decision has financial consequences
If time is money, even the decision to watch TV costs you money! Learn to consider the financial consequences of day-to-day decisions; empower yourself financially and you will be able to focus on what is important to you in life.
Competencies: Jump$tart Coalition (2015), Financial Decision Making: “Standard 1. Recognize the responsibilities associated with personal financial decisions” (p. 35); Financial Decision Making: “Standard 4. Make criterion-based financial decisions by systematically considering alternatives and consequences” (p. 38).

Module 7.2: When college is not worth it
Learn about the opportunity cost and intangible benefits of a college education, how to avoid predatory for-profit institutions, and how to figure out if college education will improve your salability.

Module 7.3: Dealing with the financially reckless significant other
Learn strategies for reining in a financially reckless spouse or partner, and how to spot the warning signs early on.
Competency: Jump$tart Coalition (2015), Financial Decision Making: “Standard 5. Applying communication strategies when discussing financial issues” (p. 39).

Module 7.4: Having and raising children
Did you know that having your baby in December could save you thousands on your tax bill? Having children is the most costly and most rewarding decision many couples and individuals make—here, we will explore some of the financial ramifications, both common and obscure.

Module 7.5: Tax avoidance
Learn the differences between tax avoidance and tax evasion, why donations become more important at higher income levels, and when to itemize deductions.

Unit 8: Paying it Forward

Module 8.1: Charity and philanthropy
Learn how to give back to causes you love—often, without spending a dime.

Module 8.2: Be an agent for financial literacy
Learn to determine if others want your financial advice and how to provide it in a manner that minimizes your legal liability. (Only free advice-giving will be covered—not consulting or fee-based advice.)

Module 8.3: Reflection
Synthesize what you have learned in this course by writing a personal reflection.



Bruning, R. H., Schraw, G. J., & Norby, M. N. (2011). Cognitive psychology and instruction (5th ed.). Englewood Cliffs, NJ: Pearson Education.

Bailey, S., Hendricks, S., & Applewhite, S. (2015). Student perspectives of assessment strategies in online courses. Journal of Interactive Online Learning, 13(3), 112–125.

Bosshardt, W., & Walstad, W. B. (2014). National standards for financial literacy: Rationale and content. Journal of Economic Education, 45(1), 63–70.

Carlin, B. I., & Robinson, D. T. (2012). What does financial literacy training teach us? Journal of Economic Education, 43, 235–247.

Collins, J. M., & Holden, K. C. (2014). Measuring the impacts of financial literacy: Challenges for community-based financial education. New Directions for Adult and Continuing Education, 2014(141), 79–88.

Council for Economic Education. (2013). National standards for financial literacy. Retrieved February 10, 2016, from

Dweck, C. S. (2006). Mindset: The new psychology of success. New York, NY: Random House.

Fernandes, D., Lynch, J. G., Jr., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60, 1861–1883.

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Learning objectives for financial literacy course

Here are the learning objectives I came up with on 2016-03-05 for my online course, Introduction to American Personal Financial Literacy.

NOTE: On 2016-10-29, Richard Thripp decided he will not be completing this course.

1. Ability to articulate the benefits of financial literacy

2. Knowledge of several financial schemes and pitfalls

3. Motivation to adopt financial habits and practices that result in wealth accumulation, including adoption of the growth mindset (incremental theory of intelligence)

4. Understanding of banking, saving, budgeting, net worth, and payment methods, including ChexSystems reports

5. Understanding of interest rates as well as several types of fees, financial pitfalls, and consumer protections

6. Achievement of a rudimentary understanding of credit cards, credit reports, and credit scores, including how to protect and improve one’s credit reports and credit scores

7. Knowledge of American federal and private student loans

8. Knowledge of potential best practices for financial management while in college, including selecting an institution and determining the financial value of a course of study

9. Ability to articulate the pros and cons of renting, leasing, mortgages, and home ownership

10. Understanding of the economics of owning, renting, and leasing cars

11. Development of a strategy for getting job interviews and succeeding in them

12. Understanding of several American worker rights including OSHA regulations, rights to overtime pay, rights regarding non-compete and non-disclosure agreements, and whistleblower protections

13. Understanding of American payroll deductions and federal income taxes

14. Knowledge of several challenges relating to American self-employment

15. Rudimentary understanding of investing, risk tolerance, and index funds

16. Understanding of Social Security and a mathematical approach to retirement planning

17. Ability to monitor for identity theft, minimize risk factors, and develop a plan to address potential identity theft

18. Rudimentary understanding of the purposes of insurance, including CLUE reports

19. Ability to implement strategies to lower car insurance premiums and/or improve coverage

20. Knowledge and basic understanding of the American Health Insurance Marketplace

21. Ability to articulate the financial consequences of various everyday decisions, including methods for quantifying the monetary value of time

22. Acquisition of strategies for dealing with a financially reckless significant other, including an understanding of the spendthrift–tightwad model of complementary attraction

23. Understanding of some of the basic financial challenges and considerations in having and raising children

24. Basic understanding of American personal and corporate tax avoidance strategies, including key differences between tax avoidance and tax evasion

25. Understanding of basic considerations regarding charity and philanthropy

26. Ability to perform targeted financial literacy interventions during “teachable moments” in the lives of friends and family, where appropriate

27. Ability to synthesize and reflect on one’s financial literacy journey

Financial Literacy Quiz, 1/26/2016

I would love feedback or testing from people on this financial literacy quiz I created today, 1/26/2016:

It is only 10 questions, and covers the topics of credit scores, income tax, coupons, checking accounts, payday loans, and a couple others.

Unfortunately, Udemy does not have great quiz options. I spoke with Dr. Bobby Hoffman, who is advising me with the creation of my online course at University of Central Florida, and he said it is possible to create a Udemy course while directing students off the site for assessments. I am fairly impressed with GoConqr quizzes, since they offer multiple selections, explanations, randomization, public quizzes, and many other options for free.

My Capstone projects for the Applied Learning & Instruction M.A. program at University of Central Florida involve creating an online course called Introduction to American Personal Financial Literacy, and a companion paper.

I have not yet determined my course objectives and learning theories that will be used, but will obviously be doing this very soon, and will make sure future course materials are more informed by research. I created this quiz to get myself started with assessments and brainstorming.


QUESTIONS BELOW, but go to to try the quiz (order of questions and choices will be randomized). On GoConqr, after you submit the quiz, review the questions to see my explanations regarding the correct answers.

TITLE: A fairly difficult American financial literacy quiz written by Richard Thripp on 1/26/2016

DESCRIPTION: A fairly difficult American financial literacy quiz written by Richard Thripp on 1/26/2016. 10 questions; all multiple choice including two with check boxes.


1.) Which of the following is MOST detrimental to your credit score?

a.) A poor mix of account types (e.g., only having credit cards, but no auto loans, mortgages, student loans, etc.)
b.) Many recent credit inquiries
c.) A missed payment that was over 90 days late
d.) High credit utilization


2.) You are exactly one week late paying your electric bill, and incur a 1.50% late fee for this. Converting this to an annual percentage, about how much effective APR did you pay?

a.) 0.03%
b.) 1.50%
c.) 18.00%
d.) 78.00%


3.) When filing your federal income taxes, you take the standard personal deduction of $6300, but you could have deducted $8300 had you itemized your deductions. If the income that could have been reduced is entirely in the 25% tax bracket, how much additional federal income tax did you pay by taking the standard personal deduction?

a.) None
b.) $250
c.) $500
d.) $2000


4.) Amanda wants to marry Fred. Fred has no savings or assets and receives $650 per month in SSI disability benefits. Amanda has $5000 in her savings account, $3000 in other assets, no disabilities, and minimal income. Based on 2016 federal law, what will happen when Amanda and Fred get married?

a.) Fred’s SSI benefits will continue to be $650 per month
b.) Because Fred is married, his benefits will increase
c.) Fred’s benefits will be reduced by about 50% due to his new spouse’s assets
d.) Fred will no longer receive any SSI benefits because he now has over $3000 in combined assets with his spouse


5.) Stephanie is a single, self-employed entrepreneur with taxable income of $60,000 from her business after itemized deductions, cost of goods sold (COGS), and other deductions. If Stephanie was to increase her income to $70,000 in 2016, how much additional money would she wind up with? All of Stephanie’s additional income would be in the 25% tax bracket. Stephanie receives no income-based benefits and lives in Florida, so she does not have to pay state or local income tax. Stephanie is a sole proprietor, so she does not pay unemployment tax.

a.) $5970.00
b.) $6161.25
c.) $7500.00
d.) $10,000.00


6.) Kaley offers Samantha $5.00 to drive her from Daytona Beach to Orlando, a trip that takes 1 hour and is a distance of 50 miles. Since gas is $1.999 per gallon and Samantha has a Toyota Prius that uses one gallon of gas per 50 miles driven, Kaley says this is fair. Samantha does not enjoy Kaley’s company, has no secondary reason to go to Orlando, and does not particularly enjoy driving. Samantha values her time at $8.00 per hour. Which of these options best characterizes the cost to Samantha?

a.) + $1.00: Samantha got $1.00 more than it cost her in gas to drive 100 miles round-trip.
b.) – $15.00: Samantha got $1.00 more than her gas cost, but wasted 2 hours of her time, which she values at $16.00.
c.) – $30.00: Samantha lost $15.00 after time and gas. Samantha paid $30,000 for her Toyota Prius and expects to get 200,000 miles out of it, meaning that her cost of vehicle ownership is $0.15 per mile, which is $15.00 to drive 100 miles.
d.) – $50.00: Samantha lost $30.00 after time, gas, and vehicle depreciation. However, Samantha also pays for her auto insurance, oil changes, tires, and other maintenance, which she estimates at $0.10 per mile, which is $10.00 to drive 100 miles. Also, since drivers on I-4 are horrifying, Samantha believes she should be compensated at least $10.00 for the risk of bodily harm that she exposes herself to when driving to and from Orlando.


7.) Steve overdraws his checking account by $0.12 when buying a soda with his debit card. Steve’s account offers overdraft protection, but charges a $37.00 fee for each overdraft. Instead of paying the $37.12, or requesting a courtesy fee waiver, Steve abandons his account. It goes on to accumulate $50 in additional fees, but is not referred to collections; a black mark is left on Steve’s ChexSystems report, but not his credit report. Eight months later, Steve wishes to open a new checking account at a different bank. Will he be able to?

a.) Yes, because more than six months have passed.
b.) Possibly, but only at banks that do not use ChexSystems.
c.) No, because derogatory ChexSystems data persists for 5 years, and all banks use ChexSystems.
d.) No, because anyone who is delinquent on a checking or savings account is permanently barred from opening a new account at any U.S. bank until the debt is resolved, as provided for in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.


8.) Which of the following are true about payday loans? (Check all that apply)

a.) Payday loans should be used as a last resort
b.) Payday loans have extraordinarily high interest rates
c.) Under no circumstances is there ever a reason than anyone should take a payday loan
d.) People who use payday loans tend to be middle-class professionals who manage their money poorly


9.) Kristen, a poor college student, receives $100 cash from her aunt for her 19th birthday. She decides to buy a new pair of shoes with this money, a “splurge” purchase for herself that she would never buy with her own money. She believes this is acceptable because the money was a gift. What is the most important flaw in this reasoning?

a.) Kristen should be making “splurge” purchases for herself more often and with her own money, not just with money given as gifts. This will allow her to be more psychologically healthy.
b.) Money is money; the money Kristen received as a gift is no less valuable than the money she works for. It does not make sense to treat money from one source differently than money from another source, except for taxation or accounting purposes which generally don’t apply to poor college students.
c.) It will be difficult for Kristen to find a pair of shoes that costs exactly $100, especially with sales tax. Therefore, she should buy a U.S. savings bond.
d.) Since it’s Kristen’s 19th birthday, a “splurge” purchase is unwarranted, because this is not a milestone year like the 16th, 18th, 21st, or 25th birthday. Therefore, Kristen should treat her 19th birthday like any other day.


10.) Which of the following is true about manufacturers’ coupons? (Check all that apply)

a.) If the item is taxable, the amount of the coupon is subject to sales tax.
b.) The amount of the coupon must be declared as income.
c.) Manufacturers’ coupons can never be combined with store coupons.
d.) While manufacturers’ coupons can reduce the price of an item, most retailers will not allow the price paid by the customer to be reduced below their wholesale cost.
e.) The Internet is a valid source for manufacturers’ coupons.
f.) Manufacturers’ coupons function as a sort of reverse mail-in rebate; stores must transmit or mail in the coupons to receive reimbursement from the manufacturer.
g.) Manufacturers’ coupons are an effective way to save money, but one should be careful not to make unwise purchases just because they have a coupon.

Ten Bad Habits of Personal Finance

The following list is in no particular order! It was written by me during three sessions on 2016-01-03, 2016-01-14, and 2016-01-16. These are issues salient to me. There are certainly other and perhaps more important issues such as salary negotiation, failing to itemize deductions, and poor estate planning. However, such issues are not my areas of expertise, nor are they current areas of interest for me.

Not getting what you deserve

I have met community-college students who literally did not know about the FAFSA. Their parents were low-income and they could have been getting over $2500 in federal Pell grant money per semester, but were instead getting nothing because they didn’t even apply.

This habit can be related to not researching or trying hard enough. For example, many consumers think they have no recourse when a price goes down after they purchase an item, while in fact, even if the lower price is being offered at another retailer, their credit card probably offers price protection if they would just take the time and effort to file a claim. Unfortunately, such individuals probably didn’t even read about their card benefits or think of this possibility.

This habit can also be related to being a push-over. I always choose the performance goal-orientation when it comes to matters of customer service or contract breakage: what are OTHER customers getting that I’m not, because they are standing up for themselves and demanding results? A VERY common example of this is bank fees. The typical consumer incurs bank fees without a whimper, yet these fees may not even be legitimate—or if they are, will probably be waived as a one-time courtesy if you ask nicely.

Not getting what you deserve is a HUGE problem. It relates to education, mindset, self-esteem, and many other issues. Most of us do not have an advocate when it comes to personal finance; we must do our own Google searches and take action to save ourselves money. Unfortunately, too many Americans would choose to put in extra hours at a low-paying job over using this time to become financially literate and earn or save many more dollars per hour.

Finally, consider that money saved is typically NOT taxable income. Pell grants, price-protection refunds, and courtesy waiver of bank fees are not subjected to payroll deductions or income taxes, yet if you DON’T pursue them, you have to earn anywhere from 15 to 50% more income to compensate for the opportunities you missed.

Paying for poison

When you buy alcoholic drinks, tobacco products, candy, soft drinks, or energy drinks you are literally PAYING to poison yourself. Not only do these products have no nutritional value; they actively damage your liver, lungs, and other organs, reduce your quality of life, and if chronically consumed, make you feel powerless and unhappy.

While soft drinks are expensive in 20-oz. bottles from the retail cooler, often running upward of $1.50, they are even more expensive at sit-down restaurants, often costing over $3.00 with tax and 20% tip. Just say no. If anyone judges you negatively for ordering water, you should probably find better dates or friends.

Financial needs expanding to match or exceed the amount of money available to you

Like many bad financial habits, this is more common with people who have achieved less formal education, e.g., high-school dropouts. If you have $10.00 in your pocket, this does NOT mean you need to spend $9.92 at the gas station on a 20-oz. bottle of Sprite, Monster energy drink, candy bar, and pack of cigarettes. YES, spending the $10.00 does prevent it from being stolen, and relieves you of the threat of it being “borrowed” (through peer pressure or coercion) by family or friends. However, it cuts off all future opportunities for the money and leaves you with no degrees of freedom to adapt to circumstances or opportunities.

Earning more money does not mean your lifestyle should immediately become more costly. In the Millionaire Next Door, people who invest wisely and increase their income, while continuing to drive an older car and live in a modest home, are called “prodigious wealth accumulators.” While this predilection for accumulation may seem empty if the wealth is never “enjoyed,” consider that these millionaires often enjoy the process of wealth accumulation itself, and the freedom it affords them. They typically are not preoccupied with spending. While “you only live once” is a comforting saying for the financially obtuse, heavy saving rather than heavy spending may lead to greater satisfaction and happiness, particularly when you have dependents to care for.

Obviously, this habit gets much worse when debt is involved. It is most certainly NOT in your best interests to pay 25.24% annual interest on these frivolous purchases.

Picking the wrong partners and friends

If you are dating or become married to someone who spends frivolously, it is very possible that they will not change. In fact, nagging and complaining may push them to become even more decadent and foolish in their financial habits. An analogous example is the devoutly religious family who raises a child who immediately announces his or her atheism at 18. Instead of seeing your partner as who you wish they would become in the future, a more realistic outlook may involve projecting their past behavior into the future; that is, assuming their financially unsound habits will only continue or become proportionally worse as they have access to increased income and lines of credit. If you accept these low expectations, you will probably have a truer understanding of the financial handicap (or even financial ruination) that being committed to this person will entail. In many cases this can be a deal-breaking issue.

Similarly, your choice of friends can hurt your finances quite a bit. Friends may use peer pressure to get you to buy things or go to events that are costly and not among your desires or in your best interests. Also, their bad financial habits can influence you, and they may become dismissive or jealous when you start working to improve your financial situation. Albeit, choosing good friends is a general issue that impacts many other areas of life. It may not seem that you have many choices in friends, but assuming you are an intro- or “ambi”-vert, consider that jettisoning toxic friends from your life may be a good choice, if they have proved unwilling to change.

Having or raising children

We often see the figure of $250,000 being bandied about as the cost of raising a child from birth to 18 years of age. While this may seem astronomical to some, to any middle-class American, the idea of a child costing $14,000 a year should seem quite modest. Of course, there are economies of scale to be considered when having multiple children, as well as many incentives and subsidies from the State. However, when considering how child-rearing transforms your life, it clearly costs far more than $250,000 per child in opportunity cost (particularly for mothers), and more importantly, time. Having a bigger house with additional bedrooms and bathrooms is very expensive. There is also so much time and energy to be sacrificed, and American children are prone to rebellion against even the best of parents. For example, at a young age, your child could take up drinking or some other dangerous pastime and wind up dead, completely destroying your investment.

One of the prime reasons people have children is to pass their genes on. When you die without having children, particularly if you are an only child, your lineage terminates. While raising the children of others (whether through adoption or committing to a single parent) is better for limiting the rate of increase of the human population, it does nothing for continuing your bloodline. When considering the astronomical toll that having or raising children imposes on your life, both financially and temporally, you should consciously consider how valuable continuing your bloodline is to you, particularly if you believe you are special and that your specialness is heritable.

Of course, it is well known that having children at an early age is predictive of poverty, and less formal education is predictive of, or at least correlated with, both. This cycle is perpetuated among children who grow up with low socioeconomic status (SES). Given that picking a financially reckless partner can have profound negative impacts on your SES, such a choice may function as a generational curse against your bloodline, especially if such recklessness is inherited, whether genetically or environmentally.

Obliviousness to basic arithmetic

With the recent Powerball lottery drawing on 2016-01-13, we saw that Americans are incapable of understanding odds. See, even with a $1.5 billion jackpot, your odds of winning still require a $584 million net payoff to be in your favor. The $2.00 you spend to buy the ticket are certainly net funds, since you have already paid FICA taxes, income taxes, etc. on them. Therefore, it is completely incorrect to focus on the gross amount of the jackpot. Further, the $2.00 spent on each ticket are funds spent now. Money is always more valuable in the present (among modern fiat currencies). The jackpot amount is based on a 30-year annuity, and is a figure based on the total gross amount you will receive without any downward adjustments for projected future inflation. The after-tax lump some payment was somewhere around $584 million, but with so much fascination with the jackpot, it ended up being split 3 ways. Therefore, the actual odds-based ticket value was probably somewhere around 80¢, after figuring in consolation prizes. That’s as good as it gets for the Powerball. An immediate 60% loss. Typically, jackpots are far lower, and even considering the recent 67% increase in odds from 1 in 175 million to 1 in 292 million, we see that this was still the best cost–benefit ratio for Powerball; the 2nd largest jackpot was much less than half the 2016-01-13 jackpot. Obviously, your (averaged) odds of dying in a car accident today are better than 1 in 292 million.

Insurance is arguably the inverse of lotteries; you pay a relatively small premium to avoid rare yet potentially catastrophic costs. With lotteries, you play a small entrance fee for a minuscule chance at a fantastic upside. While no competent financial planner advocates reckless lottery spending, being well-insured is something that experts and empirical evidence supports. However, without understanding of arithmetic, fractions, percentages, interest, compounding, odds, risk, insurance laws and procedures, etc., you could easily get suckered. This education is sorely lacking from K–12 schooling and many people find it tedious and uninteresting to acquire, despite its importance.

Obliviousness to basic arithmetic leads to being screwed over. You’ll buy the wrong things, be fooled by psychological tricks, and misunderstand every financial decision you make.

Eating out and throwing away food

I understand that some people do not have the appetite for large portion sizes that I have. Nevertheless, excluding salads, ice cream, and frozen yogurt, you can easily take home most foods to be eaten as leftovers. I can’t understand throwing away food prepared at home or purchased while dining. Even at a buffet, I rarely through out food. As someone who has worked in restaurants and in the stockroom of a grocery store, I know that conservation often seems pointless after seeing firsthand how much these businesses waste. However, it typically reduces your costs, improving your financial situation. Instead of getting a soda for $2.99 and eating part of your plate, drink water and eat all of (the food on) your plate. The calorie count will probably be the same, and you’ll be getting better nutrients.

Failing to understand the cost–time relationship

If time is money, money is time. You can buy other, foolish people’s time with your money! Therefore, while money cannot increase the amount of time you have (except with respect to extended lifespan due to better diet, medicine, etc.), it can allow you to accomplish more by using other people’s time, without slavery or duress. This is an amazing characteristic of money.

One example of where people vastly overvalue cost (and undervalue time) is in selecting a gas station. Basically, going out of your way at all to save a few cents per gallon is not worth the time, inconvenience, or effort, because you are probably only buying fewer than 20 gallons of gas anyway and would be saving less than a dollar or two. Yet, people often driver further, plan their routes, and devote considerable mental energy to such tiny savings on gas prices, while overlooking other huge financial blunders such as $100+ monthly cell phone bills.

Your time is valuable, and becomes obviously more valuable as you age. However, realizing the value of your time in youth is preferable; you are not likely not burdened by failing health and waning energy in your youth. Of course, the value of your time in dollars is probably related to your income and accumulated wealth; if you have no savings, you are going to have to make some very time-inefficient decisions just to survive. Becoming financially literate will help you avoid being homeless or without savings in the future, however.

If you live to 80, you have 62 adult years, or 22,645 days. How many of these days will be spent dying, sick, or in the service of others? Perhaps 5000? If you work in an awful career or live with a toxic spouse long enough, perhaps 10,000? You might only have 15,000 or fewer good days. Even a long human life is very short in many respects. You should not only value and guard your time, but you should also actively and thoughtfully evaluate its use and optimization. Since money is a vector for time, allowing you to free up time or employ the time of others, it should likewise be guarded.

Using credit cards really badly

There have been so many articles written about responsible credit card use that it is difficult to broach this subject without being trite. I will simply present this short vignette I typed up:

Racking up charges on items that are cash-equivalents or are essential to earning money, on a credit card with a 12- to 24-month 0.00% promotional APR rate, while you have savings or low-risk investments that earn a solid return during this period. While the level of risk of your investments should always be such that it is very unlikely you would have to pay credit card interest rates, the potential for profit here is large: consider that if you max out a credit card with a $20,000 credit line for 12 months and invest the money in something such as an S&P 500 index fund, which earned about 8% annually on average over the past 10 years, you could make over $1500 gross in just one year. The savvy credit user also knows that the negative impact of high credit utilization effectively vanishes in less than a month after paying off the balance; as long as you aren’t taking out a mortgage or car loan during the 12-month period, it will be of no practical significance. (Caveat: Credit scores are being used for more things and I am not sure how detrimental this may be to your car insurance rates, health insurance rates, seeking an apartment, or seeking a job. If your overall utilization is below 30% across all your credit cards, the negative impact to your credit score will be lessened).

Racking up tuition charges on the above credit card at a 2% convenience fee, because you believe you “probably” can pay them back at the end of the year and avoid student loan fees and interest. Then, “probably” becomes “no way in hell” and you end up paying 22.99% APR on debt you could have been paying 3.4% APR on.

Racking up charges on the above credit card without understanding that the 0.00% APR does NOT mean no payment is due each month. Then, missing the monthly minimum payment and being immediately subject to the 29.99% penalty APR, with no way to pay off the debt.

Buying a house

Buying a house used to be a completely sane decision. As of January 2016, however, American housing prices are quite high; they are above historical averages when compared to wages, and perhaps entering another bubble. Very few people even think of making the standard 20% down payment on a house, let alone buying one entirely with accumulated savings. While cash sales are on the rise, these buyers are part of an elusive rentier class that epitomizes the startling stratification of wealth in America; many are banks themselves, and others are foreigners (try buying real estate in Mexico or another country as a foreigner, and you will see that America is unusual). While housing is historically an appreciating investment, and interest rates are quite low with good credit, maintaining a house costs a boatload of money, which may approach or even exceed the costs of renting or leasing. While accumulated equity is a salient rallying cry, a house can also be an albatross; it can tie you to a geographic area, preventing nationwide or even statewide job searches.

I have no fewer than three friends in their early to mid-twenties who are looking to buy houses, but without (in my opinion) any compelling reasons to do so. Paying rent every month is hard, and having a house is the holy grail of the American dream because it allows you to accumulate lots of stuff, but by renting and keeping your belongings to a reasonable minimum, you are much more flexible and mobile.

Picturing a fairytale future

I am amazed by how many women who are otherwise progressive feminists, yet still yearn for the “rich husband” who will wipe out their student loans and finance their unsustainable lifestyles. This is a profoundly demeaning and patriarchal idea, and yet, for many, it remains more appealing than self-discipline and personal responsibility!

Of course, it would not be fair to criticize young women without also criticizing young men who are aimless and adrift, not working toward a prosperous career nor even pursuits that provide meaningful personal fulfillment. In either case, descending into “magical thinking,” where one relies for hope on some black swan, external event such as winning the lottery or receiving an incredible job offer, becomes far too common. Self-discipline is a bitter pill to swallow, and is something that probably must come about by an internal impetus for meaningful change, rather than external pressures. It may also be disconcerting to recognize that self-discipline is a cumulative process, because it requires admitting that years or decades have basically been frittered away. However, our mortality coupled with the unidirectional nature of time indicts the present day as perennially the best and soonest feasible time to initiate meaningful change. While you may have to lower your fairytale expectations if advanced age, a criminal record, or enormous debts or obligations are present in your life, this does not mean you should give up. Further, the process of applying self-discipline may be enjoyable in itself (indeed, if it is not, persistence is difficult).


In encouraging personal financial literacy, as with any other educational ambition, criticizing and denigrating people for their ignorance, bad choices, and ridiculous beliefs often pushes them away. “Sneaking in” belief change in small, measured quantities, without labeling it as such, may be more efficacious. Moreover, maintaining an encouraging, forward-looking attitude that recognizes individual needs and individual levels of understanding is almost unarguably superior to belittlement. It is my hope that my online course on the Udemy platform, Introduction to American Personal Financial Literacy, currently under development and slated for completion in April 2016, partially fulfilling the requirements of my Master of Arts degree in Applied Learning & Instruction at University of Central Florida, will recognize these individual needs and encourage meaningful learning and change, without overwhelming or belittling students, encouraging a growth mindset throughout.