Hi there.
I use the phrase, “Nobody teaches this stuff, and everyone is expected to know it,” a lot. Now is my chance to teach it.
I was recently asked by a friend from the Salvation Army to lead two 45-minute Money Matters seminars. Brief. Basic. Need to know information.
How do you decide what to pick? There are so many valuable things worth teaching, how do you pick and choose the best?
I started by framing the presentation around the big movers that most people overlook: Money Stories, Budgeting and Compound Interest.
I plan on asking the room what they think of when they see a dollar sign. I learned this idea from the Kitces & Carl podcast. Show a dollar on the screen, and ask everyone to write down the first thing that pops into their head when they see it. It helps quickly illustrate that people come to conversations about money from very different places, and that history helps to color the story that we build when we develop any kind of plan. The history reveals why things seem easy for some people and difficult for others.
That transitions nicely into conversations about managing money and budgeting. It is crucial to connect the budget to what is important in our lives, otherwise we simply won’t stick to it. And every family is different. Budgeting is either a math equation or a reflection of your values. A budget means getting to decide what you spend your money on, and being in the driver’s seat rather than a passenger. Dave Ramsey says it well: you either manage your money or the lack of it manages you.
I can’t have a conversation about money without talking about the magic of compound interest. I think it’s best illustrated by the question: “Would you rather have a million dollars, or a penny doubled on every square of a chess board?” Doubling that penny is worth about 92 quadrillion dollars – more money than exists in the entire world. While no one’s money actually doubles like that, this illustration helps visualize the exponential growth of compound interest. And it really captures the idea that the slow bit – the early parts – is when most people quit.
Say you put $50 a month away for twenty years and it grew at 7%. You'd have put in $12,000, and you'd be sitting on about $26,000. That's a made-up rate for the sake of the math – nothing actually grows at a fixed 7% – but it illustrates how powerful compounding is.
Lastly, I want to give some guidance on making good money decisions. I think the best advice is to be thoughtful and thorough with money decisions. Said simpler: be slow. Personally, I pray about big decisions like taking a new job, moving to a new city or buying a home. Whatever your version of that is, slow is the point. But being slow doesn’t just apply to the big decisions. It can be as simple as, “My spouse and I talk about all purchases over $100.”
What won’t make the cut? Unfortunately, there's a ton: insurance, debt payoffs, investing basics, real estate, major purchases, retirement, college funding, the federal reserve, and on and on and on. There just isn’t enough time.
Wise money decisions aren’t flashy and they won’t get millions of views on TikTok. They are fundamental building blocks that take years to show fruit. The good news is that it isn’t rocket science. It’s just hard.
So what would you teach?
Until next time, God Bless.
Ian
