On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your questions on this form.
A Vox reader recently wrote in: I am a personal finance teacher in Florida, where the state has recently mandated a semester-long financial literacy course for graduation. My students come from economic backgrounds ranging from daily uncertainty to affluence. The fin lit lessons universally focus on standard rules to follow in moving toward financial freedom, such as six months of income for an emergency fund, 70-20-10, 50-30-20, cutting lattes out of your life, etc.
These are one-size-fits-all answers that ring pretty hollow in households where the mere notion of saving and investing seems like a fantasy. When speaking to students on public assistance, in single-parent households, with modest incomes in the face of growing expenses, what pathways can I offer to them that are realistic? It’s an overwhelming challenge for so many Americans to climb the increasingly mythical ladder of success that resides at the core of our national identity.
If you want to help your students find realistic paths toward the next rungs on their individual ladders — which may or may not look anything like the so-called “ladder of success” — you need to ask each of them what ladder they’re trying to climb.
Many of them won’t know, especially if your students are still in high school.
But they’ll probably know something, like “I want more money” or “I want to go to college out of state.”
Ask them why — and make them be specific.
“I want money to buy skin care products,” for example, is a specific and realistic goal for a high school student. A college student might want money to take a trip or move off-campus or help out a parent who is struggling financially.
You can get your students even closer to the next rung on their ladders by asking them the why a second time.
“I want money to buy skin care products because I want to make better TikTok videos,” for example, or “I want money to help my mom because I know she’s worried about making rent.”
Then, see if you can get your students to put a number on their goal. Would they need $150 per month, or would the number be closer to $500?
Once the goal is defined to the second level of specificity and has a number attached, you can start talking tactics. Would it be better to earn an extra $150 every month, for example, or could they save the money they need by looking at their spending habits and figuring out what to cut?
Your students are likely to have very different answers to this question, many of which may be dependent on their household income (including whatever allowances they might receive) as well as the amount of free time they have and their level of entrepreneurial spirit. The purpose of this exercise isn’t to promote one answer over another; it’s to give your students realistic experience in evaluating various types of trade-offs.
From there, you can discuss how similar tactics might apply in adulthood. If they’re thinking about moving into a better apartment, for example, they’ll want to come up with a good reason for moving (to be closer to a workplace or to give each of their kids their own rooms) as well as a dollar figure that they might need to achieve their goal. At that point, it’s all about trades. Giving up a daily latte could add $30 to their apartment fund every week. Giving up a few hours every night could help them learn a new skill that could get them a job or help them build a side hustle. Which of these choices is easier to make? Which one could be more beneficial over the long term? (If no choices are available or possible, it may mean the goal is not realistic from their current rung of the ladder, and they may need to choose a different goal.)
All of this depends, of course, on your being able to teach your students more than the generic personal finance curriculum required by the state of Florida. I don’t know if you have the capacity to ask each student to define a personal goal to the second level of specificity, for example, or to talk to them seriously about tactics and trade-offs.
I suppose that if you don’t have that power or that time, you could always send them a link to this column.
From another Vox reader: Most Americans live paycheck to paycheck. How can we get out of the hole?
I could answer this question in two words: See above.
That said, I’ll run the exercise with you as an example of how this process works.
Why do you want to get out of the paycheck-to-paycheck hole? You don’t have to, after all. Most Americans, according to…
Read More: How to break out of the paycheck-to-paycheck cycle