Dos and Don’ts of Personal Finance: A Discussion Everyone Should Have

By Steve Kautz, former Maine mathematics teacher and personal finance expert.

The Scoop on the Blog

The subtitle of this blog is “Conversations in Personal Finance,” and that is exactly how I see it. Conversations, storytelling, talking, thinking, scratching, digging, crawling ─ whatever we can do to learn. I’m not here to offer myself as an expert, a know-it-all, or an already-wealthy person talking at you. I assure you I am not wealthy, I hope I won’t come off as a know-it-all, and although I have some knowledge and experience with many of the topics, I don’t think I am an expert. That I am is willing to lead discussions about finance, economics, money, and more.

35 and Broke. How Did That Happen?

Stage 1: Once upon a time, I was the youngest paper boy in the state of Connecticut. Yep, I was delivering papers at 5:30 a.m., alone, in the dark, when I was 8 years old. Now don’t get all retroactively concerned in an ‘I’m-going-to-call-child-services kind of way.’ It was a different time, a nice little blue collar town, a different world. I collected my route money, paid the bills, and saved money. I saved a few hundred bucks in a couple of years. I had a sweet bank account for a 10 year old. As a teenager, I ended up spending the money on my first stereo ─ thank you, Radio Shack!

Stage 2: I started working part-time jobs when I was 15, and, for the rest of high school, I was able to pay for some extra clothes, car insurance, movies, and plenty of quality time with a Space Invaders machine. I realize now that although I was working hard and paying my way, I had only become a consumer ─ I wasn’t saving.

Stage 3: The good part here is that I worked my way through college, paying most of my bills and tuition with little help (other than a place to live) from my folks. The bad part was while in college I got my first credit card (Sears, of course), and developed my ‘taste’ for credit. During the same time, I bought (financed) my first new car.

Stage 4: After college, I started making more money (let’s call it x amount), but started spending even more money (x + 15% or so). It was too easy. Sears card led to Penny’s card. Penny’s to Eddie Bauer and so on until I hit the big time and got my first Visa. Now, that’s the ticket to Consumptionville.

Stage 5: Wake up at 35 years old, no savings, no retirement account, no assets, some credit card and student loan debt still hanging around, and a C+/B- credit score.

An Unlikely Source of Education/Inspiration

Somewhere between Stages 4 and 5 I joined the Peace Corps. It was then that I started on my path toward financial literacy. It’s so weird (and at least a little embarrassing) to say this given that I had a Master’s Degree in Business Administration and Economics, but it was living as a Peace Corps Volunteer that taught me about money. I had to learn to live on almost nothing, and there really wasn’t much to buy anyway. At the time I was just doing what I had to do, doing my job as a volunteer. But when I got returned to the United States the contrast in lifestyles was overwhelming, and I started to realize that I was 35 and really, really broke.

Suddenly, I wanted to learn everything I could about money. That new knowledge, combined with my economics background, led to changes in my behavior, and today I have the treadmill set to a ridiculous speed trying to catch up on retirement savings, etc. As a math and economics teacher, I gradually found ways in which those topics connected to personal financial education, which led to starting financial literacy initiatives at my school. I attended local and national conferences on the topic, which led to speaking at conferences, which led me to this opportunity to blog for the Press Herald, and to continue to learn about this topic through my conversations with you.

Why?

I confess ─ I have multiple motives for my involvement in financial literacy. Of course, teaching folks to improve their own finances is important to me. When I was 15 ─ 20 ─ 25 ─ 30 years old those conversations weren’t really happening in a widespread, accessible way, and consumerism ate me up. I want to be part of the process of helping people defend themselves in our complicated economy. But, there is more. I see individual financial and economic literacy as the only real way that our country can work towards solving its financial problems. The way our politicians manage our money is, unfortunately, the same way that most Americans manage theirs. Our citizens live on payment plans, one paycheck to the next or worse (borrowing to live paycheck to paycheck), and that is also how the U.S. government operates. One giant payment plan. No savings. No concern for the future. No hard choices. So in my mind, if more of us can master the basic secret of personal finance (stay tuned, it’s coming up very soon), we might elect people who would do the same with the wealth of our nation. Pie in the sky? Maybe. But I haven’t given up and I hope you won’t either.

Click Away!

I hope you’ll spend a few minutes a week with me here in this space. I’ll be shooting for one post a week. There is certainly a lot to talk about.

Here’s That Secret…

Spend less than you make. Sounds easy, I know. But according to numbers from a 2016 FINRA Investor Education Foundation Report, almost two-thirds of Americans are spending equal to or more than their income. Let’s get after it and start Making Cents!

The views, information, or opinions expressed in this blog are solely those of the author and do not necessarily represent or reflect those of the Maine Jumpstart Coalition for Personal Financial Literacy.