Hey folks! I wanted to chat about the 50/30/20 rule as lots of people in the comments have discussed how it doesn’t fit their reality. I feel like I should have emphasised more that, like everything in the video, it’s is a starting point for a budget rather than a strict rule (if I could go back, I would have not called it a rule and talked more about how it helped me shape my budget). The cost of living has made things harder for everyone (especially rent!) & the book I based the section off was definitely written for the economy of 20 years ago. The reason I ended up including it is because I found it really helpful to know where to start - while I too can’t make the 50% work, I found having a structure to be really helpful as a starting point, of how to think about and structure a budget. I made the video for people like me who were confused and really stressed about money and the last thing I want is to contribute to the stress and confusion. I’m still learning as I go & I hope that this one section doesn’t detract from the overall messages! - Taha 💛 P.S. the scam investing bots are out in full force, I am doing my best to remove them!!
I truly recommend looking up 50/30/20 budgeting for Notion. I used one where I could tinker a bit in order to have the budget fit my financial situation. (e.g. Instead of 50/30/20, you could use the "formulas" to make the money be distributed by 60/30/10, or 30/50/20, or whatever.) As a warning, it can be tricky to use Notion, so try to use examples of the costs of what you would buy, and see if you can make it work on your end. I'm in my second semester of community college, but I use it for expenses outside of my tuition. Good luck!
Hi Taha! Sounds like it's a good opportunity to create a new video about "best strategy in times of crisis", when so many people are concerned by the crisis. 😊 Like an add-on to this video, but adjusted to reality (to the reality of the vast majority of people watching TH-cam)
I seriously wonder what TH-cam gets out of all these spam bots. Padded "engagement"? They're pretty obvious and consistent with their "comments"; it feels like the TH-cam algorithms intentionally ignores them for some reason.
I think you were pretty clear that it was a suggestion, not a hard and fast rule. "If you don't know where to start..." "...and maybe it doesn't work for you..." "'I've tried a budget before and they never work.' ... Common reasons budgets fail is that they ... don't reflect your reality." But I don't think people commenting about it are concerned about you framing it as a "rule". They're commenting on how out of touch it is to even suggest it as a suggestion (not a rule). The economy is so fucked that the 50/30/20 suggestion is only slightly better than suggesting "just pick yourself up by your bootstraps!" It sounds flippant, even as a suggestion. The idea of using X%/Y%/Z% for needs/wants/savings isn't a bad starting point for those who actually make enough money to cover more than their needs (which is far from everyone), but I think it's just the numbers themselves that are taking people aback.
I'm a teacher in the UK and I go for the 80/20/0 rule. 80% necessities (incl food), another 20% on food because my initial budget doesn't cover the cost of living increases, and the remaining 0% on future planning and saving. Bish, bash, bosh
Yes - prepare it all myself, and cook larger portions to reheat later on in the week. I even go to a local greengrocer to buy the exact quantities I need to cut down on food waste@@nnov_tech_chan7891
Taha and Grant O'Brian are two people who surprisingly reduce the amount of degrees of separation for anyone on the internet, I suppose it makes sense they know eachother
also, brian david gilbert I feel like you can really use him to shortcut across these seperation games he's in adventure time, starfield, adsfmovie fallout 76 and a bunch of podcasts and not to mention he was over at polygon for a while, has his own youtube channel and now I mention it, wasn't he on the ai learning episode of answer in progress?
You then need to make changes. If you can't afford to drive, you probably should find a way to make not driving work or get a roommate or several. There are always ways to spend less than you make.
@@MegaLokopoI use public transportation and have a roommate… I still spend 80% of my income on rent alone. And my rent isn’t even that much compared to what many people are paying! I’m extremely frugal and don’t really spend anything on wants
I’ve seen a few of these “learn about money” and “get out of debt” videos. They are all great at laying out the basics (especially this one.) But, I’m always disappointed that they don’t add something about the number of people in a community that can’t make more than they need to spend to survive. We always consider personal finance to be personal responsibility and never bridge the gap to community organizing to lobby for more housing and community goods to help people live within their personal means.
The one thing that has made a big difference in my life - cheap housing. Just look at how much money goes out of a families budget to the insane housing market these days, and you find a large part of the problem right there. When more then half of your income vanishes instantly it really is impossible for you to do the whole 'saving up' thing. I recognize how lucky I was to have friends and family that do the communal living thing, for it brought the cost of housing down a great deal for us all.
Yeah, every one of these videos should include in each of its points what kinds of policy to advocate for to make all this advice practical to follow. Interest rates aren't just a thing we have to accept as being "high" or "low", these are deliberately exploitative and predatory. The onus shouldn't be on the statistically less educated and less wealthy person to have the right moral fortitude and vigilance when it comes to a financial system designed and controlled by wealthy, educated elites.
I taught high school Econ in Missouri, and one-size-fits-all financial advice really isn't appropriate for kids from different socioeconomic classes. Some families spend 100% of their income on necessities, some are more prosperous but need to take care of extended family, others have a complex, integrated family fortune, etc. In the end I turned that into a teachable moment for the richer kids in the class: I gave them an assignment to plan the finances of a poor family. Sophisticated budgeting or investment techniques are useless when the cost of necessities is higher than the family income. They need to make hard choices like moving the family of 4 into a 1-bedroom apartment to save on rent or having the eldest son leave school to work a minimum-wage job.
Sophisticated financial maneuvering is even more important for broke families. The core concepts are the same. Always understand your options for increasing income, getting financing, the importance of liquidity, cutting expenses, and risk management. It may not be politically correct to have kids write out the unpleasant/ grey market stuff but it would definitely help improve outcomes.
Love the teachable moment on this - shows what the reality is for folks who don’t have a great deal of financial means and just how difficult it can be to get out of that situation.
@@FullLengthInterstates Broke is not the same as poor. Broke is a temporary financial situation. Poor is perpetual. There is a reason almost no one gets out of poverty and it's not because people are stupid. It's because having money allows you to make money, but only once you reach a threshold. You can see this in the uber wealthy. They make money doing nothing because the pool keeps aggregating due to whatever they are invested in. You can't invest at all if you don't have anything left over after basic necessities like rent, food and bills to exist with any measurement of a roof over your head, food in your stomach, clean enough water and some heating/electricity. People assume the pool is bigger than it is. You can't swim in a puddle. You don't have the option to increase your finances when you have to increase your spending in order to do so. Which is usually the case with going to school, moving or getting a mortgage. More than half the world is poor/lower class and stuck in this situation to one degree or another.
@@lovell8983 You can tell by the watermarks. Those images are not free. They are usually put in the image bank by the freelancers who hope to make money out of their hard work and use of their expensive equipment. I don't mean to s**t on the video though. I think it is a great video and we all need to hear the message.
@@damiadeniji No you're absolutely not allowed to use photos with watermarks when it is from Alamy for example. Which they did. I don't know about the meme stuff and it might be true but the photo from Alamy is stolen, period. Why the *** you think the watermarks are there? To be pretty?
basics aside, something I never see talked about is how to actually *spend* money effectively. I grew up poor, so when I became an adult and started working I would just save as much money as possible, minimizing monthly expenses and *never* making big purchases. Now after 4 years of work I'm at a point where the cost-benefit analysis is quite obviously pointing me towards actually buying stuff. I need a new phone, new pc, kitchen appliances, etc. Not buying those things is costing me significantly more time and stress than is worth it. It genuinely feels so alien to be spending money now, almost like some kind of self betrayal.
A properly set up zero based budget is a good way to give yourself permission to spend money while knowing you are still meeting needs and savings targets. You take all the money you currently have and give every dollar a job based on your needs, wants and priorities. I personally use YNAB for this, but spreadsheet or pencil and paper should work too. If you have enough earmarked to any given item to buy it then you don't need to feel guilty making the purchase up to the budgeted amount.
I swung another way. I grew up with not much money, but we did have food on the table everytime. Anyways, when I got more money I suddenly started spending. I got ADDICTED to spending! And I just never learned what to spend on, what was worth it. So I bought bad stuff and also just stuff I didn't need. And if I couldn't find anything I may need now I started thinking about stuff I needed later when living on my own. FINALLY I have now (a few months ago) really realised that this is bad, after like 5-6 years. So now I have stopped spending on random garbage and am only left with the painful task of selling/throwing away stuff to get my home cleaner and emptier. PLEASE don't fall into this trap either.
I also have trouble spending money. I have this idea in my head that people Will judge me based on my purchases, so getting the expensive butter meant I wasn't allowed to complain about not having money... I'm not going to give advice on how to be better at spending, but the one thing I will advise is separating the spending (not just writing out numbers on a budget sheet - I HATE budgets), but by literally having a separate account for necessary bills and moving my monthly amount into it. What's left in my "spending" account I know I can spend free and clear, no strings attached.
@@summertime69 Great advice! I'm in the same camp as the two of you, and I like to spend on the things that bring me the biggest utility or value in life, and spend conservatively on the rest. Taking a new phone as an example, most people use their phones for over 30 minutes a day (at a very conservative estimate). Over the course of a year, that comes out to 180 hours on the phone, and i think its fine to spend on one if your phone isn't in working order. I also enjoy dining out and treat myself to dinner with family a few times a week because it's something I greatly. To feel comfortable spending on dining out, I spend very little on clothes, electronics and other things in the wants category.
10:09 I feel like everyone needing a main job AND a side hustle to get by is a frustrating symptom of the growing difficulty of covering basic expenses, driven by stagnant wages and increasing inflation (particularly in housing and food). For our parents' and grandparents' generations it was so easy to get by on a median income, but now it feels like you need a main job AND 1-2 side hustles just to get by.
Agreed. Teachers often need side hustles and the more normal this becomes, the more administration and governments feel less pressure to change the flow.
@@a_person5668 Why is it so hard for you to get another job that pays more? What prevents you from lowering your expenses? Do you drive a car? I don't, I talked my boss into driving me to and from work as a condition of accepting the job offer. Driving is optional no matter where you live.
Only 50% towards necessities? Hon, I'm Canadian: 50% of our money just goes to RENT. This does not even include food, utilities, clothing, anything other than rent. It's MADDENING how high our cost of living is. I'm 33 years old and I still live with my parents for this reason.
Why renting? Why don't you get a mortgage to buy a house or an apartment of your own? Renting will be forever, while mortgage only lasts for some fixed amount of time.
@@creounityat least here in the western US, housing is beyond unaffordable to buy. And it's very difficult to save for a down payment when you're spending half your income just on rent.
This is a small part of the video, but I'd push back at the idea at 5:47 that wealthy parents pass on good financial advice to their children and poor parents pass on bad advice. Being rich doesn't necessarily mean you're good with money or having financial literacy conversations; you may just have inherited a ton of money. Likewise, poor parents often talk much more about money to their kids, and poor kids likely grow up with a much more clear idea of how far a dollar goes (or doesn't). People aren't in poverty because they have bad financial literacy (at least in the vast majority of cases). They're in poverty because they don't make enough money, and it's impossible to save money when you don't make enough to cover the necessities.
True so far as it goes, and there are plenty of stupid people with wealthy parents - but if you've got wealthy parents and friends, you can easily find out where to hire a competent money manager. It's much, much easier to stay comfortable once you are comfortable than to pull yourself out of a hole.
Exactly, very well put. What is also important to now about richer families is that they have connections and a network that places the children well off for the future. That isn't something that will change from a change of curriculum either, although I do like the idea of teaching more responsibility about spending.
yes, but the majority of people who are good with money end up making/having a good amount of it. then they have kids and the kids see how their parents act and learn their habits. all young kids are doing is looking at what the people around them are doing and learning from that. and getting money is the easy part, keeping it is the hard part. most wealthy, or even just well-off people don't waste money, and their kids see that. the exception does not make the rule
I disagree, poverty is a complex issue. Sure there are exceptions of poor kids that do great at school but generally children of wealthy parents, say children of lawyers, doctors, etc. do much better because their parents, even if not explicitely, teach them about the importance of education. On the other hand, poorer families tend to not value education as much. Children of poorer families tend to be more problematic, rebelious and generally do worse. Even with iq studies in poorer zones within the same country, get worse results than the richer zones. Does having money somehow make you smarter? Of course not, the influence children get from their enviroment truly is important. At the same time, it is absolutely the case that this is not the full story. Having money is a tremendous advantage. As the saying goes, being poor is expensive. I just wanted to give the nuance that poverty is, in my opinion, a complex issue.
There are some poor families that are honest with their kids about money, I've seen also some which went out of their way for the kids not to feel excluded at school, so they either had to take another job so the clothes wouldn't be bought used and their cell phone was paid in time, or they would be slowly drowning in debt. This gig taking to make money for what seemed like necessities was why they have no time to talk about money to their kids, so the child is wonderfully oblivious about what's the fuss about money. Fortunately, there are a lot of educational materials out there nowadays, so most of my friends who lived like that have pulled by their bootstraps or whatever - but I'm well aware that I lost contact with some people and I don't remember anyone dropping out of my school, and that's probably where my bias comes from.
I think an additional part of the problem about financial education, is that the age that we are taught is counterproductive. Learning to manage finances when you yourself don't have finances means you're trying to learn about it without meaningful context or application. And unlike Maths, English, or other classes that iterate year over year hardly giving you time to forget in the meantime, my financial education was a single semester a solid couple years before I would graduate high-school, gain any sort of control of my finances, and try and apply knowledge that unfortunately is two years forgotten. I would rather see it become easier for fledgling adults to find access to high quality resources when the knowledge has meaningful impact on the finances that are now their own, than be taught to a child who has yet to see any meaningful way to apply what they've learned. Well, maybe both is better than one or the other.
Not really. Minimum age to work tends to be 14 unless you are in outliers like New Jersey or Illinois. Two years before graduating is a perfect time to have it included.
You hit the nail on the head. I suspect the biggest reason why people don't remember the financial literacy being taught in schools (as mentioned in the video) isn't just that it's inserted oddly, but also that high schoolers have no need for this information for several years, and as a result are unlikely to pay attention or be invested. How much do most people really remember about most high school subjects? How many people could do some basic trig formulas or calculate the velocity of a paper plane?
@@crymmt6329 Maybe kids should respect school more? I don't understand why people like to blame schools for not making them remember things, and not making things interesting for them to remember. Guess what? Most things aren't interesting. Most things are just boring tedious. You just have to suck it up, learn it, and remember it. Even if you don't know why yet. They teach you basic algebra for a reason. Don't know why? Who cares. Just bloody learn it.
It is a bit too complicated to boil it down so simply, but those that argue for economic education are not talking about a one-time deal, but instead a core, lasting subject that follows and evolves with a student based off their expected understanding of finances. It isnt "one semester 2 years before graduation" or "buried in the main maths courses", but instead "elementary kids learn what money is and the purely mathematical value (a penny is 1 cent), which slowly evolves into spending for luxury since that is their only concern. Middle school then teaches costs and needs, but not full on budgeting (ending at "make sure you have more money than you spend"). High school then has the final task of teaching budgets, debt, socioeconomic conditions, inflation and how to judge what is "normal" or "good" debt (including the ability to call out unreasonable 'inflation' and companies trying to use it as an excuse for price gouging)." Instead, we get a system that only prepares students for higher education and banks off their planned economic ignorance to push unreasonable student loan debts onto them. Resources for recent high school and college grads is great, but it still takes active searching when school leaves them in a place where they have no idea where to look to find them. Heck, when the bigger scale of economic misfortune is the norm for the conversations about how new adults in this day and age cant afford to live, a case could be made that a need for an early economic education into the concept of saving early so their "wealth" can build while they have no need of it would go a long way into ensuring an immediate "emergency fund" when the kid finally needs to learn how adulting works without a system in place to specifically teach them; interest might not keep up with inflation, but at least the kid isnt starting from literally $0 to handle the transition to adulthood and adult responsibilities. Minimum work ages are the reason it is taught when it is, but not every student "takes advantage of" or is "forced into" that situation, leaving those who value their childhood and lack of responsibilities that come with it in the void of forgetting the lessons, assuming they are not already outdated by graduation (especially with an additional 4-6 years of college for a "good" degree depending on their willingness to cram the requirements into the 4 year minimum and feasibility of coasting off other financial aid).
We were required to take a 1 semester econ ed class in my high school. I know they showed us W-2s and tax forms at least once but since it wasn't relevant to me yet, I didn't retain any info about it for when it was. The only thing I actually learned in that class was that student loans don't disappear if you die bc that was kinda shocking.
I think it comes out of your estate (any money, possessions, property, investments etc that you own) before anyone can inherit your stuff? Or the debt is passed onto whoever gets your stuff? I could be wrong though. It does make me wonder though, if you bought a house with a mortgage, what happens to that loan if you pass away? Is a new mortgage negotiated with whoever inherits the house based on what's still owed and that person's credit then? Is credit card debt forgiven if you die? All I remember is something about other debts not sticking around in the same way that student loan debt does. I guess because you gained knowledge from what you paid, which is not something that another person can inherit in the same way as possessions. But I'm not actually sure how any of it works! If someone knows, please comment it!
@@Spi314i did a business minor in college, so i’m definitely not the most qualified to speak on this, but i think it depends on the type of debt you leave behind. ex: you are a single person with no kids or spouse and you die and your house has a loan. when nobody to takes it over, it’s the bank’s house. when my parents pass, their house goes 50% to me and 50% to my sister. i plan to buy my sister out of her portion, so basically i take on the remaining balance of their loan (they’ve refinanced a number of times, so i definitely anticipate them leaving behind at least some portion of a loan). credit cards are a little different because there’s not an asset the loaner can take like a house. if i die, basically they’ll take money from my estate. if i die after inheriting my parent’s house or cars and those are my only assets, basically they can take those assets. if i were to die with zero assets, it can’t be passed on to people who aren’t cardholders or consigners. i don’t think that’s very common, though. for example, i’m a cardholder of one of my mom’s credit cards. if she died in debt on that card, i’d be responsible for it. luckily, though, my mom makes good financial decisions and i don’t anticipate her passing anytime soon. federal student loans are discharged if you die. private ones may have other rules. (this is US, obviously) another thing to consider is life insurance. this is part of the reason i have it. i get a certain amount for free through my job with the idea that it could theoretically help with any potential outstanding balances i have if i were to die. i don’t have any kids or anything, but a little bit in life insurance can mean that my parents or sister won’t become responsible for paying off debts like a car loan, or being burdened with having to sell my car shortly after my death to cover (some of) the costs. my parents have gone to extensive lengths to set up trusts to make sure my sister and i are financially taken care of in the event they pass sooner than expected, and i plan to do the same if i ever have kids.
Student loan debt is also one of the only (if not the only) types of debt that can't be dealt with through bankruptcy. If someone files for bankruptcy because they don't have enough money to pay their debts, those will be dealt with and you won't have to deal with them anymore but student loans are still there no matter how many times you file for bankruptcy
I’m in middle school and we did this thing called finance park where we were given a person with a job salary possibly a family and we had to make a budget and then spend our money on things we needed and at the end our tablets calculated how our financial situation would be in 10 years and we also did a whole unit on finance in world studies so that something.
Unfortunately, that is often only done once. I'm in early grad school currently and I did a similar exercise back in high school. But to be honest, I don't remember much of it because I was lucky enough to have parents who have worked their butts off to be financially stable. It really needs to be a whole unit, if not a whole class, that is mandatory in school to be useful.
Did the same thing in middle school and my highschool had a required personal finance class. At the end of the day it all boils down to "save as much as you can, and don't spend too much on 'fun' things" but that's just common knowledge. They don't factor in emergencies, they don't consider how much more expensive it is just to be alive today than it was when those courses were first made, especially when compared to stagnant income. The system simply needs to be reworked
@@calebhughes975 the solution is to make more money and be very very cheap. then either pay of debt or invest. if the investment will earn more than the interest you are paying, do that. if the interest is lets say 10%, and you would make 8% investing, pay the loans first. once you are debt free, just invest. and also have 3-6 months of expenses in a high yield saving account as an emergency fund
We did that at my school too, it was neat but almost none of it stuck. Also, the workers very clearly didn’t want to deal with my school so they didn’t put in too much effort which didn’t help
The feeling of seeing Adam Conover and now Grant O’Brian while directly referencing a dropout show makes me so happy, I love seeing my favourite things cross over
I teach a personal finance course in the United States. North Carolina Public Schools requires an entire course for every high schooler. To be fair to everyone commenting here: this was passed two years ago. I got specialized training to teach it, and half the course (9 weeks) is budgeting (including the 20-30-50 plan and emergency funds), investing, taxes, credit formation, and loan management. I pull a lot from Next Generation Personal Finance, which is a New York based curriculum that has a great youtube channel.
The 50/30/20 rule is a great idea or guideline to spending, but it's becoming increasingly unrealistic, not just in the US. Necessities by now usually exceed 50% of peoples incomes, quite possibly regardless of their income bracket. So, those extra percentages have to come from somewhere, which a) may lead to a lower quality of life or b) makes saving money for emergency difficult or even impossible. Edit just to say that I really enjoyed this video, and it certainly is a great starting point to learning budgeting and what to look out for. You're doing the Internet a service!
Was almost all the way through the video before I realized this went up today. My debt has been on my mind a lot lately. Currently between jobs for... Complicated reasons that were beyond my control. That said: even before I lost said job I was avoiding thinking about my debt. I paid what I could, but I didn't have a plan. I've got about a dozen screenshots from this video pasted into a private Discord channel and I'm thinking about my budget. I know that I can tackle this. I know I need to forgive my younger self for putting me where I'm at with debt, stop thinking about the past, and start thinking about where I'm going next. This... Yep. It's what I needed to see today. Impeccable timing. And thank you.
This video has good financial knowledge, but it's not exactly applicable to everyone. I live in the U.S., and if you can be in a position of spending only 50% of your income on necessities while living by yourself, that is a huge accomplishment. Oh, and I remember budgeting being taught in my JROTC class in highschool (it wasn't taught well). My dad also had me read a book on managing money, which is where I first learned some of the stuff mentioned here.
@@durdleduc8520in the US, at least, median rents in every city are roughly 50% of median income or far higher. This means it is literally impossible for large swaths of the population to keep necessary expenses under 50% of their income. Not just difficult. Not just not hustling hard enough. Literally impossible. Wages are too low, rents are too high, and housing is too scarce.
Keep in mind, this too is a falsehood of housing being scarce. There's a surplus of living space, but since it's kept empty by it's owners for lack of profitability in one way or another.
Most of us spend 100% of our income on necessities and then are so burned out from late stage capitalism and working 60 hour weeks that we spend money we don’t have on credit cards on stuff to provide any little bit of dopamine so we can stay just miserable enough to not off ourselves and keep contributing to the late stage capitalism machine.
@@lessefrostit’s not a falsehood. The type of housing you are describing is inaccessible. The housing that is affordable and available is LIMITED and that is the truth
Something that really baffled me about this video was, that it never mentioned inflation much. If you Invest your money and you get a return of 4% each year, and inflation is at 4%. At the end of your career you will have the same purchasing power as at the start. This is something very important to understand! For an investment to be worthwhile it needs to beat inflation most of the time. But I'm also not in the demographic of this video, I do reasonable well financially and I am working on a degree in business and economics with a focus on finance.
I similarly think that I am not part of the target audience. I like with my parents so I should probably be saving much more than 20% as my necessities are lower cost
Even in your case, though, having a return of 4% is still better than having a 0% return, or spending all the money. You basically trade current money with future money. You also add money to that fund every single month, so at the end of it you have more security than if you spent the money.
@@Serena-or7sl Thats partially true, however this is not the point I want to make. there're a lot of bad/expansive financial products on the market which will tell you how you will make 5% profit per year after fees. However after years you will check in and see that you pretty much gained nothing. being aware of inflation will make you choose better funds to invest into. You're only protecting your purchasing power and at that point its pretty much irrelevant if you spend your money today or tomorrow from an economic perspektive.
This is fine advice for folks who are earning enough money to start with. Few people have control of their overhead. When your income potential and options are limited, budgeting is useless.
The problem about cutting out credit cards entirely is, in the US at least, using a credit card *and paying it off* is very important to building up your credit history and credit rating, which is used in a broad range of contexts. Employers use it in background checks, landlords may use it to vet renters, and of course when it comes time to take out a mortgage or a car loan (hopefully a small one), a good credit rating might be the difference-maker in getting the loan approved (and it could save you a lot of money on interest too).
The solution is easy - don't actually use your credit card to buy things unless you can pay it off right away (or weeks before whenever the interest kicks in). ie, use your credit card as a bank card. Don't use it to actually borrow money.
50% on necessities is a pipe dream. At minimum, just with groceries, rent / bills in general, and gas, 70% of my budget _must_ go to necessities. That’s why they’re called necessities. I then have about $825 to spend or save. That book is incredibly outdated.
Glad to hear 100% of your budget isn’t going to necessities and then you get to decide whether you risk the electric or phone getting shut off this month! At least you have SOME extra! 😮💨
It's easy to say "cut down on spending" but no one really talks about what to do when your bills take up everything. I'd love to see someone who had real advice on how to get out of that kind of situation.
But there's nothing you can do except cut down on spending, even if it is your bills. You just have to find a way of cutting down your bills. There's no way around it. There's no trick to it. If you're doing to drastically cutting down your utilities use day-to-day, then you're f***ed.
Paying off the smallest amount first does have one big advantage that's not just how you feel. It clears a debt which reduces your minimum payments. If you're the kind of person who doesn't have a lot of wiggle room in the budget for emergencies that may be worth paying more long term if it means a short term emergency doesn't cause you to miss minimum payments or borrow more to meet them.
So hurtle toward maxing out all the credit cards faster to have “savings”? Yeah, that makes no sense. My cards are paid off now, BTW. Finally have enough to live on. In my *40’s*! 🤦♀️
Student debt in the US is so messed up, man. I had sizable student loan debt when I quit uni in the Netherlands but with a decent job I was able to pay it off in 6 years because there was practically no interest on it. High school should at least show for different majors / professions something like "this is how much debt you'll likely be in when you graduate; this is how much you're likely to earn". Plus maybe some reasonable numbers on living expenses so you have _some_ idea. _Then_ you can say the 50-30-20 thing.
More likely you spend 100% of your money and are still neglecting very real needs like fresh, nutritious food, medical check-ups, dental check-ups, that oil change the car needs, that overdue electric bill. Everything’s super easy if even 90% of your income covers what you really need to keep being functional and productive! 🤦♀️
I hate the attitude of don't spend $5 on coffee every day, that's the thing holding you back from being successful in life. Yes, buying $5 coffee everyday does cost a little less than $2000 a year, but the fact of the matter is most people don't buy fancy, mocha frappe whatevers everyday. That's like saying, "going to an ice cream parlor every day costs a lot of money, why would you do such a silly thing?" Of course people aren't doing that, that's a crazy thing to assume that people buy that everyday. What is strangling the people of today's wallets is the stupid costs of being alive, spending money on housing, food, utilities, and transport. I live in a pretty suburban area and it costs around $2000 a month just to exist. That's an insane figure for just being alive with no fancy coffee, accommodations, eating out, or grand vacations every other year. I shouldn't need to make $30,000 a year to just be alive, especially when most jobs in my area offer less than that starting out.
And this is why I refuse to go to America. Europe might not be a paradise but it's at least not this hellish and scary. I hope things get better and people realize the power they have and changes are made to improve the situation.
In the USA, home ec and other such classes used to be much more prevalent. Generally speaking, school districts started lowering funding for those in order to increase funding for classes related to standardized tests and college. I personally only remember doing money stuff in math classes, but that was basically just using USD as a unit and not working on personal budget skills etc. As another commenter put it, schools are here nowadays to teach us how to be "good workers" who are compliant (at the very least, see the normalization of horrible schedules and heavy workloads). Shit sucks Oh yeah, also the 50% necessities doesn't really work for most people, at least in the USA. We don't make enough money to spend that little on necessities. Love to see Grant here! Maybe Adam can join too
What is this nowadays with this Garbage About "school didn’t teach me to be a grown-up" 😭. Schools have never been there to teach you how to live as a responsible adult. They have always been there to teach you how to read, write do mathematics, science, history, etc. any home Ec classes that I ever recall having were basic things about sewing and cooking and never included how to manage your money. That’s what you have parents for. They’re supposed to raise you to be a responsible adult. If your parents failed you I’m sorry, but that really isn’t the school’s fault. I was raised and taught how to cook, clean, do laundry, balance a checkbook, and the fact that you shouldn’t spend more than you earn really wasn’t mentioned because it was kind of obvious. Everything we ever wanted wasn’t simply given to us we had jobs and saved for special things that we wanted. It was all part of being brought up to be responsible adults.
I was at first shocked to hear these skills were not taught everywhere. I come from a rural town in Kansas, and no courage isn't my neighbor, but I do serve him coffee on the weekends, anyway, my school taught those classes, financial literacy, home economics, entrepeneurship, on top of the stem classes, in fact they werent just electives, they were core classes you had to have. We were even taught government, beyond just how to vote, and into politics, what everything meant, how the system worked (to an extent), we were taught geography. To this, it was shocking hear how we didnt see these classes everywhere, we were not a rich town, hell, most people in my school had to be on lunch programs, but somehow we taught that stuff and I am thankful. I wish this was more previlant, I am glad we are starting to get there, but man is the road a long one ahead. As to why, the U.S educational system we know came about in the 50's as a response to the new baby boom generation and was geared to prepare the new generations to become good in the work environment of the time, 9-5, M-F work week, do what your told, regimented schedule, even the fact you don't talk to co workers was there to prepare people to the life of a factory worker and more. It stuck sadly because people didn't want to change, its a normal human psychology that we dont want to change how things are because that leads to vulnerability, the thought we have to face the unknown almost. This leads to a mindset of "I learned this way, my kids can learn this way too." when in reality, not only is that not ideal now, it wasnt even ideal back then, and we see that now, but those people still are in power so here we are fighting this fight.
@@pjschmid2251 Thank you! School isn't about raising kids. It's about giving them critical thinking skills and knowledge that they can add on to as they grow.
simple solution if you arent making enough money: make more money. there are hundreds of ways to do this on the internet, and u can learn for free and start for cheap. the best way to make money is employ yourself
Balancing a checkbook is NOT taken care of by your bank. Your bank will process payments in the order they are received, and most businesses bill immediately because they want their money, but it is still absolutely the responsibility of the individual to know what they’re spending and if they have outstanding payments that haven’t cleared yet. I know so many people who find themselves suddenly overdrawn because they see $20 in their back account, spend the money, and then some charge from the day before, or a preordered product from months ago, causes them to become overdrawn. Also, doing a monthly reconciliation is a fantastic opportunity to see what you’re spending money on, and if your spending habits are in line with your personal properties. One of the biggest difficulties with teaching about money in school is how different the money situation can be between students. At my high school there were some students who were given $1000 from their parents to experiment with the stock market, and students whose parents were taking payday loans to pay rent. What can a teacher teach in class that is helpful to both of these students?
Yeah but what I'm assuming you're unaware of is that some banks actually stack the payment processes so that they can charge you late fees. My roommate used to get hit with late fees literally every week (they're paid weekly) when they had Woodforest National Bank but now that they closed that account and now have one at a community bank, they haven't seen a late fee since ...
@@ludwig2345 Balancing a checkbook isn't about having a checkbook, strangely enough. Like, technically it would more accurately be called bank reconciliation, but nobody really calls it that. The idea is if you swipe your card, you should know that you have spent that money, and when you check your bank account and it says you have $50, you should know whether you actually have that $50, or you have $10, because the $40 of gas you spent two days ago hasn't come out of the account yet.
@@alanboyle6751 I just explained to another comment, so I won't do the whole thing again, but the point is about knowing which transactions you have already made have cleared your bank yet or not. It doesn't matter whether that transaction was made with a check or an ATM card.
This is why I will always advocate for going to community college and state colleges. Please do not be taken in by the lies of private universities. They are nice, yes, but they are not necessary by any means. The piece of paper you're given at the end qualifies you for the same jobs whether it comes from Podunkville Community College or Ivyleague University. The difference is how you use it and how many good connections you make and opportunities you take. Save your money and invest it in a retirement plan or something.
For the most part, I wholeheartedly agree with what you're saying. State/community college rules, and more people should be taking advantage of that. I will also say, however, it is still worth applying to some private schools - it's possible to get very need-based financial aid from certain ones. I was lucky enough to get into a private school in Boston and the aid I got covered 95% of tuition, making it cheaper for me in the end compared to a state school. Just something to think about
it depends on which field if you are getting the same jobs. and also the job isnt the only thing you are gaining from university. often the professors have done something big and have lots of experience. you dont want JUST textbook knowledge. also if you are going to school with super rich people you will make connections
Right, a lot of the benefits of higher education come outside the classroom. In particular the spontaneous connections you naturally form in and in between classes, which a more elite school has a higher concentration of peers and contacts with more access to opportunities. Sure you could be just a technically competent having learned everything through random Indian instructors on TH-cam, but that "piece of paper" plays into the biases of gatekeepers like business owners and HR folks looking for something that makes you uniquely attractive out of probably thousands of competitors.
I'm from a pair of towns with 4 universities (each town has 2). 1 private liberal arts school 1 public (SUNY) liberal arts school 1 private tech/stem/buisness school And 1 public (SUNY) tech school. I'm sorry but the SUNY schools just aren't the same as the private schools. Sure the "piece of paper" might have the same title on it, but everyone (hiring managers and the gate keepers to employment) knows which school has better teachers, harder curriculums, and more in-depth coverage of topics. This isn't a slam against public schools like the SUNY system in New York, but the fact is they qualify you for very different positions than the private universities. One will get you a job as a lineman or other "technician", and the other makes you an Engineer designing the system who knows 8 layers deeper theory and has been tortured with second order differential equations until you intuitively understand the topic.
Others are making the point that you are more likely to get a better-paying job with the private school degree. I’d counter this is a huge risk; no guarantees of that, plus said “well-paid” job might be in NYC or LA where the cost of living will put you into de facto poverty. My advice to my son is to get a cheap 2-year degree at the community college and see if he can get an entry-level job with that; a lot of employers will help pay towards a 4-year or master’s degree so a young, bright (white, straight, non-disabled; yes, these all sadly make a difference, but my son lucked into every privilege except generational wealth) man can move up in the company.
This video couldn't come at a better time for me. I just graduated, I'm months away from getting my title and I'm about to have my first job next year. I live in Mexico so my conditions are different and I don't have to think about rent but the idea of using money well, knowing how much to use, how much to save and how much I can actually enjoy is still haunting. Not even life here is cheaper or easier
I was lucky enough to have a Social Studies teacher who taught us how to budget instead of having us write an essay because he thought it would be more useful to high school seniors than an essay - we had to find a job - if the per hour was not listed we had to call - then we had to find an apartment within out means that was less than a third of our pay so we could have room for utilities - which we were also required to call to find out how much an apartment of the size listed would run per month. He showed us how to budget so we had enough money left over so we could put some away every month. I'm grateful to him.
I really like it because it feels like a real show created from their stress and desperation to help themselves. It's very sad but they are using their knowledge and resources to help themselves at the same time making content. We just live in a sad time where student loan debt is content despite the stress they actually have.
THANK YOU! I run a VERY small high school in the US and as a community we decided that our students needed more personal finance literacy, but as teachers we have almost NO training on how to teach it! This is a great jumping off point.
My biggest financial issue isn’t that I don’t know how to handle money, it’s that I simply don’t have enough of it to cover even just basic needs, and have no way of getting more. I’m disabled and can’t work, so I’m on SSI, which has a maximum of $943 for a single person but hardly anyone gets the maximum about (I don’t) so I’m expected to live off a few hundred dollars a month, forever.
To be fair, these types of advice are for mostly for the general audience (who tend to be able bodied but feel lost about how to handle their money). For your situation you'll be better off looking for content that specifically covers it (rather than general advice which doesn't apply) or trying to talk to organizations in your country who work with disabled people and can advise you about your situation.
@@lilowhitney8614 just sharing my experience 🙂 The reason I mentioned it is because I feel like a lot of financial advice is operating on people actually having enough money to begin with, and while the disability part is unique to me, this type of financial struggle is becoming more of a problem. It’s definitely good basic advice and a good video, not discounting that at all, just trying to share another point of view that it’s not always that simple. And also to hopefully raise more awareness about SSI as a lot of people don’t know and are surprised by it
If you've been on disability for awhile, you can look into things like Medicare and their supplements or advantage plans to help cover medical, dental, and eye care. There are also many programs that offer extra help like Rx plans, necessity spending cards, food stamps, rent and utilities assistance, etc. If you're able, I'd reach out to an insurance agent that specifically specializes in that sort of area. I do it for a living and do my best to take care of everyone since my dad is also disabled and the disabled community is very underserved
In grade school math class, we played a game where every one had 10K (simulated) to invest in stocks for a month. Everyone loss money except the dude that didn't buy and kept everything in cash.
first of all, the more risk you are taking on, the more reward. so if you do some less risky things you have less chance of losing money. also, you need to have diversity. investing in 100 okay things is better than investing in one bad thing and one good thing. finally, you are going to lose money, that doesnt mean you should give up. you should invest 1k, if you lose it invest another 1k, then keep going gradually increasing the money invested
I did the same thing in high school and I ended positive. Don't remember how much, though. I didn't know about index funds back then and just chose companies I knew about. Grade school seems pretty early for that stuff, though. I don't imagine kids that age making great decisions without being given specific advice.
Thanks so much for this video! I never knew how to spend money, just save and let it sit, like you used to. And then when I got more as I got a job I couldn't stop spending!!! It's a hard to find emotional balance, but luckily budgeting and math can help, thanks for reminding me of that.
Something that I noticed you didn't cover, but I absolutely know messes people up is the "recurring expenses no money" problem, where you signup for something on a yearly basis or every N months. Very often people treat this as "oh shit I've a €80 bill for my amazon prime this month!! I don't have it!?!?" The solution is to "amortise this cost", this basically means dividing the total price by the number of months that the cost recurs in. E.g., Amazon Prime is yearly, so you can have a "bills" account where every month you put in €6,70, and then when that bill comes round, you then have that money! It removes a lot of irregular stress around money. In my case, that's basically my budget: all my recurring expenses & how often they recur, both in original currency and local (e.g., domain names are often in USD and exchange rates can mess with you)
Yeah, living in poverty really drives home how few people in society really care if you’re housed and healthy or not. Gotta have those people dying on the streets to keep the wage slaves too scared to cause trouble, after all! 😒
There are two sides to the equation - how much you spend and how much you earn. You can either decrease your spending, or increase your earnings. If you can't do either, yeah, you're pretty much f***ed. There is no magical advice.
"Never believe a single source, consider lots of different viewpoints and a consensus will emerge". That is just a fantastic lesson for many facets of life.
Can you do a video on what school didn't teach you on health care? How to find the best healthcare provider? When should you decline a medical procedure and look for a specialist?
I was taught a lot about money growing up, including in school, but the kinds of things were not the most actionable or sensible ... Like I was taught about making a budget, but not prioritization and getting a sense of my individual values.
We didn't just get taught about money in school, we even visited a local bank branch in primary school and a national bank HQ in high school. At the local bank, I was impressed by the brand-new building's pneumatic tube system. After visiting the national bank HQ in Amsterdam, we went to a café, and I remember listening to a former sailor telling wild stories about his life. In other words, these lessons are forgotten because teenagers aren't interested in learning financial responsibility - even less than factoids about the Queen.
Regarding the strategies at 17:52 I’ve been using the second option. It’s incredibly satisfying to eat away at the smallest loan and snowball that momentum
For anyone living comfortably, living with their parents, a little younger, or just not living in America, Johnny Harris made a very eye-opening video about what it's like to live at different levels of income, and now I can't help but think of the 50/30/20 thing as a luxury thousands of people can't really afford.
We aren't comfortable planning our financial futures because we don't feel like we have one to look forward to. All we can do is our best. That doesn't provide opportunity for retirement though. My focus is on making sure I have enough of a buffer to not end up homeless in any foreseeable situation. That leaves no opportunity for me to even get the continuing education that I need to go for my actual career goals. They're society benefiting career goals, not financially benefiting ones. So loans would just tank my entire life and increase the destitution risk rather than decrease it.
I used to stress about money, and I'd scrutinize my spending trying to make sure I was still saving money as well as getting my needs met, often seeing that I spent everything I earned or close to it, and then I started making more money and realized that life and finances are much MUCH less stressful when you actually make enough money. Learn about budgeting all you want, but the problem is society isn't supporting a large chunk of our population, and no amount of penny-pinching changes that. Remember that in the next election cycle.
Yep; when my husband died last year, my costs went down but the amount my family got from social security (he had been on disability prior to his death) went UP! So, yeah, I can pay my bills much more easily now, go figure… this makes me very uneasy, as many people who end themselves “believe” they are a financial burden to their family… that may often not just be a “belief”… 😬
Taha, big kudos to the actually hilarious way you scripted and edited this video. I feel like you've stepped up your game, but the way a kid tries to step up as many steps in one stride as possible to beat their older siblings to the top. In any case, wanted to point out it's noticed, it's appreciated, and I can't wait to see more of this wonderfully dryly chaotic energy! I love how each presenter on this channel is allowed to have their own unique video style that they can make their own ❤
In my high school, we had a semester of a class called "Consumers Education" that delved a bit into personal finance, the only rough part was that it was trying to get 14-year-olds to take insurance premiums and blue chip stocks seriously
I’m so glad you promoted Total Forgiveness, it’s one of one of my favorite shows and it’s such an important point that it touches on. Everyone watch it, get a trial of Dropout and watch all of it, it’s awesome.
This is why i love you guys! What a great helpful introduction to clear our heads and give us some sort of "north" as to what to do. Everyone around me says stuff like "you should know that" and never bother to explain things, this video literally comes to me at a perfect timing as i just graduated, got a job and have realized that I'm constantly stressed with anything money related because i don't know what to do when i have it, when i dont, and when i need it.
There are a lot of things related to personal finance that we learn in school. Even something like the difference between exponential growth and linear growth is something that's often taught using money in its examples. That can be an important understanding to have when it comes to investing, but most people forget about it after their exams, because they're just not interested in it enough to retain the information.
The fun fact with debt, is that sometimes it's better to take debt even if you have the money, because you can use the money to make a bigger interest than the interest of the debt you would take.
@@guyman1570 That's not true. Debts like student loans or mortgage will not necessarily cost you more. It's a more complicated and neuanced approach to investing and should only be exercised if you know exactly what you are doing. This will not always be true. Also these kind of things are generally more accessible to the rich, which usually have a lot of debt.
I agree. As an american i too wasn't properly taught about money. Instead i felt like they focused way too much on paper writing, obscure history, and facts about the queen.
The thing about finances is that they're full of contradictions, like don't use credit cards, but you can't get a place to live without a credit history, so you have to use credit cards. 50% for needs? well, your rent is 200% of what your job pays so you need to work 2 full time jobs just for that. Your investment needs to pay off in 20 to 30 years, but the company you work for wants to see returns every quarter or else you lose your job, your wages stagnate, or you work more for less. It just doesn't work out, unless you get lucky. And here is where everyone says you need bootstraps and not realize what they are saying is a contradiction to many others' lived experience.
One thing that I am really grateful for after growing up in Utah is that this state requires everyone to take a Financial Literacy class in High School. I feel it was inadequate but it did give me some basics with regard to keeping a budget.
"the financial education you received in school was probably outdated, so let's fix that! you should be spending 50% of your income on necessities" yeah chief that was already outdated 15 years ago lol
I get what you're trying to do here Taha, but you fall into the trap that everyone says when talking about good money habits, and that would be: "don't be poor." The federal minimum wage in the US is $7.25/hr. So if you work a full time job (40 hrs/week), we'll say 4 weeks in a month to make it easier to calculate, that's $1160 a month. Now lets take out a VERY conservative 15% in taxes (again, just to make it easy to calculate) you're looking at $986 per month. So with the 50/30/20 rule, that's $493 for needs. Average rent in the US is $1700 (first result on google). So i hope you like sharing what is likely a 2 bedroom apartment with 4 other people. Now, you could get another job, sure, but then you have to decide if that work life balance is worth it.
I totally agree with this comment, even his qualified financialist touts the idea that money takes time through small investments is narrow in the idea that many college students like Grant and Ally scraping by don't have luxuries of investable income or the prospect of time or a future. I get he's trying to do the basic catch up of good financial investment but schools don't want that because it doesn't help the schools past good college acceptance. That's what they go for as it's what gives money toward school programs from govts. I'd much rather a break down of school's intentions how we can break that cycle rather than another fast and broad finance 101 video. Even before the ad break, I get side hustles are good for more income obviously but this is the unfortunate problem of accepting the normalization of underpaid jobs like teachers, grocery stores, and other essential positions.
In Arizona, the minimum wage is $13/hr.. so just moving to another state has *doubled* your income... and average rent in Tucson for a 1 bedroom apartment is $977.. so you've also cut your living expenses in half. Amazing.
I actually was taught about money in school by multiple teachers. For example, one class I had in middle school had us take a budget and see what you could buy to live of. But hey, I'm just one random Texan that probably got lucky this was during the 2010's
At least at my high school financial literacy was a required course. Though it might not have been the most comprehensive class, it was better than nothing.
We did a similar budgeting project (and oddly, it was in a theology class? I can't recall why we did it in that class, but it's better than nothing). My main take away was "wow, it costs so so much money to live a basic life, and that's assuming you're doing everything you can to save money, earn money, and not buy things I want all the time. If one things goes wrong in life (injury, accident, natural disaster), I'm basically stuck in debt forever."
I am in my 20s and naturally am not gaining that much mone yet. I started doing the envelope thing some years ago. Simplest trick, but never failed me. There is something about touching the money you spend in order to grasp (no pun intended) how much it really is - also this way, youre not overspending. And no need to note how much you spend on what etc., which I often forgot directly after spending, because I never have time for such things after coming out of a supermarket.
I'm of two minds on this video. On the one hand, I think it's a worthwhile topic, and explained in a straightforward and entertaining way, probably a good starting point that someone can build off of. On the other, it seems to be pointedly avoiding talking about one of the biggest challenges when it comes to finances: predatory financial practices and hostility built into the system. Technical jargon used to make a system opaque so that regular people can't navigate it. Otherwise optional purchases made mandatory by laws or circumstances, often controlled or at least influenced by people making money off of the fact those needs are inflicted on people. Debt structures that are deliberately obscured so they're harder to get out of, because the longer you're stuck in debt the more money made by the company you owe while they neither need to put in any effort or provide any value for the money they're making. I assume it's because understanding all that isn't always helpful, sometimes it's just depressing, and the way someone gets out of a crushing financial situation is by setting it aside for a time rather than confronting it. But the way things are going, I think we're going to need these things, and they're what we'll really need to find solutions for if anything worthwhile is going to happen.
I pointed out that our system takes freshly-minted 18-year-olds with zero adult life experience and within a year can easily saddle them with $50,000 in student loan and credit card debt, whether that ends up bettering their job prospects or not. Then all the budgeting in the world can’t help them! 😕
Shout out to my school for having business and finance courses, and my AP Lang teacher for weirdly turning his class into a Microeconomics course. Like bro had us write a synthesis essay about shopping culture and the manipulation of the lower class via advertising.
I agree with you. But in my case, my high school had a great personal finance class that taught me everything that you stressed is important and should be taught. (I also took a CASH class, which revolved heavily on money management.) I'm 18, btw.
Graham Stephen tought me everything I need to know about money. I'm like the money guy now to everyone around me, I feel like I can see through the matrix of everything that evolves money
gran turismo 3 and 4 taught me more about money than my high school financial education class. yes, you read that correctly, gran turismo. not grand theft auto, gran turismo. you will be forced to learn how to budget your races with your car parts and services and saving money by buying a customizable transmission and suspension etc enabling you to enter that one-time purchased car into a broader spectrum of races and tournaments, and for whatever reason all of those challenges somehow translated into real life budgeting for me. i dont know how, it just did.
Practical advice. When I started out, I made very little. I took 2nd and even 3rd jobs. I spent less, when I had no free time, and used the extra income to build 1 month worth of emergency funds, then did a debt snow ball to eliminate my debt. I still have a mortgage, but no other debt, despite having 2 kids along the way. It seemed hopeless at first, but looking back over the last 10 years, I'm glad I passed on fancy things and am proud to be debt free. You can do it!
This video is a solid miss. The 20/30/50 is a beautiful concept, from a time when life was different. Learning personal finance does nothing if you don't have the personal finance.
Yeah, little to no mention of systemic issues and the comment section is toxic as hell. The vast majority of this video is only relevant to people making far above their local median income as median rent at best is about 50% of median income in US cities, let alone all other necessary expenses.
This was the most sincere, honest and informative video talking about money I have seen in a while if not ever. It's nice to talk about the shame we feel around debt and also trying to use our money to feel happy. Thank you! :)
my cousin taught high school economics, never heard of the money multiplier. it was personal economics, taught kids to get loans and credit cards. merika school system, teach 'em what you want 'em to be
American viewer here--I have some topics/questions to ask about. 1) Sometimes there is a sense that no matter how careful we are with money, all it takes is one accident or one illness, and all the savings will be gone. When you'd have to give up or adjust some of your needs to be able to save at all, it starts to feel like the better bet is to just take care of the need now and worry about creating cushion in the future. This seems especially difficult for things like if you need counseling or physical therapy--anything that requires repeat appointments where the cost never ends. You may have to choose between one treatment and another. People may avoid getting therapy because the cost stresses them out so badly, when the therapy might be the thing that helps them stabilize and start feeling less anxiety about managing money (note, I did say "might"). 2) How do we know what to buy in terms of insurance products? They seem complicated on purpose. I work for an outpatient medical practice in my area, and the entire customer service part of my job is helping people to understand their health insurance terms. It shouldn't really be that most people are only starting to understand health insurance when they're already at the doctor's office coming to get the care. Also, insurance companies are so predatory. It feels like we have no leverage and they can do whatever they want to us. How do we move the conversation so that everyone in the world recognizes healthcare as a human right rather than a business? NPR's bill of the month shouldn't have to be a thing. Also, I don't know how many people can relate to this, but the "conversations around money" in my family have always been things like "I am seriously worried that my body doesn't have enough labor years left in it to afford all the dental care I already need right now" and "well, if the utilities bills get to a certain point of delinquency, maybe *then* we can negotiate with the utility company to slash the total amount or offer a manageable payment plan." It's like we only talk about it when there's no money left and we're suffering hardships because of it. wheeeeeee trauma dump
I talked with my mother about how I was over $20k in credit card debt that then got wiped out within the first 5 months of the pandemic, because my family stayed home and did nothing while money was dumped on our heads repeatedly for those 5 months; seemed prudent to take the opportunity to pay off that debt! Then my husband finally got disability and we paid off HIS credit card from long before we even met and got a car that didn’t break down every time you looked at it the wrong way. My mother told me she would have helped me if I would have asked. Yeah, and reminded me of it for life, treating me like a bum on the street or thief, prying into my personal finances and telling me what to do with my life because “It’s MY money you’re spending!”. Yeah, played that game for a while, no thank you, I’m good now. A lot of millennials probably relate… 🤦♀️
Once I was complaining about this exact thing to, of all people, an accountant. I was like "if I were taught in school about this stuff I wouldn't have to feel so stressed and I would actually have more control over my finances". And his response was, simply, "if you were taught all of this in school, I'd be out of a job". I've never wanted to punch someone in the face more than that time...
We did quite a few life skills lessons in school, including budgeting, resume writing, and how taxes work. I also remember everyone blowing off those lessons.
I have really great insurance but i still blew through like $15-20k once I became afflicted with cancer over the last 2 years. so no, my dude, it isn't as simple as insuring against things you can't control. Insurance deductibles are crazy and they find every single way to nickel and dime you on top of that there are TONS of things they outright just don't cover (for instance, my assisted living nurse when i had a radical double mastectomy and complete hysterectomy) there was no way I could take care of myself but they assume if you aren't elderly you have parents or a spouse that can so BAM no coverage for assisted living for about two weeks that i needed it guess how much that costs! and then when you have to go to a specialist in another state for certain cancer treatment, insurance sure as hell doesn't cover travel or lodging (which they only cover the hospital for days you have to stay for active treatment like chemo or rad). good bye my life's savings while trying to save my life. no wonder so many people avoid going to the doctor and choose to die instead of going into debt, at least you suffer less if you just die.
My husband was covered by Medicare AND Medicaid and I still was charged close to 10k in medical bills after he died of cancer last year! I wouldn’t be surprised if just his medical care the last 3 months of his life cost a million dollars! And of course that doesn’t include the gas I burned visiting him in the hospital, the income I lost because I had to be home caring for him, the extra I spent on convenience food because I was putting all my time and energy into trying to keep him alive… a very common cause of bankruptcy in America is STILL medical debt! Oh, and I got a couple new bills recently, over a YEAR after he died! FFS! 🤬
this is a really good video in a lot of ways - honestly i think Taha and Melissa have some of the best videos on this channel (and in fact the entire internet, and i mean it!) - snappy editing (joe's work speaks for itself), facts about the queen, and a very decent introduction to quite a challenging topic. i do want to highlight how dangerous the advice to invest in property is though, people investing in property contributes to the housing crises and cost of living crises that so many of us are currently struggling with, especially in the UK, Australia, Canada and US. people make speculative investments in housing, something that should be a human right, because they are told repeatedly it's essentially a risk-free investment. i hope you can see why some of pete's comments have left a sour taste in my mouth in this video. i see a lot of comments have brought up other issues and i hope you aren't discouraged in any way from continuing to create videos like this one! but i hope you find an opportunity to reflect on the power and influence your words have as successful creators.
Percentage rules may work as rough guidelines for people with median salaries, but for anyone with low or high income, they are pretty useless. Even if most expenses have a range (cheap vs expensive car), there is always a lower boundary that you cannot cross. Or a tradeoff where you need to spend much more time/energy to save money (cooking vs takeaway, walking vs driving, ...). Which then means you may have less time/energy to earn money as well (which may include studying for a better job).
Yes; time and energy are also finite resources, but talking about those leads to accusations of being “lazy” and stories about how people managed to work full-time night-shift jobs and still ace college. Well, kudos to you, not everyone can do that! 😒
Hey folks! I wanted to chat about the 50/30/20 rule as lots of people in the comments have discussed how it doesn’t fit their reality. I feel like I should have emphasised more that, like everything in the video, it’s is a starting point for a budget rather than a strict rule (if I could go back, I would have not called it a rule and talked more about how it helped me shape my budget).
The cost of living has made things harder for everyone (especially rent!) & the book I based the section off was definitely written for the economy of 20 years ago.
The reason I ended up including it is because I found it really helpful to know where to start - while I too can’t make the 50% work, I found having a structure to be really helpful as a starting point, of how to think about and structure a budget.
I made the video for people like me who were confused and really stressed about money and the last thing I want is to contribute to the stress and confusion. I’m still learning as I go & I hope that this one section doesn’t detract from the overall messages!
- Taha 💛
P.S. the scam investing bots are out in full force, I am doing my best to remove them!!
I truly recommend looking up 50/30/20 budgeting for Notion. I used one where I could tinker a bit in order to have the budget fit my financial situation.
(e.g. Instead of 50/30/20, you could use the "formulas" to make the money be distributed by 60/30/10, or 30/50/20, or whatever.)
As a warning, it can be tricky to use Notion, so try to use examples of the costs of what you would buy, and see if you can make it work on your end. I'm in my second semester of community college, but I use it for expenses outside of my tuition. Good luck!
I appreciate you addressing this. Frankly, at this point we're looking at more of a 80/10/10 split. -_-
Hi Taha! Sounds like it's a good opportunity to create a new video about "best strategy in times of crisis", when so many people are concerned by the crisis. 😊 Like an add-on to this video, but adjusted to reality (to the reality of the vast majority of people watching TH-cam)
I seriously wonder what TH-cam gets out of all these spam bots. Padded "engagement"? They're pretty obvious and consistent with their "comments"; it feels like the TH-cam algorithms intentionally ignores them for some reason.
I think you were pretty clear that it was a suggestion, not a hard and fast rule. "If you don't know where to start..." "...and maybe it doesn't work for you..." "'I've tried a budget before and they never work.' ... Common reasons budgets fail is that they ... don't reflect your reality." But I don't think people commenting about it are concerned about you framing it as a "rule". They're commenting on how out of touch it is to even suggest it as a suggestion (not a rule). The economy is so fucked that the 50/30/20 suggestion is only slightly better than suggesting "just pick yourself up by your bootstraps!" It sounds flippant, even as a suggestion. The idea of using X%/Y%/Z% for needs/wants/savings isn't a bad starting point for those who actually make enough money to cover more than their needs (which is far from everyone), but I think it's just the numbers themselves that are taking people aback.
I'm a teacher in the UK and I go for the 80/20/0 rule. 80% necessities (incl food), another 20% on food because my initial budget doesn't cover the cost of living increases, and the remaining 0% on future planning and saving. Bish, bash, bosh
Yolo!
Now you're getting it! bish, bash, bosh!
At least you have healthcare and a pension, so your emergencies are less likely to be fatal. 😅
Did you cook your food yourself or just buy a prepared one? Just curious.
Yes - prepare it all myself, and cook larger portions to reheat later on in the week. I even go to a local greengrocer to buy the exact quantities I need to cut down on food waste@@nnov_tech_chan7891
Taha and Grant O'Brian are two people who surprisingly reduce the amount of degrees of separation for anyone on the internet, I suppose it makes sense they know eachother
also, brian david gilbert
I feel like you can really use him to shortcut across these seperation games
he's in adventure time, starfield, adsfmovie fallout 76 and a bunch of podcasts and not to mention he was over at polygon for a while, has his own youtube channel and now I mention it, wasn't he on the ai learning episode of answer in progress?
oh and john DiMaggio, he's everywhere
Also, pretty obviously mrbeast
Hank Green is also pretty good at that lol
@@alexreid1173funny enough hank was on a dropout show and he’s one degree of separation from grant and he also is friends with taha
The big issue with "spend less than you earn" is when you make very little. You can't save anything when your "needs" takes up 100% of your income.
''it goes it goes it goes it goes GUILLOTINEEEEEEEEE yuh'' - MC Ride
You then need to make changes. If you can't afford to drive, you probably should find a way to make not driving work or get a roommate or several. There are always ways to spend less than you make.
@@MegaLokopoexplain why being homeless is so expensive and how they can cut costs even further 🤡
@@MegaLokopoI use public transportation and have a roommate… I still spend 80% of my income on rent alone. And my rent isn’t even that much compared to what many people are paying! I’m extremely frugal and don’t really spend anything on wants
yeah another channel called how money works talked about this stuff and said point blank that eventually you're just going to have to make more money.
I’ve seen a few of these “learn about money” and “get out of debt” videos. They are all great at laying out the basics (especially this one.) But, I’m always disappointed that they don’t add something about the number of people in a community that can’t make more than they need to spend to survive. We always consider personal finance to be personal responsibility and never bridge the gap to community organizing to lobby for more housing and community goods to help people live within their personal means.
The one thing that has made a big difference in my life - cheap housing.
Just look at how much money goes out of a families budget to the insane housing market these days, and you find a large part of the problem right there. When more then half of your income vanishes instantly it really is impossible for you to do the whole 'saving up' thing. I recognize how lucky I was to have friends and family that do the communal living thing, for it brought the cost of housing down a great deal for us all.
Yeah, every one of these videos should include in each of its points what kinds of policy to advocate for to make all this advice practical to follow.
Interest rates aren't just a thing we have to accept as being "high" or "low", these are deliberately exploitative and predatory. The onus shouldn't be on the statistically less educated and less wealthy person to have the right moral fortitude and vigilance when it comes to a financial system designed and controlled by wealthy, educated elites.
Absolutely adding “if you like bad news, I have good news for you” into my dialect
Modest Mouse "Good News For People Who Love Bad News"
I taught high school Econ in Missouri, and one-size-fits-all financial advice really isn't appropriate for kids from different socioeconomic classes. Some families spend 100% of their income on necessities, some are more prosperous but need to take care of extended family, others have a complex, integrated family fortune, etc.
In the end I turned that into a teachable moment for the richer kids in the class: I gave them an assignment to plan the finances of a poor family. Sophisticated budgeting or investment techniques are useless when the cost of necessities is higher than the family income. They need to make hard choices like moving the family of 4 into a 1-bedroom apartment to save on rent or having the eldest son leave school to work a minimum-wage job.
Sophisticated financial maneuvering is even more important for broke families. The core concepts are the same. Always understand your options for increasing income, getting financing, the importance of liquidity, cutting expenses, and risk management. It may not be politically correct to have kids write out the unpleasant/ grey market stuff but it would definitely help improve outcomes.
Love the teachable moment on this - shows what the reality is for folks who don’t have a great deal of financial means and just how difficult it can be to get out of that situation.
That's a rough situation you handled uniquely well, it seems.
My econ teacher had everyone play SPENT in high school and it really opened my eyes to how insanely difficult budgeting and life is
@@FullLengthInterstates Broke is not the same as poor. Broke is a temporary financial situation. Poor is perpetual. There is a reason almost no one gets out of poverty and it's not because people are stupid. It's because having money allows you to make money, but only once you reach a threshold. You can see this in the uber wealthy. They make money doing nothing because the pool keeps aggregating due to whatever they are invested in.
You can't invest at all if you don't have anything left over after basic necessities like rent, food and bills to exist with any measurement of a roof over your head, food in your stomach, clean enough water and some heating/electricity.
People assume the pool is bigger than it is. You can't swim in a puddle.
You don't have the option to increase your finances when you have to increase your spending in order to do so. Which is usually the case with going to school, moving or getting a mortgage.
More than half the world is poor/lower class and stuck in this situation to one degree or another.
Sabrina's editing is next level and Taha's editing is sooooo unhinged I love itttt
Yes it is but there is at least one image stolen from the image bank. Not cool. Otherwise the video is very cool but this just makes me angry.
@@kikitauer what?
@@lovell8983 You can tell by the watermarks. Those images are not free. They are usually put in the image bank by the freelancers who hope to make money out of their hard work and use of their expensive equipment.
I don't mean to s**t on the video though. I think it is a great video and we all need to hear the message.
@@kikitauerusing images with watermarks is a meme. You’re allowed to use photos that have watermarks. AiP do this often in their videos.
@@damiadeniji No you're absolutely not allowed to use photos with watermarks when it is from Alamy for example. Which they did. I don't know about the meme stuff and it might be true but the photo from Alamy is stolen, period. Why the *** you think the watermarks are there? To be pretty?
basics aside, something I never see talked about is how to actually *spend* money effectively.
I grew up poor, so when I became an adult and started working I would just save as much money as possible, minimizing monthly expenses and *never* making big purchases. Now after 4 years of work I'm at a point where the cost-benefit analysis is quite obviously pointing me towards actually buying stuff. I need a new phone, new pc, kitchen appliances, etc. Not buying those things is costing me significantly more time and stress than is worth it. It genuinely feels so alien to be spending money now, almost like some kind of self betrayal.
A properly set up zero based budget is a good way to give yourself permission to spend money while knowing you are still meeting needs and savings targets. You take all the money you currently have and give every dollar a job based on your needs, wants and priorities. I personally use YNAB for this, but spreadsheet or pencil and paper should work too. If you have enough earmarked to any given item to buy it then you don't need to feel guilty making the purchase up to the budgeted amount.
I swung another way. I grew up with not much money, but we did have food on the table everytime. Anyways, when I got more money I suddenly started spending. I got ADDICTED to spending! And I just never learned what to spend on, what was worth it. So I bought bad stuff and also just stuff I didn't need. And if I couldn't find anything I may need now I started thinking about stuff I needed later when living on my own.
FINALLY I have now (a few months ago) really realised that this is bad, after like 5-6 years. So now I have stopped spending on random garbage and am only left with the painful task of selling/throwing away stuff to get my home cleaner and emptier.
PLEASE don't fall into this trap either.
I also have trouble spending money. I have this idea in my head that people Will judge me based on my purchases, so getting the expensive butter meant I wasn't allowed to complain about not having money...
I'm not going to give advice on how to be better at spending, but the one thing I will advise is separating the spending (not just writing out numbers on a budget sheet - I HATE budgets), but by literally having a separate account for necessary bills and moving my monthly amount into it. What's left in my "spending" account I know I can spend free and clear, no strings attached.
@@summertime69 Great advice!
I'm in the same camp as the two of you, and I like to spend on the things that bring me the biggest utility or value in life, and spend conservatively on the rest. Taking a new phone as an example, most people use their phones for over 30 minutes a day (at a very conservative estimate). Over the course of a year, that comes out to 180 hours on the phone, and i think its fine to spend on one if your phone isn't in working order.
I also enjoy dining out and treat myself to dinner with family a few times a week because it's something I greatly. To feel comfortable spending on dining out, I spend very little on clothes, electronics and other things in the wants category.
10:09 I feel like everyone needing a main job AND a side hustle to get by is a frustrating symptom of the growing difficulty of covering basic expenses, driven by stagnant wages and increasing inflation (particularly in housing and food). For our parents' and grandparents' generations it was so easy to get by on a median income, but now it feels like you need a main job AND 1-2 side hustles just to get by.
Welcome to capitalism, wage slave.
Agreed. Teachers often need side hustles and the more normal this becomes, the more administration and governments feel less pressure to change the flow.
It isn't hard to get a better job or to reduce your expenses.
@@MegaLokopoEXTREMELY LOUD INCORRECT BUZZER NOISE
@@a_person5668 Why is it so hard for you to get another job that pays more? What prevents you from lowering your expenses? Do you drive a car? I don't, I talked my boss into driving me to and from work as a condition of accepting the job offer. Driving is optional no matter where you live.
I love that Sabrina, Taha, and Melissa each have their own style for their videos and their own brand of chaos
Only 50% towards necessities? Hon, I'm Canadian: 50% of our money just goes to RENT. This does not even include food, utilities, clothing, anything other than rent. It's MADDENING how high our cost of living is. I'm 33 years old and I still live with my parents for this reason.
Why renting? Why don't you get a mortgage to buy a house or an apartment of your own? Renting will be forever, while mortgage only lasts for some fixed amount of time.
@@creounity "If you're homeless, just buy a house"
@@creounity current interest rates make a mortgage significantly more money a month than rent.
@@creounity Also banks might deny you a loan.
@@creounityat least here in the western US, housing is beyond unaffordable to buy. And it's very difficult to save for a down payment when you're spending half your income just on rent.
This is a small part of the video, but I'd push back at the idea at 5:47 that wealthy parents pass on good financial advice to their children and poor parents pass on bad advice. Being rich doesn't necessarily mean you're good with money or having financial literacy conversations; you may just have inherited a ton of money. Likewise, poor parents often talk much more about money to their kids, and poor kids likely grow up with a much more clear idea of how far a dollar goes (or doesn't). People aren't in poverty because they have bad financial literacy (at least in the vast majority of cases). They're in poverty because they don't make enough money, and it's impossible to save money when you don't make enough to cover the necessities.
True so far as it goes, and there are plenty of stupid people with wealthy parents - but if you've got wealthy parents and friends, you can easily find out where to hire a competent money manager. It's much, much easier to stay comfortable once you are comfortable than to pull yourself out of a hole.
Exactly, very well put. What is also important to now about richer families is that they have connections and a network that places the children well off for the future. That isn't something that will change from a change of curriculum either, although I do like the idea of teaching more responsibility about spending.
yes, but the majority of people who are good with money end up making/having a good amount of it. then they have kids and the kids see how their parents act and learn their habits. all young kids are doing is looking at what the people around them are doing and learning from that. and getting money is the easy part, keeping it is the hard part. most wealthy, or even just well-off people don't waste money, and their kids see that. the exception does not make the rule
I disagree, poverty is a complex issue. Sure there are exceptions of poor kids that do great at school but generally children of wealthy parents, say children of lawyers, doctors, etc. do much better because their parents, even if not explicitely, teach them about the importance of education. On the other hand, poorer families tend to not value education as much. Children of poorer families tend to be more problematic, rebelious and generally do worse. Even with iq studies in poorer zones within the same country, get worse results than the richer zones. Does having money somehow make you smarter? Of course not, the influence children get from their enviroment truly is important.
At the same time, it is absolutely the case that this is not the full story. Having money is a tremendous advantage. As the saying goes, being poor is expensive. I just wanted to give the nuance that poverty is, in my opinion, a complex issue.
There are some poor families that are honest with their kids about money, I've seen also some which went out of their way for the kids not to feel excluded at school, so they either had to take another job so the clothes wouldn't be bought used and their cell phone was paid in time, or they would be slowly drowning in debt.
This gig taking to make money for what seemed like necessities was why they have no time to talk about money to their kids, so the child is wonderfully oblivious about what's the fuss about money.
Fortunately, there are a lot of educational materials out there nowadays, so most of my friends who lived like that have pulled by their bootstraps or whatever - but I'm well aware that I lost contact with some people and I don't remember anyone dropping out of my school, and that's probably where my bias comes from.
I think an additional part of the problem about financial education, is that the age that we are taught is counterproductive. Learning to manage finances when you yourself don't have finances means you're trying to learn about it without meaningful context or application. And unlike Maths, English, or other classes that iterate year over year hardly giving you time to forget in the meantime, my financial education was a single semester a solid couple years before I would graduate high-school, gain any sort of control of my finances, and try and apply knowledge that unfortunately is two years forgotten. I would rather see it become easier for fledgling adults to find access to high quality resources when the knowledge has meaningful impact on the finances that are now their own, than be taught to a child who has yet to see any meaningful way to apply what they've learned. Well, maybe both is better than one or the other.
Not really. Minimum age to work tends to be 14 unless you are in outliers like New Jersey or Illinois. Two years before graduating is a perfect time to have it included.
You hit the nail on the head. I suspect the biggest reason why people don't remember the financial literacy being taught in schools (as mentioned in the video) isn't just that it's inserted oddly, but also that high schoolers have no need for this information for several years, and as a result are unlikely to pay attention or be invested. How much do most people really remember about most high school subjects? How many people could do some basic trig formulas or calculate the velocity of a paper plane?
@@crymmt6329 Maybe kids should respect school more? I don't understand why people like to blame schools for not making them remember things, and not making things interesting for them to remember.
Guess what? Most things aren't interesting. Most things are just boring tedious. You just have to suck it up, learn it, and remember it. Even if you don't know why yet. They teach you basic algebra for a reason. Don't know why? Who cares. Just bloody learn it.
It is a bit too complicated to boil it down so simply, but those that argue for economic education are not talking about a one-time deal, but instead a core, lasting subject that follows and evolves with a student based off their expected understanding of finances. It isnt "one semester 2 years before graduation" or "buried in the main maths courses", but instead "elementary kids learn what money is and the purely mathematical value (a penny is 1 cent), which slowly evolves into spending for luxury since that is their only concern. Middle school then teaches costs and needs, but not full on budgeting (ending at "make sure you have more money than you spend"). High school then has the final task of teaching budgets, debt, socioeconomic conditions, inflation and how to judge what is "normal" or "good" debt (including the ability to call out unreasonable 'inflation' and companies trying to use it as an excuse for price gouging)." Instead, we get a system that only prepares students for higher education and banks off their planned economic ignorance to push unreasonable student loan debts onto them.
Resources for recent high school and college grads is great, but it still takes active searching when school leaves them in a place where they have no idea where to look to find them. Heck, when the bigger scale of economic misfortune is the norm for the conversations about how new adults in this day and age cant afford to live, a case could be made that a need for an early economic education into the concept of saving early so their "wealth" can build while they have no need of it would go a long way into ensuring an immediate "emergency fund" when the kid finally needs to learn how adulting works without a system in place to specifically teach them; interest might not keep up with inflation, but at least the kid isnt starting from literally $0 to handle the transition to adulthood and adult responsibilities.
Minimum work ages are the reason it is taught when it is, but not every student "takes advantage of" or is "forced into" that situation, leaving those who value their childhood and lack of responsibilities that come with it in the void of forgetting the lessons, assuming they are not already outdated by graduation (especially with an additional 4-6 years of college for a "good" degree depending on their willingness to cram the requirements into the 4 year minimum and feasibility of coasting off other financial aid).
We were required to take a 1 semester econ ed class in my high school. I know they showed us W-2s and tax forms at least once but since it wasn't relevant to me yet, I didn't retain any info about it for when it was. The only thing I actually learned in that class was that student loans don't disappear if you die bc that was kinda shocking.
I'm sure they talked about loans and probably credit cards and banking as well, but I didn't remember any of it even a year later.
WTF happens to student loans if you die, then?
I think it comes out of your estate (any money, possessions, property, investments etc that you own) before anyone can inherit your stuff? Or the debt is passed onto whoever gets your stuff? I could be wrong though. It does make me wonder though, if you bought a house with a mortgage, what happens to that loan if you pass away? Is a new mortgage negotiated with whoever inherits the house based on what's still owed and that person's credit then? Is credit card debt forgiven if you die? All I remember is something about other debts not sticking around in the same way that student loan debt does. I guess because you gained knowledge from what you paid, which is not something that another person can inherit in the same way as possessions. But I'm not actually sure how any of it works!
If someone knows, please comment it!
@@Spi314i did a business minor in college, so i’m definitely not the most qualified to speak on this, but i think it depends on the type of debt you leave behind. ex: you are a single person with no kids or spouse and you die and your house has a loan. when nobody to takes it over, it’s the bank’s house. when my parents pass, their house goes 50% to me and 50% to my sister. i plan to buy my sister out of her portion, so basically i take on the remaining balance of their loan (they’ve refinanced a number of times, so i definitely anticipate them leaving behind at least some portion of a loan). credit cards are a little different because there’s not an asset the loaner can take like a house. if i die, basically they’ll take money from my estate. if i die after inheriting my parent’s house or cars and those are my only assets, basically they can take those assets. if i were to die with zero assets, it can’t be passed on to people who aren’t cardholders or consigners. i don’t think that’s very common, though. for example, i’m a cardholder of one of my mom’s credit cards. if she died in debt on that card, i’d be responsible for it. luckily, though, my mom makes good financial decisions and i don’t anticipate her passing anytime soon. federal student loans are discharged if you die. private ones may have other rules. (this is US, obviously)
another thing to consider is life insurance. this is part of the reason i have it. i get a certain amount for free through my job with the idea that it could theoretically help with any potential outstanding balances i have if i were to die. i don’t have any kids or anything, but a little bit in life insurance can mean that my parents or sister won’t become responsible for paying off debts like a car loan, or being burdened with having to sell my car shortly after my death to cover (some of) the costs. my parents have gone to extensive lengths to set up trusts to make sure my sister and i are financially taken care of in the event they pass sooner than expected, and i plan to do the same if i ever have kids.
Student loan debt is also one of the only (if not the only) types of debt that can't be dealt with through bankruptcy. If someone files for bankruptcy because they don't have enough money to pay their debts, those will be dealt with and you won't have to deal with them anymore but student loans are still there no matter how many times you file for bankruptcy
I’m in middle school and we did this thing called finance park where we were given a person with a job salary possibly a family and we had to make a budget and then spend our money on things we needed and at the end our tablets calculated how our financial situation would be in 10 years and we also did a whole unit on finance in world studies so that something.
that sounds amazing!
Unfortunately, that is often only done once. I'm in early grad school currently and I did a similar exercise back in high school. But to be honest, I don't remember much of it because I was lucky enough to have parents who have worked their butts off to be financially stable.
It really needs to be a whole unit, if not a whole class, that is mandatory in school to be useful.
Did the same thing in middle school and my highschool had a required personal finance class. At the end of the day it all boils down to "save as much as you can, and don't spend too much on 'fun' things" but that's just common knowledge. They don't factor in emergencies, they don't consider how much more expensive it is just to be alive today than it was when those courses were first made, especially when compared to stagnant income. The system simply needs to be reworked
@@calebhughes975 the solution is to make more money and be very very cheap. then either pay of debt or invest. if the investment will earn more than the interest you are paying, do that. if the interest is lets say 10%, and you would make 8% investing, pay the loans first. once you are debt free, just invest. and also have 3-6 months of expenses in a high yield saving account as an emergency fund
We did that at my school too, it was neat but almost none of it stuck. Also, the workers very clearly didn’t want to deal with my school so they didn’t put in too much effort which didn’t help
The feeling of seeing Adam Conover and now Grant O’Brian while directly referencing a dropout show makes me so happy, I love seeing my favourite things cross over
I teach a personal finance course in the United States. North Carolina Public Schools requires an entire course for every high schooler. To be fair to everyone commenting here: this was passed two years ago. I got specialized training to teach it, and half the course (9 weeks) is budgeting (including the 20-30-50 plan and emergency funds), investing, taxes, credit formation, and loan management. I pull a lot from Next Generation Personal Finance, which is a New York based curriculum that has a great youtube channel.
The 50/30/20 rule is a great idea or guideline to spending, but it's becoming increasingly unrealistic, not just in the US. Necessities by now usually exceed 50% of peoples incomes, quite possibly regardless of their income bracket. So, those extra percentages have to come from somewhere, which a) may lead to a lower quality of life or b) makes saving money for emergency difficult or even impossible.
Edit just to say that I really enjoyed this video, and it certainly is a great starting point to learning budgeting and what to look out for. You're doing the Internet a service!
Was almost all the way through the video before I realized this went up today. My debt has been on my mind a lot lately. Currently between jobs for... Complicated reasons that were beyond my control. That said: even before I lost said job I was avoiding thinking about my debt. I paid what I could, but I didn't have a plan. I've got about a dozen screenshots from this video pasted into a private Discord channel and I'm thinking about my budget. I know that I can tackle this. I know I need to forgive my younger self for putting me where I'm at with debt, stop thinking about the past, and start thinking about where I'm going next.
This... Yep. It's what I needed to see today. Impeccable timing. And thank you.
Best wishes; there’s work out there. This was not the case from 2008-2020! 👍
I hate past me, too :/ I’d like to go back in time exclusively to slap some sense into myself.
This video has good financial knowledge, but it's not exactly applicable to everyone. I live in the U.S., and if you can be in a position of spending only 50% of your income on necessities while living by yourself, that is a huge accomplishment.
Oh, and I remember budgeting being taught in my JROTC class in highschool (it wasn't taught well). My dad also had me read a book on managing money, which is where I first learned some of the stuff mentioned here.
Reasons Budgets Fail: most people aren't rich enough to spend less than 50% of their income on necessities
@@durdleduc8520in the US, at least, median rents in every city are roughly 50% of median income or far higher. This means it is literally impossible for large swaths of the population to keep necessary expenses under 50% of their income. Not just difficult. Not just not hustling hard enough. Literally impossible. Wages are too low, rents are too high, and housing is too scarce.
Keep in mind, this too is a falsehood of housing being scarce. There's a surplus of living space, but since it's kept empty by it's owners for lack of profitability in one way or another.
You have to keep in mind there is always a way to save money whether by working more or not eating out.
Most of us spend 100% of our income on necessities and then are so burned out from late stage capitalism and working 60 hour weeks that we spend money we don’t have on credit cards on stuff to provide any little bit of dopamine so we can stay just miserable enough to not off ourselves and keep contributing to the late stage capitalism machine.
@@lessefrostit’s not a falsehood. The type of housing you are describing is inaccessible. The housing that is affordable and available is LIMITED and that is the truth
Something that really baffled me about this video was, that it never mentioned inflation much. If you Invest your money and you get a return of 4% each year, and inflation is at 4%. At the end of your career you will have the same purchasing power as at the start. This is something very important to understand! For an investment to be worthwhile it needs to beat inflation most of the time.
But I'm also not in the demographic of this video, I do reasonable well financially and I am working on a degree in business and economics with a focus on finance.
Inflation and compound interest are two big missing pieces IMO.
I similarly think that I am not part of the target audience. I like with my parents so I should probably be saving much more than 20% as my necessities are lower cost
@@U1TR4F0RCE I am also living with my mother. I aim for around 80% which goes straight to my investments at the start of the month.
Even in your case, though, having a return of 4% is still better than having a 0% return, or spending all the money.
You basically trade current money with future money. You also add money to that fund every single month, so at the end of it you have more security than if you spent the money.
@@Serena-or7sl Thats partially true, however this is not the point I want to make.
there're a lot of bad/expansive financial products on the market which will tell you how you will make 5% profit per year after fees.
However after years you will check in and see that you pretty much gained nothing.
being aware of inflation will make you choose better funds to invest into.
You're only protecting your purchasing power and at that point its pretty much irrelevant if you spend your money today or tomorrow from an economic perspektive.
This is fine advice for folks who are earning enough money to start with. Few people have control of their overhead. When your income potential and options are limited, budgeting is useless.
A LOT of people are pointing out that just the rent/mortgage is often around 50% of people’s incomes! This is the ACTUAL problem!
The problem about cutting out credit cards entirely is, in the US at least, using a credit card *and paying it off* is very important to building up your credit history and credit rating, which is used in a broad range of contexts. Employers use it in background checks, landlords may use it to vet renters, and of course when it comes time to take out a mortgage or a car loan (hopefully a small one), a good credit rating might be the difference-maker in getting the loan approved (and it could save you a lot of money on interest too).
The solution is easy - don't actually use your credit card to buy things unless you can pay it off right away (or weeks before whenever the interest kicks in). ie, use your credit card as a bank card. Don't use it to actually borrow money.
50% on necessities is a pipe dream. At minimum, just with groceries, rent / bills in general, and gas, 70% of my budget _must_ go to necessities. That’s why they’re called necessities. I then have about $825 to spend or save. That book is incredibly outdated.
Glad to hear 100% of your budget isn’t going to necessities and then you get to decide whether you risk the electric or phone getting shut off this month! At least you have SOME extra! 😮💨
It's easy to say "cut down on spending" but no one really talks about what to do when your bills take up everything. I'd love to see someone who had real advice on how to get out of that kind of situation.
But there's nothing you can do except cut down on spending, even if it is your bills. You just have to find a way of cutting down your bills. There's no way around it. There's no trick to it.
If you're doing to drastically cutting down your utilities use day-to-day, then you're f***ed.
Love the attention given to shame, avoidance and acceptance. I sense a common theme with Taha's previous work on procrastination, and I'm here for it.
Paying off the smallest amount first does have one big advantage that's not just how you feel.
It clears a debt which reduces your minimum payments.
If you're the kind of person who doesn't have a lot of wiggle room in the budget for emergencies that may be worth paying more long term if it means a short term emergency doesn't cause you to miss minimum payments or borrow more to meet them.
So hurtle toward maxing out all the credit cards faster to have “savings”? Yeah, that makes no sense. My cards are paid off now, BTW. Finally have enough to live on. In my *40’s*! 🤦♀️
Student debt in the US is so messed up, man. I had sizable student loan debt when I quit uni in the Netherlands but with a decent job I was able to pay it off in 6 years because there was practically no interest on it. High school should at least show for different majors / professions something like "this is how much debt you'll likely be in when you graduate; this is how much you're likely to earn". Plus maybe some reasonable numbers on living expenses so you have _some_ idea. _Then_ you can say the 50-30-20 thing.
Yes, a good way to connect deferent communities with Grant O' Brian. + Facts about the queen.
11:16 lol and we're immediately in the realm of fantasy. imagine only having to spend 50% of your income on things you NEED to spend money on.
Just make enough money right? Also invest with another 10%. Also just pay debt ez. Also also work more because retirement won't cover your life.
More likely you spend 100% of your money and are still neglecting very real needs like fresh, nutritious food, medical check-ups, dental check-ups, that oil change the car needs, that overdue electric bill. Everything’s super easy if even 90% of your income covers what you really need to keep being functional and productive! 🤦♀️
Depending on where you live, this is a possibility.
I hate the attitude of don't spend $5 on coffee every day, that's the thing holding you back from being successful in life. Yes, buying $5 coffee everyday does cost a little less than $2000 a year, but the fact of the matter is most people don't buy fancy, mocha frappe whatevers everyday. That's like saying, "going to an ice cream parlor every day costs a lot of money, why would you do such a silly thing?" Of course people aren't doing that, that's a crazy thing to assume that people buy that everyday. What is strangling the people of today's wallets is the stupid costs of being alive, spending money on housing, food, utilities, and transport. I live in a pretty suburban area and it costs around $2000 a month just to exist. That's an insane figure for just being alive with no fancy coffee, accommodations, eating out, or grand vacations every other year. I shouldn't need to make $30,000 a year to just be alive, especially when most jobs in my area offer less than that starting out.
And this is why I refuse to go to America. Europe might not be a paradise but it's at least not this hellish and scary. I hope things get better and people realize the power they have and changes are made to improve the situation.
@@billclinton1235i don't blame you. There are good things, but huge issues like that really overshadow others.
In the USA, home ec and other such classes used to be much more prevalent. Generally speaking, school districts started lowering funding for those in order to increase funding for classes related to standardized tests and college.
I personally only remember doing money stuff in math classes, but that was basically just using USD as a unit and not working on personal budget skills etc.
As another commenter put it, schools are here nowadays to teach us how to be "good workers" who are compliant (at the very least, see the normalization of horrible schedules and heavy workloads).
Shit sucks
Oh yeah, also the 50% necessities doesn't really work for most people, at least in the USA. We don't make enough money to spend that little on necessities.
Love to see Grant here! Maybe Adam can join too
What else are you spending money on? I have 80% of my income going to just rent, I make it work why don't you?
What is this nowadays with this Garbage About "school didn’t teach me to be a grown-up" 😭. Schools have never been there to teach you how to live as a responsible adult. They have always been there to teach you how to read, write do mathematics, science, history, etc. any home Ec classes that I ever recall having were basic things about sewing and cooking and never included how to manage your money. That’s what you have parents for. They’re supposed to raise you to be a responsible adult. If your parents failed you I’m sorry, but that really isn’t the school’s fault. I was raised and taught how to cook, clean, do laundry, balance a checkbook, and the fact that you shouldn’t spend more than you earn really wasn’t mentioned because it was kind of obvious. Everything we ever wanted wasn’t simply given to us we had jobs and saved for special things that we wanted. It was all part of being brought up to be responsible adults.
I was at first shocked to hear these skills were not taught everywhere. I come from a rural town in Kansas, and no courage isn't my neighbor, but I do serve him coffee on the weekends, anyway, my school taught those classes, financial literacy, home economics, entrepeneurship, on top of the stem classes, in fact they werent just electives, they were core classes you had to have. We were even taught government, beyond just how to vote, and into politics, what everything meant, how the system worked (to an extent), we were taught geography. To this, it was shocking hear how we didnt see these classes everywhere, we were not a rich town, hell, most people in my school had to be on lunch programs, but somehow we taught that stuff and I am thankful. I wish this was more previlant, I am glad we are starting to get there, but man is the road a long one ahead.
As to why, the U.S educational system we know came about in the 50's as a response to the new baby boom generation and was geared to prepare the new generations to become good in the work environment of the time, 9-5, M-F work week, do what your told, regimented schedule, even the fact you don't talk to co workers was there to prepare people to the life of a factory worker and more. It stuck sadly because people didn't want to change, its a normal human psychology that we dont want to change how things are because that leads to vulnerability, the thought we have to face the unknown almost. This leads to a mindset of "I learned this way, my kids can learn this way too." when in reality, not only is that not ideal now, it wasnt even ideal back then, and we see that now, but those people still are in power so here we are fighting this fight.
@@pjschmid2251 Thank you! School isn't about raising kids. It's about giving them critical thinking skills and knowledge that they can add on to as they grow.
simple solution if you arent making enough money: make more money. there are hundreds of ways to do this on the internet, and u can learn for free and start for cheap. the best way to make money is employ yourself
Balancing a checkbook is NOT taken care of by your bank. Your bank will process payments in the order they are received, and most businesses bill immediately because they want their money, but it is still absolutely the responsibility of the individual to know what they’re spending and if they have outstanding payments that haven’t cleared yet. I know so many people who find themselves suddenly overdrawn because they see $20 in their back account, spend the money, and then some charge from the day before, or a preordered product from months ago, causes them to become overdrawn.
Also, doing a monthly reconciliation is a fantastic opportunity to see what you’re spending money on, and if your spending habits are in line with your personal properties.
One of the biggest difficulties with teaching about money in school is how different the money situation can be between students. At my high school there were some students who were given $1000 from their parents to experiment with the stock market, and students whose parents were taking payday loans to pay rent. What can a teacher teach in class that is helpful to both of these students?
Yeah but what I'm assuming you're unaware of is that some banks actually stack the payment processes so that they can charge you late fees. My roommate used to get hit with late fees literally every week (they're paid weekly) when they had Woodforest National Bank but now that they closed that account and now have one at a community bank, they haven't seen a late fee since ...
I’ve not seen a cheque book in nearly 20 years…might as well teach me to saddle a horse or string my longbow. Cheques are a thing of the past.
It's impossible to even use checks at all in my country.
Everyone uses credit/debit cards
@@ludwig2345 Balancing a checkbook isn't about having a checkbook, strangely enough. Like, technically it would more accurately be called bank reconciliation, but nobody really calls it that. The idea is if you swipe your card, you should know that you have spent that money, and when you check your bank account and it says you have $50, you should know whether you actually have that $50, or you have $10, because the $40 of gas you spent two days ago hasn't come out of the account yet.
@@alanboyle6751 I just explained to another comment, so I won't do the whole thing again, but the point is about knowing which transactions you have already made have cleared your bank yet or not. It doesn't matter whether that transaction was made with a check or an ATM card.
This is why I will always advocate for going to community college and state colleges. Please do not be taken in by the lies of private universities. They are nice, yes, but they are not necessary by any means. The piece of paper you're given at the end qualifies you for the same jobs whether it comes from Podunkville Community College or Ivyleague University. The difference is how you use it and how many good connections you make and opportunities you take. Save your money and invest it in a retirement plan or something.
For the most part, I wholeheartedly agree with what you're saying. State/community college rules, and more people should be taking advantage of that. I will also say, however, it is still worth applying to some private schools - it's possible to get very need-based financial aid from certain ones. I was lucky enough to get into a private school in Boston and the aid I got covered 95% of tuition, making it cheaper for me in the end compared to a state school. Just something to think about
it depends on which field if you are getting the same jobs. and also the job isnt the only thing you are gaining from university. often the professors have done something big and have lots of experience. you dont want JUST textbook knowledge. also if you are going to school with super rich people you will make connections
Right, a lot of the benefits of higher education come outside the classroom. In particular the spontaneous connections you naturally form in and in between classes, which a more elite school has a higher concentration of peers and contacts with more access to opportunities.
Sure you could be just a technically competent having learned everything through random Indian instructors on TH-cam, but that "piece of paper" plays into the biases of gatekeepers like business owners and HR folks looking for something that makes you uniquely attractive out of probably thousands of competitors.
I'm from a pair of towns with 4 universities (each town has 2).
1 private liberal arts school
1 public (SUNY) liberal arts school
1 private tech/stem/buisness school
And 1 public (SUNY) tech school.
I'm sorry but the SUNY schools just aren't the same as the private schools. Sure the "piece of paper" might have the same title on it, but everyone (hiring managers and the gate keepers to employment) knows which school has better teachers, harder curriculums, and more in-depth coverage of topics.
This isn't a slam against public schools like the SUNY system in New York, but the fact is they qualify you for very different positions than the private universities. One will get you a job as a lineman or other "technician", and the other makes you an Engineer designing the system who knows 8 layers deeper theory and has been tortured with second order differential equations until you intuitively understand the topic.
Others are making the point that you are more likely to get a better-paying job with the private school degree. I’d counter this is a huge risk; no guarantees of that, plus said “well-paid” job might be in NYC or LA where the cost of living will put you into de facto poverty. My advice to my son is to get a cheap 2-year degree at the community college and see if he can get an entry-level job with that; a lot of employers will help pay towards a 4-year or master’s degree so a young, bright (white, straight, non-disabled; yes, these all sadly make a difference, but my son lucked into every privilege except generational wealth) man can move up in the company.
This video couldn't come at a better time for me. I just graduated, I'm months away from getting my title and I'm about to have my first job next year. I live in Mexico so my conditions are different and I don't have to think about rent but the idea of using money well, knowing how much to use, how much to save and how much I can actually enjoy is still haunting. Not even life here is cheaper or easier
Just pay debt as fast as you can, thats the only tip you need
I was lucky enough to have a Social Studies teacher who taught us how to budget instead of having us write an essay because he thought it would be more useful to high school seniors than an essay - we had to find a job - if the per hour was not listed we had to call - then we had to find an apartment within out means that was less than a third of our pay so we could have room for utilities - which we were also required to call to find out how much an apartment of the size listed would run per month. He showed us how to budget so we had enough money left over so we could put some away every month. I'm grateful to him.
Total Forgiveness is one of the most amazing shows I have ever watched but it's terrifying and sad.
I really like it because it feels like a real show created from their stress and desperation to help themselves. It's very sad but they are using their knowledge and resources to help themselves at the same time making content. We just live in a sad time where student loan debt is content despite the stress they actually have.
THANK YOU! I run a VERY small high school in the US and as a community we decided that our students needed more personal finance literacy, but as teachers we have almost NO training on how to teach it! This is a great jumping off point.
My biggest financial issue isn’t that I don’t know how to handle money, it’s that I simply don’t have enough of it to cover even just basic needs, and have no way of getting more. I’m disabled and can’t work, so I’m on SSI, which has a maximum of $943 for a single person but hardly anyone gets the maximum about (I don’t) so I’m expected to live off a few hundred dollars a month, forever.
To be fair, these types of advice are for mostly for the general audience (who tend to be able bodied but feel lost about how to handle their money). For your situation you'll be better off looking for content that specifically covers it (rather than general advice which doesn't apply) or trying to talk to organizations in your country who work with disabled people and can advise you about your situation.
@@lilowhitney8614 just sharing my experience 🙂 The reason I mentioned it is because I feel like a lot of financial advice is operating on people actually having enough money to begin with, and while the disability part is unique to me, this type of financial struggle is becoming more of a problem. It’s definitely good basic advice and a good video, not discounting that at all, just trying to share another point of view that it’s not always that simple. And also to hopefully raise more awareness about SSI as a lot of people don’t know and are surprised by it
If you've been on disability for awhile, you can look into things like Medicare and their supplements or advantage plans to help cover medical, dental, and eye care. There are also many programs that offer extra help like Rx plans, necessity spending cards, food stamps, rent and utilities assistance, etc. If you're able, I'd reach out to an insurance agent that specifically specializes in that sort of area. I do it for a living and do my best to take care of everyone since my dad is also disabled and the disabled community is very underserved
And if you did decide to start earning some money to cover the gaps you lose the ssi completely.
For the entirety of the sponsor segment I was crying at how amazing the segway was
In grade school math class, we played a game where every one had 10K (simulated) to invest in stocks for a month. Everyone loss money except the dude that didn't buy and kept everything in cash.
Buying individual stocks is usually a terrible idea so yeah
first of all, the more risk you are taking on, the more reward. so if you do some less risky things you have less chance of losing money. also, you need to have diversity. investing in 100 okay things is better than investing in one bad thing and one good thing. finally, you are going to lose money, that doesnt mean you should give up. you should invest 1k, if you lose it invest another 1k, then keep going gradually increasing the money invested
I did the same thing in high school and I ended positive. Don't remember how much, though. I didn't know about index funds back then and just chose companies I knew about.
Grade school seems pretty early for that stuff, though. I don't imagine kids that age making great decisions without being given specific advice.
Thanks so much for this video! I never knew how to spend money, just save and let it sit, like you used to. And then when I got more as I got a job I couldn't stop spending!!! It's a hard to find emotional balance, but luckily budgeting and math can help, thanks for reminding me of that.
I'm saving this video for the aging-out foster care program my wife and I are building in LA. Thank you!
Something that I noticed you didn't cover, but I absolutely know messes people up is the "recurring expenses no money" problem, where you signup for something on a yearly basis or every N months.
Very often people treat this as "oh shit I've a €80 bill for my amazon prime this month!! I don't have it!?!?"
The solution is to "amortise this cost", this basically means dividing the total price by the number of months that the cost recurs in. E.g., Amazon Prime is yearly, so you can have a "bills"
account where every month you put in €6,70, and then when that bill comes round, you then have that money!
It removes a lot of irregular stress around money.
In my case, that's basically my budget: all my recurring expenses & how often they recur, both in original currency and local (e.g., domain names are often in USD and exchange rates can mess with you)
In response to "dont spend more than you earn", what about when my needs take up 100% of my income? I'll just die I guess
Yeah, living in poverty really drives home how few people in society really care if you’re housed and healthy or not. Gotta have those people dying on the streets to keep the wage slaves too scared to cause trouble, after all! 😒
There are two sides to the equation - how much you spend and how much you earn. You can either decrease your spending, or increase your earnings. If you can't do either, yeah, you're pretty much f***ed.
There is no magical advice.
"Never believe a single source, consider lots of different viewpoints and a consensus will emerge". That is just a fantastic lesson for many facets of life.
Can you do a video on what school didn't teach you on health care? How to find the best healthcare provider? When should you decline a medical procedure and look for a specialist?
I was taught a lot about money growing up, including in school, but the kinds of things were not the most actionable or sensible ... Like I was taught about making a budget, but not prioritization and getting a sense of my individual values.
7:15 HA!
I was taught to balance a checkbook, you already know how many times I have done that.
@@MegaLokopoMy school made us learn how to use checks in 4th grade when we were like 9. I have literally never written a real check in my life
@@alexreid1173 Same here, And even back then it was clear as day I would never write a check in my life.
@@alexreid1173As much as I write in cursive lol
We didn't just get taught about money in school, we even visited a local bank branch in primary school and a national bank HQ in high school. At the local bank, I was impressed by the brand-new building's pneumatic tube system. After visiting the national bank HQ in Amsterdam, we went to a café, and I remember listening to a former sailor telling wild stories about his life. In other words, these lessons are forgotten because teenagers aren't interested in learning financial responsibility - even less than factoids about the Queen.
Regarding the strategies at 17:52 I’ve been using the second option. It’s incredibly satisfying to eat away at the smallest loan and snowball that momentum
Might be a weird corner of my world, but thanks for not mentioning Dave Ramsey for this whole video. Really means a lot.
For anyone living comfortably, living with their parents, a little younger, or just not living in America, Johnny Harris made a very eye-opening video about what it's like to live at different levels of income, and now I can't help but think of the 50/30/20 thing as a luxury thousands of people can't really afford.
We aren't comfortable planning our financial futures because we don't feel like we have one to look forward to. All we can do is our best. That doesn't provide opportunity for retirement though.
My focus is on making sure I have enough of a buffer to not end up homeless in any foreseeable situation. That leaves no opportunity for me to even get the continuing education that I need to go for my actual career goals. They're society benefiting career goals, not financially benefiting ones. So loans would just tank my entire life and increase the destitution risk rather than decrease it.
Thought this video was exclusively about the school system’s failures, but was pleasantly surprised with where it went.
I used to stress about money, and I'd scrutinize my spending trying to make sure I was still saving money as well as getting my needs met, often seeing that I spent everything I earned or close to it, and then I started making more money and realized that life and finances are much MUCH less stressful when you actually make enough money. Learn about budgeting all you want, but the problem is society isn't supporting a large chunk of our population, and no amount of penny-pinching changes that. Remember that in the next election cycle.
Yep; when my husband died last year, my costs went down but the amount my family got from social security (he had been on disability prior to his death) went UP! So, yeah, I can pay my bills much more easily now, go figure… this makes me very uneasy, as many people who end themselves “believe” they are a financial burden to their family… that may often not just be a “belief”… 😬
Taha, big kudos to the actually hilarious way you scripted and edited this video. I feel like you've stepped up your game, but the way a kid tries to step up as many steps in one stride as possible to beat their older siblings to the top. In any case, wanted to point out it's noticed, it's appreciated, and I can't wait to see more of this wonderfully dryly chaotic energy! I love how each presenter on this channel is allowed to have their own unique video style that they can make their own ❤
In my high school, we had a semester of a class called "Consumers Education" that delved a bit into personal finance, the only rough part was that it was trying to get 14-year-olds to take insurance premiums and blue chip stocks seriously
I’m so glad you promoted Total Forgiveness, it’s one of one of my favorite shows and it’s such an important point that it touches on. Everyone watch it, get a trial of Dropout and watch all of it, it’s awesome.
This is why i love you guys!
What a great helpful introduction to clear our heads and give us some sort of "north" as to what to do. Everyone around me says stuff like "you should know that" and never bother to explain things, this video literally comes to me at a perfect timing as i just graduated, got a job and have realized that I'm constantly stressed with anything money related because i don't know what to do when i have it, when i dont, and when i need it.
"if you like bad news, I've got good news for you" is gold
Watching this video after just setting up a budget and having to figure out how to do it all by myself hits different
There are a lot of things related to personal finance that we learn in school. Even something like the difference between exponential growth and linear growth is something that's often taught using money in its examples.
That can be an important understanding to have when it comes to investing, but most people forget about it after their exams, because they're just not interested in it enough to retain the information.
School isn't to teach you how to be a good citizen. It's to teach you how to be a good worker.
Facts.
"I don't want a nation of thinkers, I want a nation of workers."
-rockefeller
Good slave*
A mindless worker is a happy worker
Shut up and do your job
@@Mix1mum Heh. I've been fired from plenty of jobs precisely because I won't do that.
that sponsor transition was SMOOTH
The fun fact with debt, is that sometimes it's better to take debt even if you have the money, because you can use the money to make a bigger interest than the interest of the debt you would take.
That's an extreme limited case.
Almost every debt will cost you MORE than what you "make out of it".
@@guyman1570 That's not true.
Debts like student loans or mortgage will not necessarily cost you more. It's a more complicated and neuanced approach to investing and should only be exercised if you know exactly what you are doing. This will not always be true.
Also these kind of things are generally more accessible to the rich, which usually have a lot of debt.
"If you like bad news, I have good news! It gets worse."
Y'all just made my day!🤣
I agree. As an american i too wasn't properly taught about money. Instead i felt like they focused way too much on paper writing, obscure history, and facts about the queen.
This might actually be one of the most important youtube videos I've ever watched. thanks taha :)
The thing about finances is that they're full of contradictions, like don't use credit cards, but you can't get a place to live without a credit history, so you have to use credit cards. 50% for needs? well, your rent is 200% of what your job pays so you need to work 2 full time jobs just for that. Your investment needs to pay off in 20 to 30 years, but the company you work for wants to see returns every quarter or else you lose your job, your wages stagnate, or you work more for less. It just doesn't work out, unless you get lucky. And here is where everyone says you need bootstraps and not realize what they are saying is a contradiction to many others' lived experience.
They said "don't use a credit card if you know you will misuse it".
My financial plan: fake it till you make it.
One thing that I am really grateful for after growing up in Utah is that this state requires everyone to take a Financial Literacy class in High School. I feel it was inadequate but it did give me some basics with regard to keeping a budget.
"the financial education you received in school was probably outdated, so let's fix that! you should be spending 50% of your income on necessities" yeah chief that was already outdated 15 years ago lol
People are lucky to be spending less than 50% of our income just on housing! 🫠
I get what you're trying to do here Taha, but you fall into the trap that everyone says when talking about good money habits, and that would be: "don't be poor."
The federal minimum wage in the US is $7.25/hr. So if you work a full time job (40 hrs/week), we'll say 4 weeks in a month to make it easier to calculate, that's $1160 a month. Now lets take out a VERY conservative 15% in taxes (again, just to make it easy to calculate) you're looking at $986 per month.
So with the 50/30/20 rule, that's $493 for needs. Average rent in the US is $1700 (first result on google). So i hope you like sharing what is likely a 2 bedroom apartment with 4 other people.
Now, you could get another job, sure, but then you have to decide if that work life balance is worth it.
Exactly.. "just earn more money than you spend" lmao just don't live in a house or eat food every day ig...
My needs are 80% of my income and I dont buy clothes.
I totally agree with this comment, even his qualified financialist touts the idea that money takes time through small investments is narrow in the idea that many college students like Grant and Ally scraping by don't have luxuries of investable income or the prospect of time or a future.
I get he's trying to do the basic catch up of good financial investment but schools don't want that because it doesn't help the schools past good college acceptance. That's what they go for as it's what gives money toward school programs from govts. I'd much rather a break down of school's intentions how we can break that cycle rather than another fast and broad finance 101 video. Even before the ad break, I get side hustles are good for more income obviously but this is the unfortunate problem of accepting the normalization of underpaid jobs like teachers, grocery stores, and other essential positions.
Exactly, spot on. My financial problem isn’t I don’t know how to handle my money, it’s that I simply do not have enough of it
In Arizona, the minimum wage is $13/hr.. so just moving to another state has *doubled* your income... and average rent in Tucson for a 1 bedroom apartment is $977.. so you've also cut your living expenses in half. Amazing.
I actually was taught about money in school by multiple teachers. For example, one class I had in middle school had us take a budget and see what you could buy to live of. But hey, I'm just one random Texan that probably got lucky this was during the 2010's
At least at my high school financial literacy was a required course. Though it might not have been the most comprehensive class, it was better than nothing.
We did a similar budgeting project (and oddly, it was in a theology class? I can't recall why we did it in that class, but it's better than nothing). My main take away was "wow, it costs so so much money to live a basic life, and that's assuming you're doing everything you can to save money, earn money, and not buy things I want all the time. If one things goes wrong in life (injury, accident, natural disaster), I'm basically stuck in debt forever."
Okay the 5th “and facts about the queen” finally got me 😭
Man, I came to the comments to see people's life stories and how they relate but I'm so early there's no comments😭😭
fr XD
True
Bro you're so early that you haven't watched the whole vid yet, chill.
@@fahrenheit2101 to be fair while I watch videos I look in the comments section
There's Grant
I am in my 20s and naturally am not gaining that much mone yet. I started doing the envelope thing some years ago. Simplest trick, but never failed me. There is something about touching the money you spend in order to grasp (no pun intended) how much it really is - also this way, youre not overspending. And no need to note how much you spend on what etc., which I often forgot directly after spending, because I never have time for such things after coming out of a supermarket.
I'm of two minds on this video. On the one hand, I think it's a worthwhile topic, and explained in a straightforward and entertaining way, probably a good starting point that someone can build off of.
On the other, it seems to be pointedly avoiding talking about one of the biggest challenges when it comes to finances: predatory financial practices and hostility built into the system. Technical jargon used to make a system opaque so that regular people can't navigate it. Otherwise optional purchases made mandatory by laws or circumstances, often controlled or at least influenced by people making money off of the fact those needs are inflicted on people. Debt structures that are deliberately obscured so they're harder to get out of, because the longer you're stuck in debt the more money made by the company you owe while they neither need to put in any effort or provide any value for the money they're making.
I assume it's because understanding all that isn't always helpful, sometimes it's just depressing, and the way someone gets out of a crushing financial situation is by setting it aside for a time rather than confronting it. But the way things are going, I think we're going to need these things, and they're what we'll really need to find solutions for if anything worthwhile is going to happen.
I pointed out that our system takes freshly-minted 18-year-olds with zero adult life experience and within a year can easily saddle them with $50,000 in student loan and credit card debt, whether that ends up bettering their job prospects or not. Then all the budgeting in the world can’t help them! 😕
That 'Dam!' gag was so funny that I actually laughed through the Shopify advert.
"Especially in Europe, where public transit is generally pretty good"
*Cries in Bald Eagle*
I hear the public transit is functional in NYC… you know, that least affordable city to live within an hour’s commute of? That place? 🙃
this was indeed very helpful! it took a lot of the stress around money management for a zoomer who's dying in college, thanks taha
Shout out to my school for having business and finance courses, and my AP Lang teacher for weirdly turning his class into a Microeconomics course.
Like bro had us write a synthesis essay about shopping culture and the manipulation of the lower class via advertising.
I agree with you. But in my case, my high school had a great personal finance class that taught me everything that you stressed is important and should be taught. (I also took a CASH class, which revolved heavily on money management.)
I'm 18, btw.
Graham Stephen tought me everything I need to know about money. I'm like the money guy now to everyone around me, I feel like I can see through the matrix of everything that evolves money
The “if you like bad news i have good news” bit is so funny.
gran turismo 3 and 4 taught me more about money than my high school financial education class. yes, you read that correctly, gran turismo. not grand theft auto, gran turismo. you will be forced to learn how to budget your races with your car parts and services and saving money by buying a customizable transmission and suspension etc enabling you to enter that one-time purchased car into a broader spectrum of races and tournaments, and for whatever reason all of those challenges somehow translated into real life budgeting for me. i dont know how, it just did.
Practical advice. When I started out, I made very little. I took 2nd and even 3rd jobs. I spent less, when I had no free time, and used the extra income to build 1 month worth of emergency funds, then did a debt snow ball to eliminate my debt. I still have a mortgage, but no other debt, despite having 2 kids along the way. It seemed hopeless at first, but looking back over the last 10 years, I'm glad I passed on fancy things and am proud to be debt free. You can do it!
This video is a solid miss. The 20/30/50 is a beautiful concept, from a time when life was different. Learning personal finance does nothing if you don't have the personal finance.
Exactly
No amount of financial education can fix increasing socioeconomic inequality.
Yeah, little to no mention of systemic issues and the comment section is toxic as hell. The vast majority of this video is only relevant to people making far above their local median income as median rent at best is about 50% of median income in US cities, let alone all other necessary expenses.
That's why 'be realistic'
I'd argue that's why they dnt teach it to us in school. It's too readily apparently b.s.
This video is so visually stimulating I forgot what I was watching it for...
This was the most sincere, honest and informative video talking about money I have seen in a while if not ever. It's nice to talk about the shame we feel around debt and also trying to use our money to feel happy. Thank you! :)
If I got a penny every time, this man said the queen, I would be a millionaire
That’s some true facts about the queen your speaking
my cousin taught high school economics, never heard of the money multiplier. it was personal economics, taught kids to get loans and credit cards. merika school system, teach 'em what you want 'em to be
American viewer here--I have some topics/questions to ask about.
1) Sometimes there is a sense that no matter how careful we are with money, all it takes is one accident or one illness, and all the savings will be gone. When you'd have to give up or adjust some of your needs to be able to save at all, it starts to feel like the better bet is to just take care of the need now and worry about creating cushion in the future. This seems especially difficult for things like if you need counseling or physical therapy--anything that requires repeat appointments where the cost never ends. You may have to choose between one treatment and another. People may avoid getting therapy because the cost stresses them out so badly, when the therapy might be the thing that helps them stabilize and start feeling less anxiety about managing money (note, I did say "might").
2) How do we know what to buy in terms of insurance products? They seem complicated on purpose. I work for an outpatient medical practice in my area, and the entire customer service part of my job is helping people to understand their health insurance terms. It shouldn't really be that most people are only starting to understand health insurance when they're already at the doctor's office coming to get the care. Also, insurance companies are so predatory. It feels like we have no leverage and they can do whatever they want to us.
How do we move the conversation so that everyone in the world recognizes healthcare as a human right rather than a business?
NPR's bill of the month shouldn't have to be a thing.
Also, I don't know how many people can relate to this, but the "conversations around money" in my family have always been things like "I am seriously worried that my body doesn't have enough labor years left in it to afford all the dental care I already need right now" and "well, if the utilities bills get to a certain point of delinquency, maybe *then* we can negotiate with the utility company to slash the total amount or offer a manageable payment plan." It's like we only talk about it when there's no money left and we're suffering hardships because of it. wheeeeeee trauma dump
I talked with my mother about how I was over $20k in credit card debt that then got wiped out within the first 5 months of the pandemic, because my family stayed home and did nothing while money was dumped on our heads repeatedly for those 5 months; seemed prudent to take the opportunity to pay off that debt! Then my husband finally got disability and we paid off HIS credit card from long before we even met and got a car that didn’t break down every time you looked at it the wrong way. My mother told me she would have helped me if I would have asked. Yeah, and reminded me of it for life, treating me like a bum on the street or thief, prying into my personal finances and telling me what to do with my life because “It’s MY money you’re spending!”. Yeah, played that game for a while, no thank you, I’m good now. A lot of millennials probably relate… 🤦♀️
Once I was complaining about this exact thing to, of all people, an accountant. I was like "if I were taught in school about this stuff I wouldn't have to feel so stressed and I would actually have more control over my finances". And his response was, simply, "if you were taught all of this in school, I'd be out of a job". I've never wanted to punch someone in the face more than that time...
We did quite a few life skills lessons in school, including budgeting, resume writing, and how taxes work. I also remember everyone blowing off those lessons.
I have really great insurance but i still blew through like $15-20k once I became afflicted with cancer over the last 2 years. so no, my dude, it isn't as simple as insuring against things you can't control. Insurance deductibles are crazy and they find every single way to nickel and dime you on top of that there are TONS of things they outright just don't cover (for instance, my assisted living nurse when i had a radical double mastectomy and complete hysterectomy) there was no way I could take care of myself but they assume if you aren't elderly you have parents or a spouse that can so BAM no coverage for assisted living for about two weeks that i needed it guess how much that costs! and then when you have to go to a specialist in another state for certain cancer treatment, insurance sure as hell doesn't cover travel or lodging (which they only cover the hospital for days you have to stay for active treatment like chemo or rad). good bye my life's savings while trying to save my life. no wonder so many people avoid going to the doctor and choose to die instead of going into debt, at least you suffer less if you just die.
My husband was covered by Medicare AND Medicaid and I still was charged close to 10k in medical bills after he died of cancer last year! I wouldn’t be surprised if just his medical care the last 3 months of his life cost a million dollars! And of course that doesn’t include the gas I burned visiting him in the hospital, the income I lost because I had to be home caring for him, the extra I spent on convenience food because I was putting all my time and energy into trying to keep him alive… a very common cause of bankruptcy in America is STILL medical debt! Oh, and I got a couple new bills recently, over a YEAR after he died! FFS! 🤬
this is a really good video in a lot of ways - honestly i think Taha and Melissa have some of the best videos on this channel (and in fact the entire internet, and i mean it!) - snappy editing (joe's work speaks for itself), facts about the queen, and a very decent introduction to quite a challenging topic. i do want to highlight how dangerous the advice to invest in property is though, people investing in property contributes to the housing crises and cost of living crises that so many of us are currently struggling with, especially in the UK, Australia, Canada and US. people make speculative investments in housing, something that should be a human right, because they are told repeatedly it's essentially a risk-free investment. i hope you can see why some of pete's comments have left a sour taste in my mouth in this video.
i see a lot of comments have brought up other issues and i hope you aren't discouraged in any way from continuing to create videos like this one! but i hope you find an opportunity to reflect on the power and influence your words have as successful creators.
Percentage rules may work as rough guidelines for people with median salaries, but for anyone with low or high income, they are pretty useless.
Even if most expenses have a range (cheap vs expensive car), there is always a lower boundary that you cannot cross. Or a tradeoff where you need to spend much more time/energy to save money (cooking vs takeaway, walking vs driving, ...). Which then means you may have less time/energy to earn money as well (which may include studying for a better job).
Yes; time and energy are also finite resources, but talking about those leads to accusations of being “lazy” and stories about how people managed to work full-time night-shift jobs and still ace college. Well, kudos to you, not everyone can do that! 😒