@jquick Assumption that I would make is that EmmaP is one disciplined young woman. From her responses to some of the posts, she's also a thoughtful, decent person. I only hope that I can teach my own daughter a fraction of these traits... I've been lucky enough to come across many young people like EmmaP. So much for the caricature of the entitled millennial.
For me, it was behavior more than knowledge. I did not begin to save until my mid-30’s. It wasn’t for lack of information. My undergrad major was economics and I had taken a personal finance class with a brilliant, funny, and dynamic professor and to this day remember some of his class presentations. I did not capitalize on this knowledge for a long, long time. It took me almost 15 years after graduating before I began to save in any meaningful way. What changed was my behavior rather than my knowledge base. It was a sort of a gradual awakening and I stopped rationalizing my financial behavior and stopped counting on magical solutions regarding finances. It’s the classic two marshmallow problem. I’m lucky that I somehow went from a one marshmallow young man to a two marshmallow middle aged one.
@calamity You are 100% right. These small amounts do add up. Not very fast nor to enormous amounts but they add up nonetheless. A little over 10 years ago, I started a 529 plan for my daughter with the contributions from the Fidelity cash back card paying back 2%. I also started an auto deposit of a nominal amount as not to get charged an account maintenance fee. I contributed $5.7K over the years in “real money.” The account is at $23.6K largely due to the cash back contribution and appreciation. What I wanted to do was to conduct a real life experiment in saving, investing, and capital appreciation. Due to the volatile markets the return has been only around 7% annualized over the years but considering my real contribution the return is more like 27% annualized. The account is only going to pay for a year of college (if that) but I’m looking forward to being able to craft some money lessons for my daughter based on this experiment.
Jake, This is a pretty important insight. Our behaviors have fundamental biological basis which make changes difficult for many people to make lasting changes. Substance abuse occurs often because the drug of choice makes us feel good through producing neurotransmitter that enhance our feelings of well being. Over time, as a coping mechanism, this stops working because more and more of the substance is needed to produce the same amount of neurotransmitters. Certain activities impact the production of neurotransmitters such as dopamine. People with low levels of dopamine are prone to excessive shopping, gambling, and drug and alcohol abuse. Your insight is crucial because the behavior cannot change unless the underlying biology is addressed as well. Diet, exercise, stress management techniques all help. In some cases, medication may be necessary. I agree that environmental factors set many people up to succumb to abuse and destructive financial habits but diverting attention and efforts to those issues as paths for recovery is ultimately fruitless and in many instances counterproductive as they increase frustration and levels of stress. It’s difficult to find the solutions or techniques that will work for us as individuals. My battles with alcoholism and financial profligacy have thought me to respect all who choose to fight the good fight. Sounds like you are well on your way. Good Luck to you and know that the fight can be won.
How ACA is playing out is just fascinating. If people (in general) support policies that benefit them, you’d expect that young people would be absolutely opposed to this law. Conversely, you’d expect older people, especially ones with chronic medical issues to be supportive. I’ve found almost the opposite to be the case with young people generally supporting and older people generally opposed to it. One big exception in the “young camp”seems to be information rich consumers with specific needs that they were able to address in the pre-ACA marketplace (garysixpack and pokeable.) Other than these people who were inclined to research what is optimal for them, most reactions and attitudes toward the ACA from a consumer perspective is baffling to me. Some may argue that young people are uniformly altruistic and have a preference to subsidize older folks and that maybe the older people are too proud to take the handouts from their children’s generation. But most arguments from young and old alike tend to be economic ones. Both groups almost invariable talk about the ACA in terms of economic impact to them long term. Just fascinating…