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Several scenarios described in the article made no mention of someone else paying the bill or providing funding to the person but the results showed the same sc

Several scenarios described in the article made no mention of someone else paying the bill or providing funding to the person but the results showed the same scrutiny of their purchasing decisions. And I would have thought this goes without saying but a person generally cannot financial-plan their way out of poverty. Poverty isn’t from lacking financial discipline it’s from lacking financial resources and opportunities. It’s impossible to fund a savings account when your income is just barely enough to keep a roof over your head and food on the table.

zozbot234 6y ago
> Poverty isn’t from lacking financial discipline it’s from lacking financial resources and opportunities. ¿Por qué no los dos?
- cgriswald 6y ago
  For starters, discipline is about choices and if you have no choices you can’t have discipline. Secondly, in the rare instance you do have a chance to make a choice, you lack both the requisite knowledge and the practical skill. Thirdly, in that rare instance that your physical needs are met, you’re still struggling with a lot of unmet mental needs which either make rational financial discipline difficult or in which the rational choice is to “splurge” to maintain your sanity. Fourth, even if you do make the “correct” choice and say, open a savings account, there’s a fair chance you’ll be raiding that savings account the following month to meet your needs anyway, which not only defeats the purpose but makes financial discipline seem pointless; which it would be.
WalterBright 6y ago
> Several scenarios described in the article made no mention of someone else paying the bill or providing funding to the person "These last findings have worrying implications when it comes to thinking about charitable donations or how resources are distributed to the less fortunate, write the authors." > Poverty isn’t from lacking financial discipline it’s from lacking financial resources and opportunities. My father (Air Force) once told me that the AF had difficulties with the privates living on the base, in that half of them couldn't pay their bills. He was ordered to investigate and fix it. He said the problems were due to how they spent money - they'd spend their paycheck as soon as they got it on steak and booze, then would have to beg, borrow, etc., towards the end if the pay period. The guy who taught the accounting class I took used to be a used car salesman. He said poorer people invariably took the worst (most expensive) financing option. He'd explain to them over and over why it was bad, and they'd just accuse him of trying to cheat them. Frontline (I think it was Frontline) ran an episode a few years ago about a company that offered a 401K plan to all its employees, from the janitor to the CEO. They found that the investment percentage returns for the employees varied by their salary - the higher income people got better results from the company plan. This is despite everyone got the same plan, some were better at investment choices. A colleague of mine at work years ago complained bitterly that the company had him over a barrel, salary-wise, because he could not afford to change jobs because of his bills. He was wearing expensive clothes, had a new car, a new house, etc. His chains were of his own making. And lastly, the primary buyers of lottery tickets are poor people. Lottery tickets are probably the worst investment out there. (They'd do much better buying fractional shares from a discount broker.) It's a tragedy that the public school system teaches nothing about accounting, budgeting, how to run a simple business, etc.
- nybble41 6y ago
  Not to disagree with anything else you've said, but regarding: > It's a tragedy that the public school system teaches nothing about accounting, budgeting, how to run a simple business, etc. At least some do. The curriculum at my public high school included an economics course which covered (personal) accounting and budgeting in some detail—both theory and practice. IIRC we also did some simulated investing and spent some time on the basics of running a business. The lottery is indeed pretty terrible as an investment, but I expect most people who participate see it more as a form of entertainment. It's not my thing, but a certain amount of money budgeted for entertainment and/or hobbies is perfectly reasonable and I'm not going to criticize how that money is spent so long as it makes the spender happy and all the critical expenses are paid.
  - WalterBright 6y ago
    Well, I find the stock market entertaining, too, even though I make very, very few trades. There really isn't much of anything happening in the lottery business (it rarely makes the news), so I can't see much entertainment in it. With stocks you can watch your net worth gyrate around minute by minute :-)
- elliekelly 6y ago
  There are many opportunities to volunteer helping low-income people with budgeting and finances. I would encourage you to sign up as a volunteer for one of those programs. I’ve done work with the IRS VITA program to counsel low-income families on tax planning and budgeting how to “best” spend their EITC. You might need a legal and/or tax background to volunteer solo with VITA but there are lots of opportunities to sit in on client intake and budget planning/coaching. You’ll see first hand that poor people aren’t stupid when it comes to how they spend their money and they aren’t making irrational financial choices. It’s comforting for those of us who are financially secure to think that we’d be able to use our superior knowledge and business acumen to get out of poverty but I can assure you that comforting thought isn’t based in reality. And in the exceedingly unlikely event that you are as skilled financially as you believe yourself to be then you should be sharing your knowledge far and wide with those in need.

zozbot234 6y ago

> Poverty isn’t from lacking financial discipline it’s from lacking financial resources and opportunities. ¿Por qué no los dos?

cgriswald 6y ago
For starters, discipline is about choices and if you have no choices you can’t have discipline. Secondly, in the rare instance you do have a chance to make a choice, you lack both the requisite knowledge and the practical skill. Thirdly, in that rare instance that your physical needs are met, you’re still struggling with a lot of unmet mental needs which either make rational financial discipline difficult or in which the rational choice is to “splurge” to maintain your sanity. Fourth, even if you do make the “correct” choice and say, open a savings account, there’s a fair chance you’ll be raiding that savings account the following month to meet your needs anyway, which not only defeats the purpose but makes financial discipline seem pointless; which it would be.

WalterBright 6y ago

> Several scenarios described in the article made no mention of someone else paying the bill or providing funding to the person "These last findings have worrying implications when it comes to thinking about charitable donations or how resources are distributed to the less fortunate, write the authors." > Poverty isn’t from lacking financial discipline it’s from lacking financial resources and opportunities. My father (Air Force) once told me that the AF had difficulties with the privates living on the base, in that half of them couldn't pay their bills. He was ordered to investigate and fix it. He said the problems were due to how they spent money - they'd spend their paycheck as soon as they got it on steak and booze, then would have to beg, borrow, etc., towards the end if the pay period. The guy who taught the accounting class I took used to be a used car salesman. He said poorer people invariably took the worst (most expensive) financing option. He'd explain to them over and over why it was bad, and they'd just accuse him of trying to cheat them. Frontline (I think it was Frontline) ran an episode a few years ago about a company that offered a 401K plan to all its employees, from the janitor to the CEO. They found that the investment percentage returns for the employees varied by their salary - the higher income people got better results from the company plan. This is despite everyone got the same plan, some were better at investment choices. A colleague of mine at work years ago complained bitterly that the company had him over a barrel, salary-wise, because he could not afford to change jobs because of his bills. He was wearing expensive clothes, had a new car, a new house, etc. His chains were of his own making. And lastly, the primary buyers of lottery tickets are poor people. Lottery tickets are probably the worst investment out there. (They'd do much better buying fractional shares from a discount broker.) It's a tragedy that the public school system teaches nothing about accounting, budgeting, how to run a simple business, etc.

nybble41 6y ago
Not to disagree with anything else you've said, but regarding: > It's a tragedy that the public school system teaches nothing about accounting, budgeting, how to run a simple business, etc. At least some do. The curriculum at my public high school included an economics course which covered (personal) accounting and budgeting in some detail—both theory and practice. IIRC we also did some simulated investing and spent some time on the basics of running a business. The lottery is indeed pretty terrible as an investment, but I expect most people who participate see it more as a form of entertainment. It's not my thing, but a certain amount of money budgeted for entertainment and/or hobbies is perfectly reasonable and I'm not going to criticize how that money is spent so long as it makes the spender happy and all the critical expenses are paid.
- WalterBright 6y ago
  Well, I find the stock market entertaining, too, even though I make very, very few trades. There really isn't much of anything happening in the lottery business (it rarely makes the news), so I can't see much entertainment in it. With stocks you can watch your net worth gyrate around minute by minute :-)
elliekelly 6y ago
There are many opportunities to volunteer helping low-income people with budgeting and finances. I would encourage you to sign up as a volunteer for one of those programs. I’ve done work with the IRS VITA program to counsel low-income families on tax planning and budgeting how to “best” spend their EITC. You might need a legal and/or tax background to volunteer solo with VITA but there are lots of opportunities to sit in on client intake and budget planning/coaching. You’ll see first hand that poor people aren’t stupid when it comes to how they spend their money and they aren’t making irrational financial choices. It’s comforting for those of us who are financially secure to think that we’d be able to use our superior knowledge and business acumen to get out of poverty but I can assure you that comforting thought isn’t based in reality. And in the exceedingly unlikely event that you are as skilled financially as you believe yourself to be then you should be sharing your knowledge far and wide with those in need.