As part of Financial Literacy Month (#FLM2018), I will be featuring interviews with fellow bloggers to get their take on the subject. Please join me in welcoming Jim Wang from Wallet Hacks.
Please tell me a little bit about yourself and your blog.
Jim Wang: I’m a thirty-something software engineer who stumbled into my entrepreneurial journey of being a personal finance blogger. I started my first blog soon after college when I was trying to figure out how money worked while working my first full-time job. I remember being handed a thick magically stapled employee handbook that explained all my options at Northrop Grumman, including a then-complicated math equation for my 401(k) employer match contributions, and I realized that I didn’t really understand it. I happened to experience this around the start of blogging and WordPress, so I decided to start a blog. Fast forward about fourteen years and my new blog, Wallet Hacks, continues that tradition of trying to understand money (though I know more now!) by demystifying it for myself and, hopefully, for the folks who read it!
What type of financial literacy education did you receive in school? If none what do you believe could be done to change or improve that today?
Jim Wang: I received very little financial literacy education in school. Much of what I learned was from my parents, who themselves had me focus on school subjects but did spend a little time imparting some money lessons to me. I think students would benefit a lot if home economics classes focused more on the economics and less on the home. That being said, I haven’t been in high school for 20+ years and from what I can tell, things have changed quite a bit. I have volunteered a few times in the past with organizations like Junior Achievement, which helps teach lessons to elementary and middle schoolers, so I suspect a sea change is happening even if I’m not experiencing it first hand.
That said, I also think learning the “home” parts of baking, cooking, and maintenance have value too. So let’s not discard the home piece either! The reality is that money permeates everything. If you get the math wrong, it’s hard to do the other things right.
Who’s responsibility is it to teach financial literacy, schools or parents?
Jim Wang: Ultimate responsibility always falls on the parents but we all live in different situations and parents will try their best. Sometimes it’s not possible to teach financial literacy if you’re in a situation where the parents need to work a lot to make ends meet. It’s not possible to each financial literacy if the parents themselves don’t have a good grasp of it. Schools can help, much like they do with subsidized and free lunches, by teaching the basics. We all benefit if our kids learn how to manage all aspects of their lives better, finances included.
We all receive financial advice from people in our lives. What’s the most interesting or useful financial advice you’ve received?
Jim Wang: As a kid, my dad always used a phrase in Chinese that roughly translated to “you take care of yourself” – which meant that if you had a problem, you were responsible for figuring out how to solve it.
If you want to be independent (which every kid wants), then you had to be able to solve your own problems and create situations where you can solve these problems. If you wanted your parents to take care of it, then they would implement and enforce certain rules I may not like. It sounds a little vague but the basic idea is that you had to remember that you alone were responsible for yourself and to prepare that way. It translates into saving for an emergency fund so that if there is an issue, I can solve it without going to my parents for help. If you don’t, then my parents may implement rules I may not like because they’re providing the money.
In reality, my parents supported me without preconditions. however, believing they existed ensured I lived in a way that made it less likely I’d need the support. 🙂
I have several personal finance books I regularly gift. What are your 3-favorite personal finance books you often gift or recommend to others to others?
Jim Wang: I recommend Ramit Sethi’s I Will Teach You To Be Rich because I’ve known Ramit for ages and am familiar with his style, plus his book is very engaging, educational, and something most people will actually read and implement. Too many personal finance books are preachy or philosophical, which makes them hard to use in real life in an actionable way. This has step by step instructions, scripts, and other very tactical ideas to go along with the overall philosophy.
Dale Carnegie’s How to Win Friends and Influence People is a fascinating book that is a bit like a cheat sheet on people and our relationships with one another. If you want to get ahead, it’s important to understand how to share your ideas and build relationships with others in a meaningful way. As the old adage goes, “if you want to go fast, go alone. If you want to go far, go together.”
Lastly, The Millionaire Next Door is powerful because it demystifies the idea of what a millionaire looks like. Especially when you’re young, you mistake fame and popularity with fortune. All the trappings of wealth are just that, traps. There are plenty of wealthy people who live “normal” lives without the flash and you can learn a lot from them.
April is Financial Literacy Month, what are you doing to help promote financial literacy?
Jim Wang: I continue to write and hope to educate folks on good money management practices, how to earn extra income and how not to squander it on the things that don’t matter. I treat every month like financial literacy month. 🙂
What financial advice would you offer to a teenager?
Jim Wang: I’d want them to internalize an idea that has guided my thinking about money for many years – money is simply the control of time. When you start working, you’re turning your hours into dollars. You will need to spend some of that to satisfy some needs, like eating and sleeping, but try to save and invest it so it grows on its own without any more of your hours. As you get older, you’ll earn more dollars for your hours but you should try to save more too. Eventually, that money will earn its own dollars and you will have more and more control of your time. Money isn’t the ability to buy more stuff, it’s the ability to control (buy) more of time. You only have so much time.
What resources, app, blog, tool, etc. would you recommend as a starting point for someone wanting to organize their money for the first time? Why?
Jim Wang: I really think one of the most useful tools is to draw a simple financial map of your accounts and their relationships (https://wallethacks.com/drawing-your-financial-map/). Just seeing it on paper and their relationships can save you a ton of time whenever you make any kind of decisions. Then I’d work towards optimizing it, reducing the junk and putting anything else you might need to establish a strong foundation (https://wallethacks.com/building-a-rock-solid-financial-foundation/).
What financial advice would you give to someone who is struggling with money and doesn’t know where to start?
Jim Wang: You need to budget like your life depended on it. Make active decisions on whether your expenses are being spent in areas that are important to you. Cut what is unnecessary and be brutally honest about it. If you have a Netflix subscription, you are not struggling. If you’ve cut everything, then it’s time to look at income and see if there are areas you can earn more, either at your current job or by taking on a second job, so you get more breathing room. Once you build up a cash cushion (ie. emergency fund), then you can look to start investing so your money works for you. It all starts with budgeting though, you need to make more than you spend or you’ll always be digging yourself into a deeper hole.