Episode 8: How Do We Teach Personal Finance? Insights from a Teacher
- What got Matt Matheson of Method to Your Money Started on the path to debt freedom
- How long it took to pay off $30,000 of car debt
- What financial goal Matt and his wife are working on now
- How they paid for their wedding in cash
- Why Matt started Method to Your Money
- Matt’s best advice for those with debt
- Evil vs Awesome: Financial New Years Resolutions
- How Matt ended up teaching personal finance to 5th graders
- Evil vs Awesome: Star Wars Franchise
- Nudge:Improving Decisions About Health, Wealth, and Happiness by Richard Thaler
- Method to Your Money | Facebook | Twitter
Today we are thrilled to have a personal finance blogger and assistant principal with a passion for teaching and inspiring methods and mindsets for people to crush their finances! Welcome to the show, Matt Matheson of Method to Your Money.
What got you started on the path to be debt free?
When got engaged and fiance wanted him to know more about personal finance. Both my wife and I are savers, but when we got married we both had a lot of car debt. We had about $30,000 of car debt.
So one of the things we did was get involved with Dave Ramsey stuff and started working through the baby steps. Set up a budget which was huge and started throwing dollars at our car debt.
A big thing was that our lifestyle hasn’t gotten more extravagant, so we haven’t seen any big lifestyle inflation. So whenever got a raise or a promotion, we’d still go out to dinner to celebrate but we didn’t overall let that lifestyle inflate.
We fired all of our cash towards the debt and after that we were able to put together the emergency fund. Which has been huge in providing us peace of mind.
How long did it take you to get that debt paid off and the emergency fund saved?
It probably took us about two years to do all that. I ended up selling one of the vehicles and used the proceeds to buy a used vehicle and put some towards savings.
Another thing we used is when we got tax returns we used that money to help us take a bite out of the debt we had.
Working on Funding Kids’ Education
Feeling good about what we have saved for them. We are also saving towards retirement with our teacher pension plans and we also have a tax free retirement account on top of that, that we use to save for retirement as well.
Then we’re working on paying down the mortgage, somewhat less aggressively then we did our car debt. Just making regular mortgage payments because we are cash flowing his wife’s master’s degree.
How Did You and Your Wife Pay for the Wedding?
We cash flowed the wedding with help from parents in the form of gifts. Did the wedding under budget and used money we saved to help furnish our house.
We were able to come through it completely without debt and wife was super frugal when it came to the wedding. Got married on a Wednesday night, making the venue far less expensive. We also did appetizers rather than a big 3 course menu.
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Evil vs Awesome: Financial Resolutions
- Sometimes the goals can be too lofty
- Hope without a plan is just a dream
- Require a firm plan in place for those specific goals
- To be successful must surround yourself with people who will hold you accountable
- Hope that comes with resolutions and the new year
- Like the concept of goal setting
Overall: Not good
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What made you start Method to Your Money?
Wife had come to me and asked me to learn more about personal finance, it would make her feel more comfortable, so I just dove in. And I caught the personal finance bug, I loved it. I’d read everything I could get my hands on and then read the other books the book would reference.
Starting having conversations with my friends and talking to my friends that were financial advisors and it just snowballed. I started thinking in my mind it would be cool to teach these things, started throwing around the idea of teaching a class and then decided to start a blog.
Wife had a started a blog a few years prior which gave me a little bit of an idea of what to expect. I just learned the stuff and got it up and running. And my goal is really just to help people, like I said I see the number out there of people who are struggling out there and drowning in debt and it’s really sad. It’s a huge stressor and I want to help people with their finances.
What is Personal Behavioral Finance?
It’s a relatively new field of behavioral economics which is the study of the psychological, neurological reasons behind why people make the decisions they make with money.
Budgeting, debt, and saving are kind of the how, but personal behavioral finance is the why?
It’s really only emerged in popular culture in the last 5 years. A great read is Nudge by Nobel Prize winning economist, Richard Thaler. The book talks about something called choice architecture and how our choices are framed can impact the decisions we make.
It’s challenging people’s perceptions about actually being rational. People do not make decisions that are in their best interest. So that is something I’ve been looking at, what is happening behind your money?
What advice do you have for people paying off debt right now?
The biggest thing is that the budget is an absolutely critical thing to getting out of debt and saving. So don’t think about it as “budgeting” think about it as giving your money a job and telling it what to do.
There are different levels of budgeting. I can be type A and wanting to know where every dollar goes. Whereas my wife likes to major in the majors and minor in the minors. The first thing we do is give, the second thing we do is save. It’s automated, it just happens, I don’t have to think about it.
One thing I would encourage people to do is to automate things that you really want to achieve when it comes to those keystone goals. Don’t wait until the end of the month and try to use what is left over.
Remove any barriers to making wise choices, and a huge barrier is having to make it every month. Much easier to just automate it that month. Do it before you’ve done anything else with your money.
Melissa: I use Qoins to help me pay off my debt without having to work at it.
How did you get started teaching personal finance to kids?
Right now I’m an assistant principal in a school, when in the classroom taught science and there wasn’t a natural fit to bring in teaching personal finance. Then when I transitioned to administration, started talking to teachers about integrating some of the concepts into different classes.
However, it wasn’t until I moved to my current role that I was able to really implement this. At my current school we have what is called an options class where every other week students have an hour to learn one of these options classes.
And we have different options, we have for example, a robotics options class, design, etc. The one option I wanted to run was personal finance. And it was met with mixed reviews when I brought it up, but got the support of the principal and it’s been great
How do you make personal finance age appropriate and understandable?
One of the things that I did was realize I needed to make it fun, so not like a traditional personal finance class. Right from the start I wanted to design a class that would be highly interactive.
I found lots of apps and games the kids could use to make the personal finance applicable and I branded it, called it Money, Money, Money, rather than personal finance. Setting the tone to build a level of excitement. Started the class asking, if you had a million dollars what would you do with it.
The responses were well thought out and had a great conversation about spending. The difference between wants and needs and then naturally flowed into investing. The idea that you could make money while you sleep and it really got their attention.
The way I have it set up is that I try to set up to curricular objectives, math, career, and technology objective. I have them do different questions through the class via Google classroom, which is where the assessment piece comes in. It’s run in 6 week intervals.
Adults are often times bored by personal finance because they know their finances aren’t in great shape, but kids aren’t jaded yet. At this point money is still something exciting at this point, it hasn’t taken on that negative connotation yet.
The kids are loving it, they’re eating it up.
Evil vs Awesome: Star Wars
- Can be confusing with it being out of order
- The most recent one is fun
- Family friendly, not gory
What do you think?