Why?

‘Why? Why? Why?’

As a child, I was constantly asking ‘Why?’
Of course, my father or grandfather would respond ‘Why is a crooked letter.’
It wasn’t until some time later, when I learned to form letters myself, that I understood this wordplay.

Like many who begin their blogs with this same anecdote, I never really stopped asking ‘Why?’ Continue reading “Why?”

What is financial literacy?

In 2009 and 2011, Americans and Australians respectively were asked five ‘basic’ financial literacy questions. Only 43.8% of the Americans and 36.5% of the Australians managed to get all five correct. And it’s not only ‘average’ Americans and Australians – a 2002 survey of 530 online investors, who we might expect to be more financially savvy also found that half could not pass a simple financial literacy test.

But what is financial literacy?

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How is money like language?

“‘Money talks’ because money is a metaphor, a transfer, and a bridge. Like words and language, money is a storehouse of communally achieved work, skill and experience… money is a language for translating the work of the farmer into the work of the barber, doctor, engineer, or plumber” (McLuhan, 1964).

There are many metaphors for money. We talk about money and related financial concepts as solids (eroding capital, cutting budgets), liquid (pooling assets, pouring money into an investment, the farce of trickle-down economics), and even gas (inflation). But McLuhan suggests that money itself is a metaphor – for example, for work.

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How do we learn to speak money?

Learning about finances, says Lanchester, author of How to Speak Money, is a bit like learning Chinese – ‘figuring out the meaning, word-by-word’. This, he says, is how he learned to ‘speak money’.

Many of the theories used to explain language acquisition, Furnham reports, have been used in conjunction with learning about money. (Including behaviourism and cognitivism).

Just as our mother tongue is learned primarily in the home, supplemented by formal lessons at school, many of our ideas about money are formed in our early years in the family.

Summarising studies of ‘money troubled’ adults, Furnham states that many of their troubles originate in ‘lessons’ learned as a child, with the family as the primary socialisation unit. ‘Teaching economic literacy, good money management and sensible saving and spending should be a parental priority, Furnham points out. He refers to Charles Collier’s notion of ‘financial parenting’ in the book Wealth in Families.

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How do our financial tongues differ?

While children generally learn the variety of language their parents speak, seemingly ‘automatically’, this does not mean they have access to all of the dialects of that language equally. Furthermore, different dialects have different uses and are valued differently in different contexts.

I grew up speaking a more rural variety of English, and acquired a more ‘standard’ variety later in life.
Most children grow up speaking the familiar, informal language of the household. They learn the more formal registers considered suitable for education and the workplace.

Like stigmatised language varieties, some varieties of financial literacy – beliefs and behaviours connected with money acquired from childhood – are less valued in society. That is, they are associated with less symbolic and social value. They may lack prestige, and possibly lead to social exclusion.

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How can experts influence our money decisions?

Our ways of speaking about money, and using money, are intimately tied. So can the language of financial experts influence our money decisions?

Linguistic Relativity, also known as the Sapir-Whorf hypothesis, states that the structure of a language influences its speakers’ world-view.

The philosopher (of mathematics, mind and language) Ludwig Wittgenstein’s theory of language as the means by which people both picture reality and reason famously concludes ‘Whereof one cannot speak, thereof one must be silent’.

In other words, in order to be able to talk about money, and make effective decisions about money (key aspects of financial literacy), we need to understand the language of money.

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Why is money taboo?

Why don’t we talk more about money?
Earlier in this series, I suggested that two key reasons include the fact that money means different things to different people, so it can be hard to get on the same page, and secondly, that it simply isn’t considered polite to discuss money openly.

Money is frequently considered a taboo topic – more so than sex or death in many societies. And it is precisely because of this taboo nature, Adrian Furnham reports in The New Psychology of Money, that couples are frequently surprised at the beliefs and preferences of their partner when they are revealed.

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