October 1, 2025 • 55 mins
Our guest today says, “you can’t transform the world if you’re living paycheck to paycheck.” We couldn’t agree more! And money literacy is at the heart of avoiding that fate. Not only did Professor Kristen Carioti literally write the personal finance textbook, but she also found a way to make personal finance classes a requirement at her school, Mount Mary University. Kristen is boots on the ground, teaching the next generation how to think about and handle their finances effectively. We discuss:
- Students are eager to learn about personal finance, indicating a demand for a money education
- Building good money habits early can lead to long-term financial success
- Budgeting should be viewed as a plan rather than a restriction
- Trade-offs in financial decisions are often overlooked by young adults
- Financial tools should be chosen based on individual needs and effectiveness
- And plenty more!
Want more How To Money in your life? Here are some additional ways to get ahead with your personal finances:
- Check out Kristen’s site to learn more about her, the personal finance book, and reach out to her on LinkedIn to connect professionally!
- Knowing your ‘money gear’ is a crucial part of your personal finance journey. Start here.
- Sign up for the weekly HTM newsletter. It’s fun, free, & practical.
- Find a thriving community of fellow money nerds by joining the HTM Facebook group!
- Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!
Best friends out!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel and today we're
talking about pulling the most powerful money levers with Professor
Kristin Carriot. So my guest today says, you can't transform
(00:29):
the world if you're living paycheck to paycheck. I tend
to agree, and money literacy is at the heart of
avoiding that fate. And so not only did Professor Christen
Carriot literally write the personal finance textbook, but she also
found a way to make personal finance classes a requirement
at her school, which is Mount Mary University. And Kristen,
(00:50):
she's boots on the ground right She's teaching the next
generation how to think about and how to handle money
more effectively. And so I'm curious to hear what it's
like getting young folks who care about personal finance as
much as she does. There's a lot to cover in
this conversation. So Professor Kristin Carriote, thank you for joining
me today on the show.
Speaker 2 (01:09):
Happy to be here.
Speaker 1 (01:11):
And we can get into this in a second. But
Professor Carriote has been a listener to How to Money
over the years, so that's really cool, and I want
to talk a lot about your textbook. For first things, First,
what's your craft beer equivalent? What do you splour John
while you're also doing the smart stuff with your money
in the here and now?
Speaker 2 (01:26):
Love the question and you can call me Kristen.
Speaker 3 (01:29):
I would say, my family owns a donut business, and
so my husband works weekends. So typically once a weekend,
I will get a weekend morning babysitter so that I
can go out in the world and be a person, exercise,
do whatever I want.
Speaker 2 (01:46):
And that feels good to me. But it is a splurge.
Speaker 1 (01:49):
I love that, And I totally want to ask about
your husband's donut business and my research I found out
about this, and I'm curious if I drive up there,
if I can, if we can and share a donut
together one of these days maybe.
Speaker 2 (02:02):
Heck, yeah, Okay, let me know.
Speaker 1 (02:04):
Is it hard to abstain from the donut eating given
the the amount of free donuts? I'm sure that are.
They're alluring, They're tempting, They're amazing.
Speaker 3 (02:13):
Yeah, you know, people will see me like eat them,
and they'll say like, aren't you sick of them? I'm like,
that's why I married my husband for the free donuts.
Speaker 2 (02:23):
I still like them.
Speaker 1 (02:23):
Yeah, yeah, sure, he's a nice guy, but he makes
awesome donuts. That's why I'm married. Yeah, all right, I
want to talk about let's talk about that for a
second then, Because he runs this how long has he
run the business? And what has this foray into entrepreneurship?
This starting starting a small business which is not for
the faint of heart. What has that taught you about
(02:44):
personal finance? Maybe by proxy, but obviously you guys are
in this together to a certain extent.
Speaker 2 (02:49):
Yeah.
Speaker 3 (02:50):
So he took over the business from his aunt and uncle,
and he's really grunted a.
Speaker 2 (02:55):
Lot since then.
Speaker 3 (02:56):
I would say what I've learned is having to take
a lot of responsibility for our finances. He works a lot,
a ton of hours, and so understanding how the business
works is really helpful for me, especially if he's coming
home late on a Saturday because he is delivering wedding donuts.
You know, I kind of have a good idea of
(03:19):
the profit margin on a you know, on wedding donuts,
So that helps me understand.
Speaker 2 (03:24):
Okay, you know it's wedding season.
Speaker 3 (03:27):
This is where he makes his money, and it helps
us be a better team together.
Speaker 1 (03:31):
Okay. Because of your husband's experience in running this small
business is entrepreneurship and business ownership? Is that something you
cover and stress as someone who talks about personal finance.
Do you think it's important for people to consider that
they should be considering that avenue more more than they
more than they do, or is like, I'm just curious
(03:52):
to hear your thoughts on just entrepreneurship and small business
ownership overall.
Speaker 3 (03:55):
Absolutely, I think that students really need to understand the
trade offs. I'm the economists, so I'm always thinking trade offs, right, Yeah,
of the gig economy of side hustles, you know, they
sound maybe promising, but there could be a significant trade
off with those.
Speaker 2 (04:13):
So we talk.
Speaker 3 (04:14):
About self employment as like a full time gig. We
talk about side hustles and part time work in the
gig economy and how to use those options when they
make the most sense in your life. So, you know,
sometimes it might make sense to do some gigwork for
a small time a short time in your life, and
(04:35):
they can have a lot of benefits, but they also
have costs.
Speaker 1 (04:37):
Yes, And I think, especially in the gig economy that
we're now fully living in the assumption that oh, I'm
picking up the side hustle makes sense for me, it
should be questioned a lot more because yeah, maybe it does,
and maybe it does for a short period of time,
but I think a lot of people they can become
reliant on some of those gigs, and the gigs might
not be the best paying and they might not be
(04:59):
the best from an income standpoint over the long term.
So okay, let's talk about personal finance education. Let's talk
about your textbook, because you literally wrote the textbook about
personal finance, which is so fascinating, Like it's just kind
of like a joke that people were the person who
wrote the textbook on this, but you did so. But
you're you're infusing personal finance into your classes for years beforehand,
(05:24):
So what did that look like? What sort of tactics
were using.
Speaker 3 (05:28):
So I've been teaching economics and business courses for fifteen years.
What I noticed is that students are really hungry for
financial literacy.
Speaker 2 (05:37):
So I could be teaching.
Speaker 3 (05:40):
About just about anything and a four to one K
comes up and students have questions. So we kind of
stopped class and we talk about you know, four O
one k's, And I was always, you know, happy to
take the tangent to discuss those things because we didn't
have a personal finance course at Mount Mary. We since
have added a personal finance course in the last four years,
(06:02):
so we didn't have one until twenty twenty one, and
then starting this fall, we decided to add it to
our core curriculum. So all students, regardless of their major,
take personal finance as a graduation requirement. It's a three
credit course and it gives us.
Speaker 1 (06:18):
They all got to come through you.
Speaker 2 (06:19):
They all have to.
Speaker 3 (06:20):
Come through me or one of our other instructors. But
the reality is as if it's not required, they probably.
Speaker 2 (06:27):
Won't take it.
Speaker 1 (06:29):
Yeah, so you said students are hungry to learn this,
which fascinates me because where is the disconnect most people,
at least throughout American The American education system for so
many years until very recently has not been a requirement
in almost anywhere, college, high school, anything, and so people
couldn't get out into the real world. And if they
(06:51):
were lucky, their parents taught them something about money. But
most people completely unlucky, make a ton of mistakes and
then maybe go out and learn on their own, hopefully,
but many just decades of poor money stewardship. And it's
not because it's a personal fault or a lack of
or a moral failing. It really is because they don't
(07:12):
know anything about the subject.
Speaker 3 (07:14):
Yeah, yeah, I believe that we are late to it, right.
I mean, states are just coming around to requiring it.
I live in Wisconsin and it's now a requirement in
our state to learn in high school. But best practice
is to learn it in middle school, high school, college,
and beyond. So you know, where is the disconnect? You know,
(07:38):
that's a tough one to answer. I think colleges and
universities are slow to adapt to the needs of our students.
But for me and for our institution, we really see
it as a responsibility that we need our students to
graduate with these life skills because we say our mission
is to educate women to transform the world. Like you
(08:00):
said in the intro, you can't transform the world if
you're a living paycheck to paycheck.
Speaker 1 (08:04):
Well, I was just quoting you, So yeah, that's what
you said. Well, I mean I think of personal finance
almost as it should be, like almost like a language requirement.
Because I think you're right, because it really is its own,
its own language in a lot of ways. So I
started taking Spanish when I was in seventh grade, and
I took it all the way through like sophomore year
of college, and guess what, I'm still like not the
(08:26):
best Spanish speaker, sadly, like I should be better. And
maybe if I'd lived in a foreign country for six
months or something, I would be fluent, but I never
had that immersion experience. But do you think like personal
finance should be similar, because it does have there's like
a lot to learn. I mean you again, you wrote
the book. There are hundreds of pages about this stuff,
and we're so uninterested. We've not been confronted with the
(08:49):
material that maybe it should be like a slow drip
over a long period of time.
Speaker 3 (08:53):
Absolutely, and I had to learn to write the book
in a way that simplified it a little more than
a even thought. You know, some students coming into the
class maybe took it in high school, maybe didn't, or
they took it in high school but it was a
long time ago, or they took it and.
Speaker 2 (09:09):
They didn't have maybe a great instructor.
Speaker 3 (09:11):
Or they just didn't get a lot from it because
it was like a short course or something. So I
really had to kind of really go down to the fundamentals,
even talking about like you know, a difference between a
checking account and a savings account, and where do you
put your basic emergency fund, things that maybe we take
(09:32):
for granted if we think that all students know, they don't.
And so really starting from from zero and recognizing that
students have to unlearn a lot of things too. That
they're coming into the class maybe having learned something from
their parents or from TikTok that just you know, isn't
isn't correct, and they have to unlearn those things. You know,
(09:55):
I have students coming in who think credit cards are
bad and their parents won't let them get one.
Speaker 2 (10:00):
Credit cards can.
Speaker 3 (10:01):
Absolutely be bad, but we know that no credit equals
bad credit, and so you know, explaining that to students
and learning how to open a credit card account but
use it, you know wisely, Okay, pick one category, You're
just going to use it to buy gas, and you're
going to pay it off each month.
Speaker 2 (10:19):
Things like that they have to kind of unlearn.
Speaker 1 (10:22):
That's that's a really good point and I haven't even
really thought about that. Yeah, you're maybe you're indoctrinated in
some bad habits that you have to overcome, and so
it's not just like starting from scratch. Let me teach
you the game plan, but it's like we have to
confront some of those pre existing notions of what smart
money management looks like. I'm curious too, you decided to
write a textbook. Do you remember there was a professor
(10:44):
at one point who released an index card and he said,
everything you know and need to know about personal finance
exists on this three by five index card. Funnily enough,
he turned that into a book too, which just is like, okay,
or you're going to elaborate on this, but do you
feel like a text book was necessary? Any chance that
a textbook is overkill and that maybe what we need
(11:04):
to know about personal finance can be summed up in
less time.
Speaker 3 (11:08):
So I actually think that the seven Steps to Financial Freedom,
which I borrowed from you guys, is the seven money gears.
Speaker 2 (11:15):
I think that sums it up pretty well.
Speaker 1 (11:17):
Yeah.
Speaker 3 (11:17):
What I love about it is that students can learn
it in personal finance, and they can not only can
they share it with like, you know, their parents, their siblings,
their friends while they're in the course, but they can
keep coming back to it.
Speaker 2 (11:31):
Right, It's like a one pager, you know.
Speaker 3 (11:33):
Speaking of the index card, it's just a one page,
like here are the seven steps, and we know that
students they might get to step three and then they
might get back down to step one or step two,
and then they have to you know.
Speaker 2 (11:45):
Start over, or they share it with a parent.
Speaker 3 (11:48):
And the parents like, okay, I'm on step five, but
I see they did this out of order. They need
to go back and do something different. So you know,
I think that they can take that with them. The
textbook is the fundamentals, and there's a lot to cover
because we cover careers, negotiation, student loans, managing debt, buying
(12:11):
a car.
Speaker 2 (12:11):
You know, there's a lot to cover.
Speaker 3 (12:13):
But if you just want that like one pager, I
think it's the seven steps.
Speaker 1 (12:17):
I think you're spot on. I mean I think there.
It's why we're over a thousand episodes in here on
how to money. It's like there in some in one sense,
like it is simple and you can teach the basics
in no time, and something like the seven money Gears
is like the perfect inroad. But then it's also endlessly
nuanced and potentially complicated for individuals across the spectrum. And
(12:38):
so like, yeah, there's there's just a lot of stuff
to learn, and we live in a complicated world, and
the economy is quite complicated too, so the things that
we have to be aware of. You cover a bunch
of that stuff in your book. I'm curious, is the
main problem when you're teaching students about personal finance that
they don't have enough information? Or is it that they
(12:58):
don't feel empowered or able to change their circumstances. Are
you confronted with that dichotomy of people I just don't
know enough fill my brain up, or it's like no,
I feel like I know this stuff, but I don't
know how to execute.
Speaker 2 (13:12):
I love that question. I think mindset matters so much.
Speaker 3 (13:15):
So not Mary's a women's institution, and so imagine, you know,
having students who maybe take on you know, statistically take
on less risk, who maybe have less practice in negotiation.
Speaker 1 (13:31):
And that's documented in studies, right that when you look
at female investors, typically they are more risk averse.
Speaker 3 (13:39):
We talk about that, We say, okay, there is this
like gender divide, there is a negotiation gap, and just
knowing that the gap exists is helpful, right, Like just
knowing like, Okay, you know you're going to go into
a job and if you don't negotiate like someone else
is going to and they're going to get paid more
(14:00):
simply because they asked for it.
Speaker 2 (14:02):
They might not work any harder than you do.
Speaker 3 (14:05):
And so you know, explaining that to students, but then
also like learning how to negotiate, teaching students about compounding
interest and how exponential growth works. We can all learn it, right,
but there's this bias to understanding like or believing the math.
Actually people, there's just like a tendency to believe that
(14:25):
there's only linear growth, right, and that we underestimate exponential growth.
Speaker 2 (14:31):
And so we talk a lot about those things. We
talk a lot.
Speaker 3 (14:33):
About behavioral finance, we talk mindset, we talk mistakes. That's
one of my favorite topics actually is talking about money mistakes,
learning from them, resetting after a money mistake. And I
tell a lot of my own money mistakes because what
student doesn't love to hear their professor talk about the
(14:53):
mistakes they've made.
Speaker 1 (14:54):
Which ones do you share?
Speaker 3 (14:55):
And how did you?
Speaker 1 (14:57):
How did you learn from those biggest mistakes?
Speaker 3 (14:59):
Well, I I bought a house right before the housing
market crash.
Speaker 1 (15:03):
So what was influencing you to do that at that point?
Was it because you thought it was the right time?
In your life to own a home or were you
like buying into the frenzy.
Speaker 3 (15:11):
I was kind of in a rush to grow up,
I think back then, so this is like two thousand
and six, I was ready to own a house, and
I didn't really think about like the long term, like
is this the community that I want.
Speaker 2 (15:23):
To stay in forever or for you know, a while.
And I just I think I was probably a little
bit impatient.
Speaker 1 (15:30):
And so how did that impact your money journey? That
that mistake of buying house in O six?
Speaker 3 (15:34):
You know, it probably impacted me for a while because
when I when you know, we sold that house and
bought a different house.
Speaker 2 (15:42):
You know, those decisions kind of stick with.
Speaker 3 (15:44):
You and they impact them on of acuity that you
could bring to another sale. So also just you know,
making splurge purchases, emotional purchases. I didn't fund my roth
Ira soon enough, So I talk a lot about that.
Speaker 2 (16:01):
I put a lot of graphs up on the board.
Speaker 3 (16:03):
We use online calculators, so we don't do things where
it's like, okay, you have to calculate the value of
a stock, because it's just not really kind of say
like we'll leave that for the finance majors.
Speaker 2 (16:17):
Yeah, and personal finance, like, let's use the online.
Speaker 3 (16:19):
Calculators that you're going to use in the future when
you're buying a car.
Speaker 1 (16:23):
It's like the only thing when I learned about money
as a kid in school, like it was the stock
market game. That was the only game we ever played.
It was like I didn't learn anything from it because
I bought xerox or something like that. Which it's uh,
and and it's like it's such a poor way to
teach kids about money. So if we're going to do it,
let's do it right.
Speaker 2 (16:40):
It's dated.
Speaker 3 (16:41):
I mean, investing now is buy ETFs you know here
probably the few that you might want to follow.
Speaker 2 (16:50):
But the investing strategy is pretty boring, you know.
Speaker 3 (16:54):
Yeah, but it's it's already sort of been diversified for you.
Speaker 2 (16:58):
And so buy and hold. It's dollar cost averaging.
Speaker 1 (17:03):
Do you do you think? And I'm curious, like those
money mistakes you made, did that ever make you feel
like you were bad with money? And when we talk
about like how a person views themselves their identity, I
think there's a lot of people who think of themselves
as being bad with money. Yeah, And is that something
you have to confront in class as well with your students.
Speaker 2 (17:23):
We absolutely do.
Speaker 3 (17:24):
So when I wrote the book, I noticed that a
lot of the books they just jumped right in with
maybe like checking savings accounts right or credit cards. And
my first two chapters are quite a bit of behavioral finance,
quite a bit of exploring your money history and trying
to figure out, Okay, what was the money environment that
(17:47):
you grew up in? Right, So it's called money classroom.
So what was the vibe in your household? Did your
parents or guardians talk about money or not? And then
we kind of like you know, talk about that to
say like, Okay, if that was your past experience, what
could your future experience be? Like, you don't have to
carry that forward for you or for you know, your
(18:10):
dependence or your future dependence, but you can, you can
change that story. So we do a lot of just
like examining, like what is your money history and what
changes can you make to move towards a more secure
have a more secure financial future?
Speaker 1 (18:25):
Yeah, how important are end goals in that conversation? So
I think sometimes when you're when people are trying to
teach money, it's like, let me tell you how the
IRA works. And let me tell you the the income
limits for the roth ira and how much you can
contribute to a four oh one K in a given year.
And they're like, okay, cool, yep, got it. Okay, here's
actually the best, you know, one of the the ETFs
(18:47):
you should consider. And they're like, okay, that makes sense.
But then there's no real discussion of like the why
behind why we're putting money aside in these accounts in
the first place. So how how important are end goals
in the conversations in particular with students who are trying
to kind of figure out personal finance.
Speaker 3 (19:04):
So chapter two, students are reflecting on their reason for
financial freedom, So they're defining their why to say, like
why does this matter to me?
Speaker 2 (19:14):
So, yes, I.
Speaker 3 (19:15):
Can do the things, and I could put money here,
and I could put money there, and I can pay
off my credit card, but like, what is the purpose
of working through these seven steps? And maybe that's because
they want to start a business on their own right,
or maybe it's because they want to provide a more
secure future for their kid or whatever. So we have
(19:38):
them define those and a couple of other instructors teach
the course too, so they you know, sometimes they get
fun and they do things like a vision board or
they discuss these in class. But I think knowing that
why is really important, so that, like you said, it's
not just like Okay, I did the steps, but are
you going to stick with it if if you don't
(20:00):
know your why?
Speaker 1 (20:01):
All right, Professor Christen Carrett, We've got more to get here.
I want to talk about money habits and trade offs
and a lot more that you cover in your book.
So we'll be right back with Professor Christen Carriote. Are
we're back from the break, still talking with Professor Kristen
(20:22):
talking about the most powerful money levers you can pull.
And one of the things that you talk about regularly,
Kristin is habits and just talked about like identity, but
identity really it needs to correlate to the things that
we're doing regularly in our lives, like the almost like
(20:42):
it's flowing out of us because that's who we've become.
And we've had habit experts on the show because I
just think it's a fascinating topic. But what do you
think maybe the are the top money habits that you
want your students to have to be have implemented by
the time they're graduating college or entering the world.
Speaker 3 (21:00):
I would say one of the biggest habits is investing
even a small amount. So if you look at the
seven money gears or the seven steps, it is the
habit of dollar cost averaging. So with like a wroth Ira,
even if it's just a small amount, to show them
how interest compounds and how time matters the most. So
(21:24):
it's not about the amount of money going, but it's
the time horizon and just building up that habit. Right
of like saying, okay, I am a person who.
Speaker 2 (21:31):
Invests, even if that's only five dollars a.
Speaker 3 (21:34):
Month, right going into a wroth Ira or ten dollars
or fifteen. It's opening that account and taking that action
to open it, and then setting up a monthly contribution, right,
set it and forget it, automatic contributions, and then knowing
how they can they can change that or increase that
contribution as their circumstances change. But you can start doing
(21:58):
that in college and you probably I won't miss that
five or ten dollars, You'll probably forget about it. But
waiting to say, well, I'm not going to start investing
until like I really have, I'm settled, like I have
a full time job, or you know, I bought a
proper you know, bought a house or something like that.
You know, you're missing out on maybe five ten years
(22:20):
of investing, and it's time that matters.
Speaker 2 (22:24):
So I say, that's one habit.
Speaker 3 (22:25):
I'm really big uninvesting and and I kind of always
have been. And I think teaching in a women's college
that that's really really important. You know, one of my
goals is for all students to.
Speaker 2 (22:36):
Leave the class.
Speaker 3 (22:39):
Either being investors or seeing themselves as investors and having
a plan to invest other habits. I think having a
growth mindset, you know, is really important, and so just
learning from mistakes and saying okay, you know, with personal finance,
a lot of times we see avoidance behavior where you
know something something bad happen, you make a mistake, and
(23:01):
so you just want to like, you know, avoid the bill,
you want to avoid the emails that are coming. And
so having a growth mindset says like I can change
this trajectory.
Speaker 2 (23:12):
I can figure it out.
Speaker 3 (23:13):
I can ask questions, and maybe that means I have
to change my student loan repayment plan, or maybe that
means that I have to figure out like a balanced
transfer credit card. But just having that growth mindset I
think is really really important. So I think that goes
hand in hand with habits, Yeah, because you know, it
takes that growth mindset to develop those habits.
Speaker 1 (23:36):
Like being proactive when you're confronted with a personal finance problem,
and the truth is we're all confronted with them fairly regularly. Yeah,
and that is that is something that like, Okay, wait
a second, I got this bill in the mail. How
do I proceed, whether it's if it's a healthcare bill,
Like do do I just pay it? Or do I
actually dig in to see whether or not this is
actually what I owe? Has it gone to my insurance
(23:57):
company first?
Speaker 3 (23:58):
Right?
Speaker 1 (23:58):
And so there's all these like proactive measures we need
to take, whereas if we bury our head in the
sand or we just pay the first bill or something
like that, Yeah, oftentimes we're paying more than we need to,
or we we just haven't taken the reins of our
own financial life. What's the pushback you get from students.
Is there a subject or something that you cover where
they're like whoa, whoa, that sounds a little crazy, or
(24:21):
like do you talk about savings rates and They're like,
what save twenty five or thirty percent? That's insane, Like,
I don't know, I'm curious what maybe you hit on.
Sometimes that just strikes a chord, maybe in the opposite direction,
or they're like, I don't understand why anyone would want
to do that.
Speaker 2 (24:35):
I think retirement is a tough sell to college students.
Speaker 1 (24:39):
They're so young, right, Yeah.
Speaker 3 (24:40):
So even even older adults struggle with balancing, you know,
or prioritizing your future self with your present self.
Speaker 2 (24:49):
Right, and so your present self.
Speaker 3 (24:50):
Wants, you know, trendy clothes and wants to go out
to eat, and the future self, you know, wants the
nest egg.
Speaker 2 (24:57):
So that could be tough because yeah, you say that
our word. Yeah, it's tough.
Speaker 3 (25:05):
I show them, well, I show them graphs, and so
there's some people more visual I can say, like listen,
I get it.
Speaker 2 (25:11):
But if you start here, even if it's just a
minimal amount, you get all this.
Speaker 3 (25:16):
You know, you get this part of the curve on
the exponential growth of your compounding interest, and that's where
it's at, right, Like, so even a tiny amount like
early on, really really matters. So I think it's that
it's just like opening the account right, and so like okay,
they're like where where do you open an account? So
(25:36):
I say, okay, I like Fidelity, I like Vanguard. Those
are two great companies to start with. Let's work through
the steps to open one today. How do you set
up multi contributions?
Speaker 2 (25:47):
So just I think.
Speaker 3 (25:49):
Working through some of those hurdles together and making that
the class right. The class can be like actively working
on opening a wrath I array or actively working on Okay,
you're looking for a new job, and you might want
to consider a job that has an employer match for
for one k, like do a little bit of research,
(26:10):
and even like thirty forty minutes of research you can
see like hey, if I apply, you know at this
I don't name anybody, but you know this organization or institution,
like you know, I would get the same I'd get
paid the same amount, but I would actually get this
extra payment to my future self through the employer match.
So doing that research together, I think, or having them
(26:33):
do that in their assignment can be really helpful.
Speaker 1 (26:36):
That's so smart, especially at that age. Like that total
benefits package, like what's my total compensation? Not just the
headline number of the annual salary that I'm getting paid.
The trade offs we know this in economics are like
in ever present reality, Like it is, trade offs make
the world go round in so many ways, like if
I want to sleep in, then I'm not going to
(26:57):
get my run in, or if I'm going to miss
breakfast with a friend. Right, So, what are the trade
offs that young people often ignore when they're kind of
making some of these financial decisions, or maybe what are
some of the trade offs that feel the most difficult?
Is it?
Speaker 3 (27:12):
Oh?
Speaker 1 (27:12):
Man, I feel like I'm gonna have to give up
all these things that I love and care about, Like
I can't go to see Taylor Swift because tickets are
twelve hundred dollars and that means that I can't do both.
I can't do all of these things. How do you
talk about that reality of trade offs in personal finance?
Speaker 2 (27:25):
Yeah?
Speaker 3 (27:26):
You know, one thing we talk about is how the
fun stuff is what goes on social media and the
tradeoff of you staying home and packing your lunch probably
didn't make it to social media, right, Like, I don't know,
maybe meal prep that's kind of popular if.
Speaker 1 (27:42):
You can be that influencer that's aggressive, you know.
Speaker 4 (27:45):
Yeah, But like for the most part, like you know,
paying off your student loans or paying or maybe you
got in over your head on a car loan and
so you actually decided to downgrade and go with a
less expense of car.
Speaker 2 (28:01):
That doesn't make it on social media.
Speaker 3 (28:02):
So I think talking about those things and just recognizing
that like sometimes boring is art or the you know,
less sexy stuff is just not what makes it to
social media what you see from your friends. But thinking
about like what are the ways that you can celebrate
those choices that you make, I think are really cool,
(28:23):
and I think just share them, sharing with each other,
like I decided to do this instead of this, I
didn't go to the Taylor Swift concert, right, or I
didn't go out with my friends.
Speaker 2 (28:32):
Instead we decided to all go for a hike or something.
Speaker 3 (28:36):
I think sharing those decisions can be really really helpful
because I do that stuff all the time. I mean,
I'm like you guys, like I'm proud aldi shopper. I
am a proud person who's like always you know, calling
like the medical built making sure like is this truly
the price? Let me do a little you know, investigation.
(28:59):
So I think modeling that for students is also helpful.
Speaker 1 (29:03):
So you work with a student population, you've said that
a lot of your students are actually living paycheck to paycheck.
Many of them are working one, maybe even two jobs
as they're getting through school as well. Is it harder
or is it easier to reach students given kind of
those students, given the constraints that they are under. Is
I'm just curious because maybe in some ways they are
(29:24):
making an income and they have seen maybe some of
the negative realities of living paycheck to paycheck, so you
don't have to convince them of that. Whereas if they
came from a house where mom and dad were paying
for their education and they don't have to work at
all during school, maybe it just it doesn't feel as tangible.
So what is it like teaching a student population that
(29:44):
kind of maybe trends in that direction.
Speaker 3 (29:46):
Yeah, so I'd say for a lot of students in
college that that is kind of a normal state to
be living paycheck to paycheck. It's the foundation that the
students have, or maybe the privilege that students have had
or don't have, that can really impact them in terms
of learning personal finance and again providing them that foundation.
(30:09):
And so I think the challenge is teaching to a
wide range of money experiences, and so some students will
come in with no credit card. Some students will come
in with one or two credit cards and using them,
you know, paying off the monthly or paying off the
statement balance every month. And then some are coming in
(30:31):
with quite a bit of credit card debt. So it's
teaching to the different experiences and where they're at that
can be challenging. And so I think the actually the
seven steps are so helpful because not everyone's going to
be on that same step, but we can all talk
about them in a way that okay, you're on step three,
(30:51):
you're on step one, and you are on five, but
you missed down on two. So you know, using that
as a framework can be something that's helpful when they
do have different experiences coming into the class. K.
Speaker 1 (31:06):
Yeah, kind of going back to what we were talking
about earlier, connecting it to a goal, I mean, similar
thing with the order of operations, having a specific one
through seven sort of way to go that versus just
throwing out throwing out a litany of action items that
you could do, giving kind of a well, this is
the most important thing for you with where you're at
right now. Do your students tend to identify with that
(31:27):
and be like, oh, well, okay, this is where I'm at,
and then also maybe get excited about how quickly they
can move. I mean, we get listener emails all the
time and they're like, I'm in money Gear three, man,
I'm going to plan on being money Gear five, like
fourteen months from now. And there's something about that specificity
of like here's where I'm at, here's where I'm headed
that can just help move the needle, And I think
(31:49):
make progress happen a lot more quickly for people.
Speaker 2 (31:52):
Yeah, you need a map, you need a guide.
Speaker 3 (31:56):
And so I think for the same reason there's a
ton of research right that like checklists matter and they work,
So the same reason a doctor is going to use
a checklist when they're going into a surgery to say like, Okay,
these are the things I know have to happen to
have a successful surgery.
Speaker 2 (32:14):
That works in.
Speaker 3 (32:16):
Personal finance, right, so that students can say like, Okay,
I'm checking things off as I go and I can
see where I'm at and where I have to go.
I also love it that they're universal that like if
you came in with debt. If you came in with
a money education where you had to learn a lot
of things, you still use the same seven steps.
Speaker 2 (32:36):
Yeah, right, even the age thing.
Speaker 3 (32:38):
Right, So like I might have some traditional age students
who are twenty one, and then I might have some
students who are returning adult students who are maybe in
their thirties or forties.
Speaker 2 (32:50):
Is the same seven steps?
Speaker 1 (32:51):
Are are those students who are coming back to school
later in life? Do you feel like they're impacted differently
by the personal finance course?
Speaker 3 (32:57):
Well, they're kind of my favorite students. Really get it
and they see the value in it. So I would
say they because they have so much life experience, are
so much more life experience that they're able to probably
ask more questions or you know, just really understand different
things with like employer benefits or you know, health insurance
(33:24):
HSA reimbursements, all sorts of things. Yeah, but it's great
to have those students together, right, It's great to have
them in the class because otherwise it's just like I
don't want to just be talking about my experience the
whole time.
Speaker 2 (33:35):
I love it when they interact with each other.
Speaker 1 (33:37):
So I'm curious, do you bring up the word budget,
and if so, how do you bring it up, because
there's like this knee jerk aversion I think to that word,
and most people view that word almost like a four
letter word, like it's profane, Like get that out of
and get that out of my face. That's like a
that's a lifestyle ruiner, right there, professor, So how do
you talk about that in a way that maybe isn't
(33:59):
off pudding?
Speaker 2 (34:01):
Yeah, I get it.
Speaker 3 (34:02):
So we call budgets a plan and we keep like
that to that word, right like it's a plan.
Speaker 1 (34:08):
Rebrand it, you know.
Speaker 2 (34:09):
Yeah, exactly.
Speaker 3 (34:10):
And we also keep it pretty open on how students
want to do their plan, so they can do if
they want to do a budgeting app awesome, if they
want to do a spreadsheet or paper and pencil, like
whatever works for them. So we kind of go through
like here are some common ways to budget, but we
always do zero based budget, so regardless of the method,
(34:34):
the plan is always in a zero based budget.
Speaker 2 (34:36):
Every dollar has a job. So we use it as
as a plan, use it as a tool.
Speaker 3 (34:42):
And one of the things that we do is we
show how, okay, if you have a baseline budget and
then you have a future budget, and you have a
financial goal, and that financial goal is to let's say
you're step one and you want to increase, you want
to build your basic emergency fund. Okay, you've got nothing
and you need fifteen hundred dollars.
Speaker 1 (35:04):
What we do twenty four hundred and sixty seven? You
know whatever?
Speaker 2 (35:07):
Are you an economist?
Speaker 3 (35:10):
I wish we say, Okay, now use your budget and
show how you could do that in four months. Use
your budget and show how you could do that in
six months or whatever, you know, eight twelve months. And
so we use it as a tool to say, like, okay,
here are some different scenarios. And the cool thing about
maybe a spreadsheet is that you can just you know,
copy it over and say like, okay, if we just
(35:31):
change the timeline, how can we move these levers and
see how we can we can make change faster or slower.
It doesn't always have to be fast, but we can
say also, like, let's say you do pick up some
side work and maybe it's not maybe it's not like
gigwork how we normally think about it. But maybe you're
like you babysit or you cut hair on the side. Right,
(35:55):
if you could bring in an extra one hundred bucks
a month. How can that impact your your goal in
your plan?
Speaker 1 (36:01):
What are some of the biggest lifestyle reactions that some
of your students have had. Curious has anyone ever come
up and been like Professor Carrioti, It turns out I
just realized this, I can't actually afford the school that
I'm going to right now, or I've got to reconsider
my approach to student loans. I mean, what sorts of
light bulb moments have you seen in the classroom.
Speaker 3 (36:22):
Yeah, when we do when we look at careers, we
do research your career and then we do research yourself
and then we kind of talk about like is that
a match for you? Because if you are investing in
your degree and then there's not going to be a
payoff for that, there's a gap there and how are
you going to make that up?
Speaker 1 (36:43):
So have you seen people like change majors because of
the personal finance class?
Speaker 3 (36:48):
You know, we don't track that, but possibly what we
do use is the BLS Occupational Outlook Handbook.
Speaker 2 (36:54):
It's a government website.
Speaker 3 (36:55):
Again, not the sexiest tool, but it does a good
job of explaining what the job outlook is for a
certain career. But it also shows you like adjacent careers.
So maybe you always thought you wanted to be a
nurse or going to real estate. I know those are
two different things, but you look up that job and
(37:16):
it's like in their assignment, look up that these two
jobs that you think you might want to go into,
and then look at the adjacent jobs, like what else
is similar to that but possibly has like a better
job outlook? And how do you keep your options open
so that you can maybe do that. We talk about
experiential learning, internships, job shadows, interviews, all these ways to
(37:40):
learn more about this career that you're going into. You're
spending a lot of money right on your degree, and
is that truly.
Speaker 2 (37:49):
The best thing for you?
Speaker 3 (37:52):
Do that job shadow because it's like free, right, job
shadow is like half a day.
Speaker 2 (37:56):
Test it out first, test it out.
Speaker 3 (37:58):
And see to learn, like, Okay, I like what they're doing,
but what's she doing over there that looks cool? Or
I'm gonna sit in on this meeting or this call
because it's similar but it's maybe a little bit different.
Speaker 2 (38:11):
Or I didn't even know that that job existed.
Speaker 1 (38:13):
Do you have discussions about dream jobs versus the commensurate
pay and the likelihood of success. Like I think about
how a huge percentage of young people, myself included. When
I was a little I was like, I want to
be a professional basketball player, and there was no chance
that was gonna happen for me. Right, It doesn't It
doesn't matter how much work I put in. It just
(38:36):
it was impossible. Even though I'm six six, I just
don't have I have zero talent. Yeah, I know. People
ask me all the time and it just rubs me
the wrong way because they're like, do you play basketball?
And I'm like, kind of, but not really. Well, So, yeah,
when you talk about that, there is this kind of
there has been this push I think in a big
(38:58):
part of our culture to say, choose the thing that
lights you up and that makes you happy every single day.
And I think it's the rare people who really get
that ultimate blend of all things where they absolutely love
their work every day day and day out, and they
get paid incredibly Well, how do you talk about that
trade offs?
Speaker 3 (39:19):
There? You know, I talk about how job security also
makes you pretty happy.
Speaker 1 (39:23):
That's true.
Speaker 3 (39:25):
And so I'm a labor economist, so I think a
lot about careers and why people choose the jobs that
they do. And I also have four kids, and I'm
probably not going to be the parent who's like, follow
your dreams. I'm going to be like, here's the menu
of options. We'll see if that works, you know, maybe
(39:48):
two or three we'll follow that.
Speaker 2 (39:50):
But the reality is that.
Speaker 3 (39:53):
Jobs change, industries change, right, So you might have those
hopes it might not even be there when you get
to graduation.
Speaker 2 (40:00):
But also.
Speaker 3 (40:02):
There's other ways to like fill that bucket, and it
might not be your full time job. So if you
love personal training, for example, you might want to go
into exercise science and you might want to pursue it
as a full time career.
Speaker 2 (40:17):
Awesome.
Speaker 3 (40:18):
You might also want to do something else and do
that on the side. Yeah, right, Like you don't have
to give it up. There's other ways to fulfill those
passions through volunteer work.
Speaker 2 (40:30):
Through part time work, and you know, through travel. There's
all sorts of ways to do that.
Speaker 3 (40:37):
I don't think it always has to be your full
time job, and like you said, it's often not.
Speaker 1 (40:41):
Yeah. Sometimes when you make your passion your job, you
hate your passion like it turns on you too, so
you have to be careful about that. Yeah, all right,
I got a few more questions I want to get
to with you, Kristen, specifically want to talk about like
fintech and tools that people use to make money progress.
I'm curious to hear your take on those and how
much your students adopt them and whether or not they're
super helpful. So we'll get to a few more questions
(41:02):
with Professor Kristen Carriot about powerful money levers. Right after this,
we're back still talking with Professor Kristin karrioty about the
most powerful money levers that you can pull to make
lots of financial progress in your life. And this has
(41:24):
already been so informative. I love just hearing kind of
what's going on inside the classroom and the way that
young people are responding to the material that you're covering,
and just like how much you care about this obviously, Kristin.
I mean, this is clearly a passion of yours and
something that you've cared about for a long time, and
you're turning that into a lot of education for a
lot of people, Like you're impacting the lives of young
(41:46):
people in a significant way. I got to imagine they're
going to go forward in like five years from now
be like yeah, I have this like roth Iray with
like fifty grand in it because my professor like, that's
a really cool thing.
Speaker 2 (41:57):
Yeah.
Speaker 1 (41:58):
Yeah, to be able to make happen. And I hope
they reach back out to you because I know that
means a lot to teachers too, when they get that
email randomly or something like that from a former student.
I'm curious though, when like we've experienced this massive fintech boom.
I think some of it's been good, some of it's
been not so good. Those initial companies felt like they
were coming from this place like Acorns or just why Now,
(42:21):
but just some great companies trying to really help people
out and translate personal finance into the digital age. But
since then, I feel like we've seen a lot of
companies maybe not praying on people, but not maybe in
behaviorally taking advantage of people in some ways to get
them to do things that are not in their best interest.
(42:42):
So how do you talk about personal finance tools? Which
ones people should pick up or which ones people should
avoid when it comes to managing their money. Do you
think digital tools are a necessity or helpful or could
be the opposite.
Speaker 2 (42:57):
I think do what works.
Speaker 3 (43:00):
Tool or an app works for you and you like it,
go for it. Don't force it. If you try something
and it's not working. I mean, how many apps have
you tried and you're like, it's not going to work
for me. Sometimes, you know, there's a reason why the
envelope system worked, you know, for so many people for
so long. There's a reason why just writing down, you know,
(43:22):
something in a journal or maybe in your notes app.
Let's say you're doing like a a no spend challenge,
so you're trying to not spend money for a month
or two weeks or something. You know, you just you
can just write that down in your notes app in
your phone. It doesn't have to be some fancy tool.
Speaker 2 (43:40):
So yeah, do what works.
Speaker 3 (43:42):
And we also take a DIY approach a lot of times.
There are a lot of ways that you know, students
get kind of preyed upon. So thinking about things like
debt settlement, credit repair, there's a lot of ways and
subscription pricing models that students use that they can do
(44:04):
those things on their own through a DIY approach using
free resources. You know, a company can't fix your credit
any better than you can on your own, right, and well.
Speaker 1 (44:16):
They'll try to charge you a lot for the taking
it off your hands, right exactly.
Speaker 3 (44:20):
Yeah, and you can do all of that yourself with
like just learning kind of some basics. So we do
quite a bit of education on like what's the DIY
approach to something, making sure that you're not paying for
something that you don't you know, truly need.
Speaker 2 (44:35):
Identity theft is another one.
Speaker 3 (44:38):
Students using some subscription based identity theft products, yeah, services,
and and they're really not valuable. They should be spending
spending their money elsewhere.
Speaker 1 (44:50):
So that's that's one of those things that doesn't really
get talked about much in the personal finance space is
how much like bad but seemingly good stuff is out
there for people, like credit repair. When you hear the advertisement,
it sounds like a no brainer. Yeah, well my credit stinks,
it's in the dumps, so I should totally sign up
for this service. It's going to help me out of that.
(45:11):
And there are other services like self which used to
be called self lender, that is kind of cool and
can help you raise your score in a reasonable, real
way that doesn't cost too much money. But then there's
all these other players out there that will totally take
advantage of you and charge you way too much and
it is something you could do yourself. How do you
talk about realizing or seeing spotting those bad players who
(45:34):
will take advantage of you and or you know, even
people who maybe you're just not ready for a financial
advisor yet and it is going to be costly. So
it's not even that they're bad or they're trying to
take advantage of you, it's just that you're not at
that point in your in your personal finance progress where
that's necessary. How do you talk to students about, like
(45:54):
how avoiding the bad stuff and waiting on stuff that
they might not be ready for.
Speaker 3 (45:58):
I'm going to add another example, and that's life insurance. Yeah, right,
you know life insurance. Don't you care about your family,
don't you want to protect them?
Speaker 2 (46:07):
So there's there, there are There is good.
Speaker 3 (46:09):
Life insurance, right, and I think we agree that that's term.
But other types of life insurance, you know, often are
being sold to people and they don't really need them.
Speaker 2 (46:19):
Other're being over insured. So you know, I think.
Speaker 3 (46:22):
Comes down to doing a research, just trying to be skeptical,
like can I is someone trying to sell me something?
Can I do this on my own? Asking questions? We
talk about the different types of financial advisors and so
asking questions if you are going to, you know, look
into using a financial advisor at using you know the
(46:43):
right type, so we get into that.
Speaker 2 (46:46):
So do research, be skeptical, ask questions.
Speaker 1 (46:49):
Last question for you the when it comes to learning
personal finance. As you know, you have been kind of
an avid lifelong learner in this space. It's not one
and done. You don't take the class in college and
then you're just set for the rest of your life.
You know everything you need to know in your personal
finance life is going to go perfectly. So how do
you talk to your students about becoming a lifelong learner
(47:10):
in this space and maybe some great places to turn
or what it looks like to continue to pursue that
education once they finish your class.
Speaker 3 (47:19):
I think knowing yourself really matters. They do self assessments
in the course, and so having that knowledge of like okay,
I am I value experiences over things or I So
that's like a money value self assessment. Or there's one
on valuing your presen self versus your future self, like
(47:40):
are you balanced?
Speaker 2 (47:41):
Do you know do you over prioritize one or the other?
Speaker 3 (47:44):
I think in the class kind of knowing some of
those sort of those types or some of those like
tendencies can be really helpful moving forward because in the
future then they can say like, oh, I'm a person
who values experiences over things. That's why I'm choosing this,
or that's why they didn't really feel that good. It
seems like it was a good idea to buy that thing,
But what I really want to do is spend time
(48:04):
with this person or whatever. So I think that's one thing,
is just setting them up to know themselves better and
then you know, find what works for you.
Speaker 2 (48:14):
Is that a podcast?
Speaker 3 (48:15):
You know?
Speaker 2 (48:15):
Is that the hot of money podcast is that.
Speaker 3 (48:18):
It should be you know, look at your feed in
your social media. Are you following people who are like
encouraging money management that aligns with your with your money values.
Speaker 2 (48:30):
And it doesn't always have to be like a like
a fit.
Speaker 3 (48:32):
Influencer, you know, or someone who's just talking about money,
but it could be someone who's into anti consumption or
someone who's into zero waste or something like that, and
so kind of curating the information that comes in. But
I also recommend a few books, I recommend you know,
some people to follow, and always tell them that you
(48:55):
know they can always reach out to me, that I'd
be happy to hear from them and answer their question
and hear how life's going for them.
Speaker 1 (49:02):
I love it. Okay, where can our listeners find out
more about you and find out more about your textbook?
If they want the granular, full on guide to how
to manage all their personal finances, your textbook could certainly
be a resource for them. So yeah, where can how
the money listeners find out more about you?
Speaker 3 (49:21):
And that I have a pretty basic website, It's just
Kristincarriot dot com, and on that website can make sure
that the seven steps to financial Freedom are there. So
that's just that one pager that you can use in
reference over and over. But my books on Stage Publishing's
website and I'm also on LinkedIn.
Speaker 1 (49:41):
Awesome, it was a pleasure talking with you, Kristin. Thank
you so much for joining me today on the show.
Thank you, oh man. That was great. Really glad to
have Professor Kristin Carriot on to talk about personal finances
with me today. And I love that it goes like
she obviously nerds out about personal finances to the point
that she wrote the textbook to the point that she
(50:01):
prodded her college to start offering a personal finance class
when it previously didn't exist, and then was obviously persuasive
enough to get her college to be like, yeah, we're
going to make that a requirement for everyone to graduate.
And this was before it kind of kind of became
widespread really in the culture, and some states had it
(50:24):
mandatory at that point in time, but many states didn't.
And so I'm just I think it's fascinating to hear
the details of what it looks like to reach, especially
a lot of younger people who are getting out into
the real world starting to manage personal finances. I mean,
for a lot of us, college was our first experience
(50:45):
of living life on our own. Of like, I know,
for me much, I don't know what this says about me,
but like doing my own laundry. Right before then, my
mom did all my laundry. My kids now do their
own laundry. I've learned from that. But like, going out
there and managing your own finances is a tall task,
especially in a world where we're drawn by marketing and
(51:06):
images of celebrities and just popular culture. The things that
it espouses is being good often cost a heck of
a lot of money. And so I just love that
Professor Kristen Carreot is in the trenches talking about these
things with her students, and it sounds like it's having
a massive impact. I think just a couple of the
(51:27):
big things that struck me in this conversation. I love
when she talked about unlearning as a necessity. And the
truth is, yeah, we're you listening to this podcast. You're
not starting from scratch. You are not like an empty
piece of paper where we can just kind of start
writing something fresh. Like there might need to be things
(51:47):
that are scribbled out. We might need to break out
the white out right and just go to town on
some of the pages that you have written, whether it's
in the things that you think are the most important
when it comes to money, whether it is is in
the money habits, maybe that you've handled some of our
bad habits, so know that, Hey, what do I need
(52:08):
to go back to the drawing board on and maybe
rethink what's maybe a money script that's underlying a lot
of how we behave and think about and handle my
money that I haven't questioned, And maybe I need to
go back and question that. So unlearning can be a
necessity in making progress with our money. I also really
(52:30):
appreciate it, and I think this is something we talk
about on the show regularly as well. Is truly the
un sexy stuff doesn't make it on social media, but
a lot of that un sexy stuff is what sets
you up for a lot of success, a lot of
extra margin in your life, and a lot of future optionality.
So it's it's not going to make the Influencer Hall
(52:54):
of Fame, So those decisions that you choose to make
that are better for your ultimate financial reality. It just
what struck me when she was talking about that was
the basic example in the book The Millionaire next Door,
which is super old school personal finance book. And when
you hold up two pictures to somebody, one of a
guy driving or a gal driving a Toyota Corolla in
(53:17):
front of a eighteen hundred square foot house wearing just
super normal clothes, and then you hold up another picture
of someone in a six thousand square foot mansion and
a fancy Jaguar or something like that, in a decked
out suit with a Gucci bag. Well, which one of
these is the financially successful person? And immediately almost everybody
(53:38):
would point to the person with a really nice house
and car as being the financially successful one. But the
truth is being financially successful often doesn't present itself on
the surface. The more we spend to show that we
are living a certain kind of life, often it's funded
through debt through credit cards. Not always right. It's okay.
(54:01):
Some people do have fancy houses and cars and they
are also financially successful, great investors, and have tons of
margin in their lives. But I'm just saying, I guess,
on average, like what is true, and the truth is
that the person who spends less and invests more of
their money is going to be more financially successful and
have more future options in their lives. So I was
(54:23):
really thankful that she took the time to have this
conversation with me. Today. You can pick up her textbook
if you want a personal finance textbook, if you like,
want the whole kit kaboodle straight tom A.
Speaker 3 (54:32):
Vane.
Speaker 1 (54:33):
I think it's a really it's really cool. She did
a great job with it. So thank you as always
for listening to this podcast. Thanks for listening to this episode.
We will be back with a fresh Friday Flight episode
in a couple of days until next time, best friend
out
Speaker 3 (55:02):
Yeah,
Welcome to How to Money. I'm Joel and today we're
talking about pulling the most powerful money levers with Professor
Kristin Carriot. So my guest today says, you can't transform
(00:29):
the world if you're living paycheck to paycheck. I tend
to agree, and money literacy is at the heart of
avoiding that fate. And so not only did Professor Christen
Carriot literally write the personal finance textbook, but she also
found a way to make personal finance classes a requirement
at her school, which is Mount Mary University. And Kristen,
(00:50):
she's boots on the ground right She's teaching the next
generation how to think about and how to handle money
more effectively. And so I'm curious to hear what it's
like getting young folks who care about personal finance as
much as she does. There's a lot to cover in
this conversation. So Professor Kristin Carriote, thank you for joining
me today on the show.
Speaker 2 (01:09):
Happy to be here.
Speaker 1 (01:11):
And we can get into this in a second. But
Professor Carriote has been a listener to How to Money
over the years, so that's really cool, and I want
to talk a lot about your textbook. For first things, First,
what's your craft beer equivalent? What do you splour John
while you're also doing the smart stuff with your money
in the here and now?
Speaker 2 (01:26):
Love the question and you can call me Kristen.
Speaker 3 (01:29):
I would say, my family owns a donut business, and
so my husband works weekends. So typically once a weekend,
I will get a weekend morning babysitter so that I
can go out in the world and be a person, exercise,
do whatever I want.
Speaker 2 (01:46):
And that feels good to me. But it is a splurge.
Speaker 1 (01:49):
I love that, And I totally want to ask about
your husband's donut business and my research I found out
about this, and I'm curious if I drive up there,
if I can, if we can and share a donut
together one of these days maybe.
Speaker 2 (02:02):
Heck, yeah, Okay, let me know.
Speaker 1 (02:04):
Is it hard to abstain from the donut eating given
the the amount of free donuts? I'm sure that are.
They're alluring, They're tempting, They're amazing.
Speaker 3 (02:13):
Yeah, you know, people will see me like eat them,
and they'll say like, aren't you sick of them? I'm like,
that's why I married my husband for the free donuts.
Speaker 2 (02:23):
I still like them.
Speaker 1 (02:23):
Yeah, yeah, sure, he's a nice guy, but he makes
awesome donuts. That's why I'm married. Yeah, all right, I
want to talk about let's talk about that for a
second then, Because he runs this how long has he
run the business? And what has this foray into entrepreneurship?
This starting starting a small business which is not for
the faint of heart. What has that taught you about
(02:44):
personal finance? Maybe by proxy, but obviously you guys are
in this together to a certain extent.
Speaker 2 (02:49):
Yeah.
Speaker 3 (02:50):
So he took over the business from his aunt and uncle,
and he's really grunted a.
Speaker 2 (02:55):
Lot since then.
Speaker 3 (02:56):
I would say what I've learned is having to take
a lot of responsibility for our finances. He works a lot,
a ton of hours, and so understanding how the business
works is really helpful for me, especially if he's coming
home late on a Saturday because he is delivering wedding donuts.
You know, I kind of have a good idea of
(03:19):
the profit margin on a you know, on wedding donuts,
So that helps me understand.
Speaker 2 (03:24):
Okay, you know it's wedding season.
Speaker 3 (03:27):
This is where he makes his money, and it helps
us be a better team together.
Speaker 1 (03:31):
Okay. Because of your husband's experience in running this small
business is entrepreneurship and business ownership? Is that something you
cover and stress as someone who talks about personal finance.
Do you think it's important for people to consider that
they should be considering that avenue more more than they
more than they do, or is like, I'm just curious
(03:52):
to hear your thoughts on just entrepreneurship and small business
ownership overall.
Speaker 3 (03:55):
Absolutely, I think that students really need to understand the
trade offs. I'm the economists, so I'm always thinking trade offs, right, Yeah,
of the gig economy of side hustles, you know, they
sound maybe promising, but there could be a significant trade
off with those.
Speaker 2 (04:13):
So we talk.
Speaker 3 (04:14):
About self employment as like a full time gig. We
talk about side hustles and part time work in the
gig economy and how to use those options when they
make the most sense in your life. So, you know,
sometimes it might make sense to do some gigwork for
a small time a short time in your life, and
(04:35):
they can have a lot of benefits, but they also
have costs.
Speaker 1 (04:37):
Yes, And I think, especially in the gig economy that
we're now fully living in the assumption that oh, I'm
picking up the side hustle makes sense for me, it
should be questioned a lot more because yeah, maybe it does,
and maybe it does for a short period of time,
but I think a lot of people they can become
reliant on some of those gigs, and the gigs might
not be the best paying and they might not be
(04:59):
the best from an income standpoint over the long term.
So okay, let's talk about personal finance education. Let's talk
about your textbook, because you literally wrote the textbook about
personal finance, which is so fascinating, Like it's just kind
of like a joke that people were the person who
wrote the textbook on this, but you did so. But
you're you're infusing personal finance into your classes for years beforehand,
(05:24):
So what did that look like? What sort of tactics
were using.
Speaker 3 (05:28):
So I've been teaching economics and business courses for fifteen years.
What I noticed is that students are really hungry for
financial literacy.
Speaker 2 (05:37):
So I could be teaching.
Speaker 3 (05:40):
About just about anything and a four to one K
comes up and students have questions. So we kind of
stopped class and we talk about you know, four O
one k's, And I was always, you know, happy to
take the tangent to discuss those things because we didn't
have a personal finance course at Mount Mary. We since
have added a personal finance course in the last four years,
(06:02):
so we didn't have one until twenty twenty one, and
then starting this fall, we decided to add it to
our core curriculum. So all students, regardless of their major,
take personal finance as a graduation requirement. It's a three
credit course and it gives us.
Speaker 1 (06:18):
They all got to come through you.
Speaker 2 (06:19):
They all have to.
Speaker 3 (06:20):
Come through me or one of our other instructors. But
the reality is as if it's not required, they probably.
Speaker 2 (06:27):
Won't take it.
Speaker 1 (06:29):
Yeah, so you said students are hungry to learn this,
which fascinates me because where is the disconnect most people,
at least throughout American The American education system for so
many years until very recently has not been a requirement
in almost anywhere, college, high school, anything, and so people
couldn't get out into the real world. And if they
(06:51):
were lucky, their parents taught them something about money. But
most people completely unlucky, make a ton of mistakes and
then maybe go out and learn on their own, hopefully,
but many just decades of poor money stewardship. And it's
not because it's a personal fault or a lack of
or a moral failing. It really is because they don't
(07:12):
know anything about the subject.
Speaker 3 (07:14):
Yeah, yeah, I believe that we are late to it, right.
I mean, states are just coming around to requiring it.
I live in Wisconsin and it's now a requirement in
our state to learn in high school. But best practice
is to learn it in middle school, high school, college,
and beyond. So you know, where is the disconnect? You know,
(07:38):
that's a tough one to answer. I think colleges and
universities are slow to adapt to the needs of our students.
But for me and for our institution, we really see
it as a responsibility that we need our students to
graduate with these life skills because we say our mission
is to educate women to transform the world. Like you
(08:00):
said in the intro, you can't transform the world if
you're a living paycheck to paycheck.
Speaker 1 (08:04):
Well, I was just quoting you, So yeah, that's what
you said. Well, I mean I think of personal finance
almost as it should be, like almost like a language requirement.
Because I think you're right, because it really is its own,
its own language in a lot of ways. So I
started taking Spanish when I was in seventh grade, and
I took it all the way through like sophomore year
of college, and guess what, I'm still like not the
(08:26):
best Spanish speaker, sadly, like I should be better. And
maybe if I'd lived in a foreign country for six
months or something, I would be fluent, but I never
had that immersion experience. But do you think like personal
finance should be similar, because it does have there's like
a lot to learn. I mean you again, you wrote
the book. There are hundreds of pages about this stuff,
and we're so uninterested. We've not been confronted with the
(08:49):
material that maybe it should be like a slow drip
over a long period of time.
Speaker 3 (08:53):
Absolutely, and I had to learn to write the book
in a way that simplified it a little more than
a even thought. You know, some students coming into the
class maybe took it in high school, maybe didn't, or
they took it in high school but it was a
long time ago, or they took it and.
Speaker 2 (09:09):
They didn't have maybe a great instructor.
Speaker 3 (09:11):
Or they just didn't get a lot from it because
it was like a short course or something. So I
really had to kind of really go down to the fundamentals,
even talking about like you know, a difference between a
checking account and a savings account, and where do you
put your basic emergency fund, things that maybe we take
(09:32):
for granted if we think that all students know, they don't.
And so really starting from from zero and recognizing that
students have to unlearn a lot of things too. That
they're coming into the class maybe having learned something from
their parents or from TikTok that just you know, isn't
isn't correct, and they have to unlearn those things. You know,
(09:55):
I have students coming in who think credit cards are
bad and their parents won't let them get one.
Speaker 2 (10:00):
Credit cards can.
Speaker 3 (10:01):
Absolutely be bad, but we know that no credit equals
bad credit, and so you know, explaining that to students
and learning how to open a credit card account but
use it, you know wisely, Okay, pick one category, You're
just going to use it to buy gas, and you're
going to pay it off each month.
Speaker 2 (10:19):
Things like that they have to kind of unlearn.
Speaker 1 (10:22):
That's that's a really good point and I haven't even
really thought about that. Yeah, you're maybe you're indoctrinated in
some bad habits that you have to overcome, and so
it's not just like starting from scratch. Let me teach
you the game plan, but it's like we have to
confront some of those pre existing notions of what smart
money management looks like. I'm curious too, you decided to
write a textbook. Do you remember there was a professor
(10:44):
at one point who released an index card and he said,
everything you know and need to know about personal finance
exists on this three by five index card. Funnily enough,
he turned that into a book too, which just is like, okay,
or you're going to elaborate on this, but do you
feel like a text book was necessary? Any chance that
a textbook is overkill and that maybe what we need
(11:04):
to know about personal finance can be summed up in
less time.
Speaker 3 (11:08):
So I actually think that the seven Steps to Financial Freedom,
which I borrowed from you guys, is the seven money gears.
Speaker 2 (11:15):
I think that sums it up pretty well.
Speaker 1 (11:17):
Yeah.
Speaker 3 (11:17):
What I love about it is that students can learn
it in personal finance, and they can not only can
they share it with like, you know, their parents, their siblings,
their friends while they're in the course, but they can
keep coming back to it.
Speaker 2 (11:31):
Right, It's like a one pager, you know.
Speaker 3 (11:33):
Speaking of the index card, it's just a one page,
like here are the seven steps, and we know that
students they might get to step three and then they
might get back down to step one or step two,
and then they have to you know.
Speaker 2 (11:45):
Start over, or they share it with a parent.
Speaker 3 (11:48):
And the parents like, okay, I'm on step five, but
I see they did this out of order. They need
to go back and do something different. So you know,
I think that they can take that with them. The
textbook is the fundamentals, and there's a lot to cover
because we cover careers, negotiation, student loans, managing debt, buying
(12:11):
a car.
Speaker 2 (12:11):
You know, there's a lot to cover.
Speaker 3 (12:13):
But if you just want that like one pager, I
think it's the seven steps.
Speaker 1 (12:17):
I think you're spot on. I mean I think there.
It's why we're over a thousand episodes in here on
how to money. It's like there in some in one sense,
like it is simple and you can teach the basics
in no time, and something like the seven money Gears
is like the perfect inroad. But then it's also endlessly
nuanced and potentially complicated for individuals across the spectrum. And
(12:38):
so like, yeah, there's there's just a lot of stuff
to learn, and we live in a complicated world, and
the economy is quite complicated too, so the things that
we have to be aware of. You cover a bunch
of that stuff in your book. I'm curious, is the
main problem when you're teaching students about personal finance that
they don't have enough information? Or is it that they
(12:58):
don't feel empowered or able to change their circumstances. Are
you confronted with that dichotomy of people I just don't
know enough fill my brain up, or it's like no,
I feel like I know this stuff, but I don't
know how to execute.
Speaker 2 (13:12):
I love that question. I think mindset matters so much.
Speaker 3 (13:15):
So not Mary's a women's institution, and so imagine, you know,
having students who maybe take on you know, statistically take
on less risk, who maybe have less practice in negotiation.
Speaker 1 (13:31):
And that's documented in studies, right that when you look
at female investors, typically they are more risk averse.
Speaker 3 (13:39):
We talk about that, We say, okay, there is this
like gender divide, there is a negotiation gap, and just
knowing that the gap exists is helpful, right, Like just
knowing like, Okay, you know you're going to go into
a job and if you don't negotiate like someone else
is going to and they're going to get paid more
(14:00):
simply because they asked for it.
Speaker 2 (14:02):
They might not work any harder than you do.
Speaker 3 (14:05):
And so you know, explaining that to students, but then
also like learning how to negotiate, teaching students about compounding
interest and how exponential growth works. We can all learn it, right,
but there's this bias to understanding like or believing the math.
Actually people, there's just like a tendency to believe that
(14:25):
there's only linear growth, right, and that we underestimate exponential growth.
Speaker 2 (14:31):
And so we talk a lot about those things. We
talk a lot.
Speaker 3 (14:33):
About behavioral finance, we talk mindset, we talk mistakes. That's
one of my favorite topics actually is talking about money mistakes,
learning from them, resetting after a money mistake. And I
tell a lot of my own money mistakes because what
student doesn't love to hear their professor talk about the
(14:53):
mistakes they've made.
Speaker 1 (14:54):
Which ones do you share?
Speaker 3 (14:55):
And how did you?
Speaker 1 (14:57):
How did you learn from those biggest mistakes?
Speaker 3 (14:59):
Well, I I bought a house right before the housing
market crash.
Speaker 1 (15:03):
So what was influencing you to do that at that point?
Was it because you thought it was the right time?
In your life to own a home or were you
like buying into the frenzy.
Speaker 3 (15:11):
I was kind of in a rush to grow up,
I think back then, so this is like two thousand
and six, I was ready to own a house, and
I didn't really think about like the long term, like
is this the community that I want.
Speaker 2 (15:23):
To stay in forever or for you know, a while.
And I just I think I was probably a little
bit impatient.
Speaker 1 (15:30):
And so how did that impact your money journey? That
that mistake of buying house in O six?
Speaker 3 (15:34):
You know, it probably impacted me for a while because
when I when you know, we sold that house and
bought a different house.
Speaker 2 (15:42):
You know, those decisions kind of stick with.
Speaker 3 (15:44):
You and they impact them on of acuity that you
could bring to another sale. So also just you know,
making splurge purchases, emotional purchases. I didn't fund my roth
Ira soon enough, So I talk a lot about that.
Speaker 2 (16:01):
I put a lot of graphs up on the board.
Speaker 3 (16:03):
We use online calculators, so we don't do things where
it's like, okay, you have to calculate the value of
a stock, because it's just not really kind of say
like we'll leave that for the finance majors.
Speaker 2 (16:17):
Yeah, and personal finance, like, let's use the online.
Speaker 3 (16:19):
Calculators that you're going to use in the future when
you're buying a car.
Speaker 1 (16:23):
It's like the only thing when I learned about money
as a kid in school, like it was the stock
market game. That was the only game we ever played.
It was like I didn't learn anything from it because
I bought xerox or something like that. Which it's uh,
and and it's like it's such a poor way to
teach kids about money. So if we're going to do it,
let's do it right.
Speaker 2 (16:40):
It's dated.
Speaker 3 (16:41):
I mean, investing now is buy ETFs you know here
probably the few that you might want to follow.
Speaker 2 (16:50):
But the investing strategy is pretty boring, you know.
Speaker 3 (16:54):
Yeah, but it's it's already sort of been diversified for you.
Speaker 2 (16:58):
And so buy and hold. It's dollar cost averaging.
Speaker 1 (17:03):
Do you do you think? And I'm curious, like those
money mistakes you made, did that ever make you feel
like you were bad with money? And when we talk
about like how a person views themselves their identity, I
think there's a lot of people who think of themselves
as being bad with money. Yeah, And is that something
you have to confront in class as well with your students.
Speaker 2 (17:23):
We absolutely do.
Speaker 3 (17:24):
So when I wrote the book, I noticed that a
lot of the books they just jumped right in with
maybe like checking savings accounts right or credit cards. And
my first two chapters are quite a bit of behavioral finance,
quite a bit of exploring your money history and trying
to figure out, Okay, what was the money environment that
(17:47):
you grew up in? Right, So it's called money classroom.
So what was the vibe in your household? Did your
parents or guardians talk about money or not? And then
we kind of like you know, talk about that to
say like, Okay, if that was your past experience, what
could your future experience be? Like, you don't have to
carry that forward for you or for you know, your
(18:10):
dependence or your future dependence, but you can, you can
change that story. So we do a lot of just
like examining, like what is your money history and what
changes can you make to move towards a more secure
have a more secure financial future?
Speaker 1 (18:25):
Yeah, how important are end goals in that conversation? So
I think sometimes when you're when people are trying to
teach money, it's like, let me tell you how the
IRA works. And let me tell you the the income
limits for the roth ira and how much you can
contribute to a four oh one K in a given year.
And they're like, okay, cool, yep, got it. Okay, here's
actually the best, you know, one of the the ETFs
(18:47):
you should consider. And they're like, okay, that makes sense.
But then there's no real discussion of like the why
behind why we're putting money aside in these accounts in
the first place. So how how important are end goals
in the conversations in particular with students who are trying
to kind of figure out personal finance.
Speaker 3 (19:04):
So chapter two, students are reflecting on their reason for
financial freedom, So they're defining their why to say, like
why does this matter to me?
Speaker 2 (19:14):
So, yes, I.
Speaker 3 (19:15):
Can do the things, and I could put money here,
and I could put money there, and I can pay
off my credit card, but like, what is the purpose
of working through these seven steps? And maybe that's because
they want to start a business on their own right,
or maybe it's because they want to provide a more
secure future for their kid or whatever. So we have
(19:38):
them define those and a couple of other instructors teach
the course too, so they you know, sometimes they get
fun and they do things like a vision board or
they discuss these in class. But I think knowing that
why is really important, so that, like you said, it's
not just like Okay, I did the steps, but are
you going to stick with it if if you don't
(20:00):
know your why?
Speaker 1 (20:01):
All right, Professor Christen Carrett, We've got more to get here.
I want to talk about money habits and trade offs
and a lot more that you cover in your book.
So we'll be right back with Professor Christen Carriote. Are
we're back from the break, still talking with Professor Kristen
(20:22):
talking about the most powerful money levers you can pull.
And one of the things that you talk about regularly,
Kristin is habits and just talked about like identity, but
identity really it needs to correlate to the things that
we're doing regularly in our lives, like the almost like
(20:42):
it's flowing out of us because that's who we've become.
And we've had habit experts on the show because I
just think it's a fascinating topic. But what do you
think maybe the are the top money habits that you
want your students to have to be have implemented by
the time they're graduating college or entering the world.
Speaker 3 (21:00):
I would say one of the biggest habits is investing
even a small amount. So if you look at the
seven money gears or the seven steps, it is the
habit of dollar cost averaging. So with like a wroth Ira,
even if it's just a small amount, to show them
how interest compounds and how time matters the most. So
(21:24):
it's not about the amount of money going, but it's
the time horizon and just building up that habit. Right
of like saying, okay, I am a person who.
Speaker 2 (21:31):
Invests, even if that's only five dollars a.
Speaker 3 (21:34):
Month, right going into a wroth Ira or ten dollars
or fifteen. It's opening that account and taking that action
to open it, and then setting up a monthly contribution, right,
set it and forget it, automatic contributions, and then knowing
how they can they can change that or increase that
contribution as their circumstances change. But you can start doing
(21:58):
that in college and you probably I won't miss that
five or ten dollars, You'll probably forget about it. But
waiting to say, well, I'm not going to start investing
until like I really have, I'm settled, like I have
a full time job, or you know, I bought a
proper you know, bought a house or something like that.
You know, you're missing out on maybe five ten years
(22:20):
of investing, and it's time that matters.
Speaker 2 (22:24):
So I say, that's one habit.
Speaker 3 (22:25):
I'm really big uninvesting and and I kind of always
have been. And I think teaching in a women's college
that that's really really important. You know, one of my
goals is for all students to.
Speaker 2 (22:36):
Leave the class.
Speaker 3 (22:39):
Either being investors or seeing themselves as investors and having
a plan to invest other habits. I think having a
growth mindset, you know, is really important, and so just
learning from mistakes and saying okay, you know, with personal finance,
a lot of times we see avoidance behavior where you
know something something bad happen, you make a mistake, and
(23:01):
so you just want to like, you know, avoid the bill,
you want to avoid the emails that are coming. And
so having a growth mindset says like I can change
this trajectory.
Speaker 2 (23:12):
I can figure it out.
Speaker 3 (23:13):
I can ask questions, and maybe that means I have
to change my student loan repayment plan, or maybe that
means that I have to figure out like a balanced
transfer credit card. But just having that growth mindset I
think is really really important. So I think that goes
hand in hand with habits, Yeah, because you know, it
takes that growth mindset to develop those habits.
Speaker 1 (23:36):
Like being proactive when you're confronted with a personal finance problem,
and the truth is we're all confronted with them fairly regularly. Yeah,
and that is that is something that like, Okay, wait
a second, I got this bill in the mail. How
do I proceed, whether it's if it's a healthcare bill,
Like do do I just pay it? Or do I
actually dig in to see whether or not this is
actually what I owe? Has it gone to my insurance
(23:57):
company first?
Speaker 3 (23:58):
Right?
Speaker 1 (23:58):
And so there's all these like proactive measures we need
to take, whereas if we bury our head in the
sand or we just pay the first bill or something
like that, Yeah, oftentimes we're paying more than we need to,
or we we just haven't taken the reins of our
own financial life. What's the pushback you get from students.
Is there a subject or something that you cover where
they're like whoa, whoa, that sounds a little crazy, or
(24:21):
like do you talk about savings rates and They're like,
what save twenty five or thirty percent? That's insane, Like,
I don't know, I'm curious what maybe you hit on.
Sometimes that just strikes a chord, maybe in the opposite direction,
or they're like, I don't understand why anyone would want
to do that.
Speaker 2 (24:35):
I think retirement is a tough sell to college students.
Speaker 1 (24:39):
They're so young, right, Yeah.
Speaker 3 (24:40):
So even even older adults struggle with balancing, you know,
or prioritizing your future self with your present self.
Speaker 2 (24:49):
Right, and so your present self.
Speaker 3 (24:50):
Wants, you know, trendy clothes and wants to go out
to eat, and the future self, you know, wants the
nest egg.
Speaker 2 (24:57):
So that could be tough because yeah, you say that
our word. Yeah, it's tough.
Speaker 3 (25:05):
I show them, well, I show them graphs, and so
there's some people more visual I can say, like listen,
I get it.
Speaker 2 (25:11):
But if you start here, even if it's just a
minimal amount, you get all this.
Speaker 3 (25:16):
You know, you get this part of the curve on
the exponential growth of your compounding interest, and that's where
it's at, right, Like, so even a tiny amount like
early on, really really matters. So I think it's that
it's just like opening the account right, and so like okay,
they're like where where do you open an account? So
(25:36):
I say, okay, I like Fidelity, I like Vanguard. Those
are two great companies to start with. Let's work through
the steps to open one today. How do you set
up multi contributions?
Speaker 2 (25:47):
So just I think.
Speaker 3 (25:49):
Working through some of those hurdles together and making that
the class right. The class can be like actively working
on opening a wrath I array or actively working on Okay,
you're looking for a new job, and you might want
to consider a job that has an employer match for
for one k, like do a little bit of research,
(26:10):
and even like thirty forty minutes of research you can
see like hey, if I apply, you know at this
I don't name anybody, but you know this organization or institution,
like you know, I would get the same I'd get
paid the same amount, but I would actually get this
extra payment to my future self through the employer match.
So doing that research together, I think, or having them
(26:33):
do that in their assignment can be really helpful.
Speaker 1 (26:36):
That's so smart, especially at that age. Like that total
benefits package, like what's my total compensation? Not just the
headline number of the annual salary that I'm getting paid.
The trade offs we know this in economics are like
in ever present reality, Like it is, trade offs make
the world go round in so many ways, like if
I want to sleep in, then I'm not going to
(26:57):
get my run in, or if I'm going to miss
breakfast with a friend. Right, So, what are the trade
offs that young people often ignore when they're kind of
making some of these financial decisions, or maybe what are
some of the trade offs that feel the most difficult?
Is it?
Speaker 3 (27:12):
Oh?
Speaker 1 (27:12):
Man, I feel like I'm gonna have to give up
all these things that I love and care about, Like
I can't go to see Taylor Swift because tickets are
twelve hundred dollars and that means that I can't do both.
I can't do all of these things. How do you
talk about that reality of trade offs in personal finance?
Speaker 2 (27:25):
Yeah?
Speaker 3 (27:26):
You know, one thing we talk about is how the
fun stuff is what goes on social media and the
tradeoff of you staying home and packing your lunch probably
didn't make it to social media, right, Like, I don't know,
maybe meal prep that's kind of popular if.
Speaker 1 (27:42):
You can be that influencer that's aggressive, you know.
Speaker 4 (27:45):
Yeah, But like for the most part, like you know,
paying off your student loans or paying or maybe you
got in over your head on a car loan and
so you actually decided to downgrade and go with a
less expense of car.
Speaker 2 (28:01):
That doesn't make it on social media.
Speaker 3 (28:02):
So I think talking about those things and just recognizing
that like sometimes boring is art or the you know,
less sexy stuff is just not what makes it to
social media what you see from your friends. But thinking
about like what are the ways that you can celebrate
those choices that you make, I think are really cool,
(28:23):
and I think just share them, sharing with each other,
like I decided to do this instead of this, I
didn't go to the Taylor Swift concert, right, or I
didn't go out with my friends.
Speaker 2 (28:32):
Instead we decided to all go for a hike or something.
Speaker 3 (28:36):
I think sharing those decisions can be really really helpful
because I do that stuff all the time. I mean,
I'm like you guys, like I'm proud aldi shopper. I
am a proud person who's like always you know, calling
like the medical built making sure like is this truly
the price? Let me do a little you know, investigation.
(28:59):
So I think modeling that for students is also helpful.
Speaker 1 (29:03):
So you work with a student population, you've said that
a lot of your students are actually living paycheck to paycheck.
Many of them are working one, maybe even two jobs
as they're getting through school as well. Is it harder
or is it easier to reach students given kind of
those students, given the constraints that they are under. Is
I'm just curious because maybe in some ways they are
(29:24):
making an income and they have seen maybe some of
the negative realities of living paycheck to paycheck, so you
don't have to convince them of that. Whereas if they
came from a house where mom and dad were paying
for their education and they don't have to work at
all during school, maybe it just it doesn't feel as tangible.
So what is it like teaching a student population that
(29:44):
kind of maybe trends in that direction.
Speaker 3 (29:46):
Yeah, so I'd say for a lot of students in
college that that is kind of a normal state to
be living paycheck to paycheck. It's the foundation that the
students have, or maybe the privilege that students have had
or don't have, that can really impact them in terms
of learning personal finance and again providing them that foundation.
(30:09):
And so I think the challenge is teaching to a
wide range of money experiences, and so some students will
come in with no credit card. Some students will come
in with one or two credit cards and using them,
you know, paying off the monthly or paying off the
statement balance every month. And then some are coming in
(30:31):
with quite a bit of credit card debt. So it's
teaching to the different experiences and where they're at that
can be challenging. And so I think the actually the
seven steps are so helpful because not everyone's going to
be on that same step, but we can all talk
about them in a way that okay, you're on step three,
(30:51):
you're on step one, and you are on five, but
you missed down on two. So you know, using that
as a framework can be something that's helpful when they
do have different experiences coming into the class. K.
Speaker 1 (31:06):
Yeah, kind of going back to what we were talking
about earlier, connecting it to a goal, I mean, similar
thing with the order of operations, having a specific one
through seven sort of way to go that versus just
throwing out throwing out a litany of action items that
you could do, giving kind of a well, this is
the most important thing for you with where you're at
right now. Do your students tend to identify with that
(31:27):
and be like, oh, well, okay, this is where I'm at,
and then also maybe get excited about how quickly they
can move. I mean, we get listener emails all the
time and they're like, I'm in money Gear three, man,
I'm going to plan on being money Gear five, like
fourteen months from now. And there's something about that specificity
of like here's where I'm at, here's where I'm headed
that can just help move the needle, And I think
(31:49):
make progress happen a lot more quickly for people.
Speaker 2 (31:52):
Yeah, you need a map, you need a guide.
Speaker 3 (31:56):
And so I think for the same reason there's a
ton of research right that like checklists matter and they work,
So the same reason a doctor is going to use
a checklist when they're going into a surgery to say like, Okay,
these are the things I know have to happen to
have a successful surgery.
Speaker 2 (32:14):
That works in.
Speaker 3 (32:16):
Personal finance, right, so that students can say like, Okay,
I'm checking things off as I go and I can
see where I'm at and where I have to go.
I also love it that they're universal that like if
you came in with debt. If you came in with
a money education where you had to learn a lot
of things, you still use the same seven steps.
Speaker 2 (32:36):
Yeah, right, even the age thing.
Speaker 3 (32:38):
Right, So like I might have some traditional age students
who are twenty one, and then I might have some
students who are returning adult students who are maybe in
their thirties or forties.
Speaker 2 (32:50):
Is the same seven steps?
Speaker 1 (32:51):
Are are those students who are coming back to school
later in life? Do you feel like they're impacted differently
by the personal finance course?
Speaker 3 (32:57):
Well, they're kind of my favorite students. Really get it
and they see the value in it. So I would
say they because they have so much life experience, are
so much more life experience that they're able to probably
ask more questions or you know, just really understand different
things with like employer benefits or you know, health insurance
(33:24):
HSA reimbursements, all sorts of things. Yeah, but it's great
to have those students together, right, It's great to have
them in the class because otherwise it's just like I
don't want to just be talking about my experience the
whole time.
Speaker 2 (33:35):
I love it when they interact with each other.
Speaker 1 (33:37):
So I'm curious, do you bring up the word budget,
and if so, how do you bring it up, because
there's like this knee jerk aversion I think to that word,
and most people view that word almost like a four
letter word, like it's profane, Like get that out of
and get that out of my face. That's like a
that's a lifestyle ruiner, right there, professor, So how do
you talk about that in a way that maybe isn't
(33:59):
off pudding?
Speaker 2 (34:01):
Yeah, I get it.
Speaker 3 (34:02):
So we call budgets a plan and we keep like
that to that word, right like it's a plan.
Speaker 1 (34:08):
Rebrand it, you know.
Speaker 2 (34:09):
Yeah, exactly.
Speaker 3 (34:10):
And we also keep it pretty open on how students
want to do their plan, so they can do if
they want to do a budgeting app awesome, if they
want to do a spreadsheet or paper and pencil, like
whatever works for them. So we kind of go through
like here are some common ways to budget, but we
always do zero based budget, so regardless of the method,
(34:34):
the plan is always in a zero based budget.
Speaker 2 (34:36):
Every dollar has a job. So we use it as
as a plan, use it as a tool.
Speaker 3 (34:42):
And one of the things that we do is we
show how, okay, if you have a baseline budget and
then you have a future budget, and you have a
financial goal, and that financial goal is to let's say
you're step one and you want to increase, you want
to build your basic emergency fund. Okay, you've got nothing
and you need fifteen hundred dollars.
Speaker 1 (35:04):
What we do twenty four hundred and sixty seven? You
know whatever?
Speaker 2 (35:07):
Are you an economist?
Speaker 3 (35:10):
I wish we say, Okay, now use your budget and
show how you could do that in four months. Use
your budget and show how you could do that in
six months or whatever, you know, eight twelve months. And
so we use it as a tool to say, like, okay,
here are some different scenarios. And the cool thing about
maybe a spreadsheet is that you can just you know,
copy it over and say like, okay, if we just
(35:31):
change the timeline, how can we move these levers and
see how we can we can make change faster or slower.
It doesn't always have to be fast, but we can
say also, like, let's say you do pick up some
side work and maybe it's not maybe it's not like
gigwork how we normally think about it. But maybe you're
like you babysit or you cut hair on the side. Right,
(35:55):
if you could bring in an extra one hundred bucks
a month. How can that impact your your goal in
your plan?
Speaker 1 (36:01):
What are some of the biggest lifestyle reactions that some
of your students have had. Curious has anyone ever come
up and been like Professor Carrioti, It turns out I
just realized this, I can't actually afford the school that
I'm going to right now, or I've got to reconsider
my approach to student loans. I mean, what sorts of
light bulb moments have you seen in the classroom.
Speaker 3 (36:22):
Yeah, when we do when we look at careers, we
do research your career and then we do research yourself
and then we kind of talk about like is that
a match for you? Because if you are investing in
your degree and then there's not going to be a
payoff for that, there's a gap there and how are
you going to make that up?
Speaker 1 (36:43):
So have you seen people like change majors because of
the personal finance class?
Speaker 3 (36:48):
You know, we don't track that, but possibly what we
do use is the BLS Occupational Outlook Handbook.
Speaker 2 (36:54):
It's a government website.
Speaker 3 (36:55):
Again, not the sexiest tool, but it does a good
job of explaining what the job outlook is for a
certain career. But it also shows you like adjacent careers.
So maybe you always thought you wanted to be a
nurse or going to real estate. I know those are
two different things, but you look up that job and
(37:16):
it's like in their assignment, look up that these two
jobs that you think you might want to go into,
and then look at the adjacent jobs, like what else
is similar to that but possibly has like a better
job outlook? And how do you keep your options open
so that you can maybe do that. We talk about
experiential learning, internships, job shadows, interviews, all these ways to
(37:40):
learn more about this career that you're going into. You're
spending a lot of money right on your degree, and
is that truly.
Speaker 2 (37:49):
The best thing for you?
Speaker 3 (37:52):
Do that job shadow because it's like free, right, job
shadow is like half a day.
Speaker 2 (37:56):
Test it out first, test it out.
Speaker 3 (37:58):
And see to learn, like, Okay, I like what they're doing,
but what's she doing over there that looks cool? Or
I'm gonna sit in on this meeting or this call
because it's similar but it's maybe a little bit different.
Speaker 2 (38:11):
Or I didn't even know that that job existed.
Speaker 1 (38:13):
Do you have discussions about dream jobs versus the commensurate
pay and the likelihood of success. Like I think about
how a huge percentage of young people, myself included. When
I was a little I was like, I want to
be a professional basketball player, and there was no chance
that was gonna happen for me. Right, It doesn't It
doesn't matter how much work I put in. It just
(38:36):
it was impossible. Even though I'm six six, I just
don't have I have zero talent. Yeah, I know. People
ask me all the time and it just rubs me
the wrong way because they're like, do you play basketball?
And I'm like, kind of, but not really. Well, So, yeah,
when you talk about that, there is this kind of
there has been this push I think in a big
(38:58):
part of our culture to say, choose the thing that
lights you up and that makes you happy every single day.
And I think it's the rare people who really get
that ultimate blend of all things where they absolutely love
their work every day day and day out, and they
get paid incredibly Well, how do you talk about that
trade offs?
Speaker 3 (39:19):
There? You know, I talk about how job security also
makes you pretty happy.
Speaker 1 (39:23):
That's true.
Speaker 3 (39:25):
And so I'm a labor economist, so I think a
lot about careers and why people choose the jobs that
they do. And I also have four kids, and I'm
probably not going to be the parent who's like, follow
your dreams. I'm going to be like, here's the menu
of options. We'll see if that works, you know, maybe
(39:48):
two or three we'll follow that.
Speaker 2 (39:50):
But the reality is that.
Speaker 3 (39:53):
Jobs change, industries change, right, So you might have those
hopes it might not even be there when you get
to graduation.
Speaker 2 (40:00):
But also.
Speaker 3 (40:02):
There's other ways to like fill that bucket, and it
might not be your full time job. So if you
love personal training, for example, you might want to go
into exercise science and you might want to pursue it
as a full time career.
Speaker 2 (40:17):
Awesome.
Speaker 3 (40:18):
You might also want to do something else and do
that on the side. Yeah, right, Like you don't have
to give it up. There's other ways to fulfill those
passions through volunteer work.
Speaker 2 (40:30):
Through part time work, and you know, through travel. There's
all sorts of ways to do that.
Speaker 3 (40:37):
I don't think it always has to be your full
time job, and like you said, it's often not.
Speaker 1 (40:41):
Yeah. Sometimes when you make your passion your job, you
hate your passion like it turns on you too, so
you have to be careful about that. Yeah, all right,
I got a few more questions I want to get
to with you, Kristen, specifically want to talk about like
fintech and tools that people use to make money progress.
I'm curious to hear your take on those and how
much your students adopt them and whether or not they're
super helpful. So we'll get to a few more questions
(41:02):
with Professor Kristen Carriot about powerful money levers. Right after this,
we're back still talking with Professor Kristin karrioty about the
most powerful money levers that you can pull to make
lots of financial progress in your life. And this has
(41:24):
already been so informative. I love just hearing kind of
what's going on inside the classroom and the way that
young people are responding to the material that you're covering,
and just like how much you care about this obviously, Kristin.
I mean, this is clearly a passion of yours and
something that you've cared about for a long time, and
you're turning that into a lot of education for a
lot of people, Like you're impacting the lives of young
(41:46):
people in a significant way. I got to imagine they're
going to go forward in like five years from now
be like yeah, I have this like roth Iray with
like fifty grand in it because my professor like, that's
a really cool thing.
Speaker 2 (41:57):
Yeah.
Speaker 1 (41:58):
Yeah, to be able to make happen. And I hope
they reach back out to you because I know that
means a lot to teachers too, when they get that
email randomly or something like that from a former student.
I'm curious though, when like we've experienced this massive fintech boom.
I think some of it's been good, some of it's
been not so good. Those initial companies felt like they
were coming from this place like Acorns or just why Now,
(42:21):
but just some great companies trying to really help people
out and translate personal finance into the digital age. But
since then, I feel like we've seen a lot of
companies maybe not praying on people, but not maybe in
behaviorally taking advantage of people in some ways to get
them to do things that are not in their best interest.
(42:42):
So how do you talk about personal finance tools? Which
ones people should pick up or which ones people should
avoid when it comes to managing their money. Do you
think digital tools are a necessity or helpful or could
be the opposite.
Speaker 2 (42:57):
I think do what works.
Speaker 3 (43:00):
Tool or an app works for you and you like it,
go for it. Don't force it. If you try something
and it's not working. I mean, how many apps have
you tried and you're like, it's not going to work
for me. Sometimes, you know, there's a reason why the
envelope system worked, you know, for so many people for
so long. There's a reason why just writing down, you know,
(43:22):
something in a journal or maybe in your notes app.
Let's say you're doing like a a no spend challenge,
so you're trying to not spend money for a month
or two weeks or something. You know, you just you
can just write that down in your notes app in
your phone. It doesn't have to be some fancy tool.
Speaker 2 (43:40):
So yeah, do what works.
Speaker 3 (43:42):
And we also take a DIY approach a lot of times.
There are a lot of ways that you know, students
get kind of preyed upon. So thinking about things like
debt settlement, credit repair, there's a lot of ways and
subscription pricing models that students use that they can do
(44:04):
those things on their own through a DIY approach using
free resources. You know, a company can't fix your credit
any better than you can on your own, right, and well.
Speaker 1 (44:16):
They'll try to charge you a lot for the taking
it off your hands, right exactly.
Speaker 3 (44:20):
Yeah, and you can do all of that yourself with
like just learning kind of some basics. So we do
quite a bit of education on like what's the DIY
approach to something, making sure that you're not paying for
something that you don't you know, truly need.
Speaker 2 (44:35):
Identity theft is another one.
Speaker 3 (44:38):
Students using some subscription based identity theft products, yeah, services,
and and they're really not valuable. They should be spending
spending their money elsewhere.
Speaker 1 (44:50):
So that's that's one of those things that doesn't really
get talked about much in the personal finance space is
how much like bad but seemingly good stuff is out
there for people, like credit repair. When you hear the advertisement,
it sounds like a no brainer. Yeah, well my credit stinks,
it's in the dumps, so I should totally sign up
for this service. It's going to help me out of that.
(45:11):
And there are other services like self which used to
be called self lender, that is kind of cool and
can help you raise your score in a reasonable, real
way that doesn't cost too much money. But then there's
all these other players out there that will totally take
advantage of you and charge you way too much and
it is something you could do yourself. How do you
talk about realizing or seeing spotting those bad players who
(45:34):
will take advantage of you and or you know, even
people who maybe you're just not ready for a financial
advisor yet and it is going to be costly. So
it's not even that they're bad or they're trying to
take advantage of you, it's just that you're not at
that point in your in your personal finance progress where
that's necessary. How do you talk to students about, like
(45:54):
how avoiding the bad stuff and waiting on stuff that
they might not be ready for.
Speaker 3 (45:58):
I'm going to add another example, and that's life insurance. Yeah, right,
you know life insurance. Don't you care about your family,
don't you want to protect them?
Speaker 2 (46:07):
So there's there, there are There is good.
Speaker 3 (46:09):
Life insurance, right, and I think we agree that that's term.
But other types of life insurance, you know, often are
being sold to people and they don't really need them.
Speaker 2 (46:19):
Other're being over insured. So you know, I think.
Speaker 3 (46:22):
Comes down to doing a research, just trying to be skeptical,
like can I is someone trying to sell me something?
Can I do this on my own? Asking questions? We
talk about the different types of financial advisors and so
asking questions if you are going to, you know, look
into using a financial advisor at using you know the
(46:43):
right type, so we get into that.
Speaker 2 (46:46):
So do research, be skeptical, ask questions.
Speaker 1 (46:49):
Last question for you the when it comes to learning
personal finance. As you know, you have been kind of
an avid lifelong learner in this space. It's not one
and done. You don't take the class in college and
then you're just set for the rest of your life.
You know everything you need to know in your personal
finance life is going to go perfectly. So how do
you talk to your students about becoming a lifelong learner
(47:10):
in this space and maybe some great places to turn
or what it looks like to continue to pursue that
education once they finish your class.
Speaker 3 (47:19):
I think knowing yourself really matters. They do self assessments
in the course, and so having that knowledge of like okay,
I am I value experiences over things or I So
that's like a money value self assessment. Or there's one
on valuing your presen self versus your future self, like
(47:40):
are you balanced?
Speaker 2 (47:41):
Do you know do you over prioritize one or the other?
Speaker 3 (47:44):
I think in the class kind of knowing some of
those sort of those types or some of those like
tendencies can be really helpful moving forward because in the
future then they can say like, oh, I'm a person
who values experiences over things. That's why I'm choosing this,
or that's why they didn't really feel that good. It
seems like it was a good idea to buy that thing,
But what I really want to do is spend time
(48:04):
with this person or whatever. So I think that's one thing,
is just setting them up to know themselves better and
then you know, find what works for you.
Speaker 2 (48:14):
Is that a podcast?
Speaker 3 (48:15):
You know?
Speaker 2 (48:15):
Is that the hot of money podcast is that.
Speaker 3 (48:18):
It should be you know, look at your feed in
your social media. Are you following people who are like
encouraging money management that aligns with your with your money values.
Speaker 2 (48:30):
And it doesn't always have to be like a like
a fit.
Speaker 3 (48:32):
Influencer, you know, or someone who's just talking about money,
but it could be someone who's into anti consumption or
someone who's into zero waste or something like that, and
so kind of curating the information that comes in. But
I also recommend a few books, I recommend you know,
some people to follow, and always tell them that you
(48:55):
know they can always reach out to me, that I'd
be happy to hear from them and answer their question
and hear how life's going for them.
Speaker 1 (49:02):
I love it. Okay, where can our listeners find out
more about you and find out more about your textbook?
If they want the granular, full on guide to how
to manage all their personal finances, your textbook could certainly
be a resource for them. So yeah, where can how
the money listeners find out more about you?
Speaker 3 (49:21):
And that I have a pretty basic website, It's just
Kristincarriot dot com, and on that website can make sure
that the seven steps to financial Freedom are there. So
that's just that one pager that you can use in
reference over and over. But my books on Stage Publishing's
website and I'm also on LinkedIn.
Speaker 1 (49:41):
Awesome, it was a pleasure talking with you, Kristin. Thank
you so much for joining me today on the show.
Thank you, oh man. That was great. Really glad to
have Professor Kristin Carriot on to talk about personal finances
with me today. And I love that it goes like
she obviously nerds out about personal finances to the point
that she wrote the textbook to the point that she
(50:01):
prodded her college to start offering a personal finance class
when it previously didn't exist, and then was obviously persuasive
enough to get her college to be like, yeah, we're
going to make that a requirement for everyone to graduate.
And this was before it kind of kind of became
widespread really in the culture, and some states had it
(50:24):
mandatory at that point in time, but many states didn't.
And so I'm just I think it's fascinating to hear
the details of what it looks like to reach, especially
a lot of younger people who are getting out into
the real world starting to manage personal finances. I mean,
for a lot of us, college was our first experience
(50:45):
of living life on our own. Of like, I know,
for me much, I don't know what this says about me,
but like doing my own laundry. Right before then, my
mom did all my laundry. My kids now do their
own laundry. I've learned from that. But like, going out
there and managing your own finances is a tall task,
especially in a world where we're drawn by marketing and
(51:06):
images of celebrities and just popular culture. The things that
it espouses is being good often cost a heck of
a lot of money. And so I just love that
Professor Kristen Carreot is in the trenches talking about these
things with her students, and it sounds like it's having
a massive impact. I think just a couple of the
(51:27):
big things that struck me in this conversation. I love
when she talked about unlearning as a necessity. And the
truth is, yeah, we're you listening to this podcast. You're
not starting from scratch. You are not like an empty
piece of paper where we can just kind of start
writing something fresh. Like there might need to be things
(51:47):
that are scribbled out. We might need to break out
the white out right and just go to town on
some of the pages that you have written, whether it's
in the things that you think are the most important
when it comes to money, whether it is is in
the money habits, maybe that you've handled some of our
bad habits, so know that, Hey, what do I need
(52:08):
to go back to the drawing board on and maybe
rethink what's maybe a money script that's underlying a lot
of how we behave and think about and handle my
money that I haven't questioned, And maybe I need to
go back and question that. So unlearning can be a
necessity in making progress with our money. I also really
(52:30):
appreciate it, and I think this is something we talk
about on the show regularly as well. Is truly the
un sexy stuff doesn't make it on social media, but
a lot of that un sexy stuff is what sets
you up for a lot of success, a lot of
extra margin in your life, and a lot of future optionality.
So it's it's not going to make the Influencer Hall
(52:54):
of Fame, So those decisions that you choose to make
that are better for your ultimate financial reality. It just
what struck me when she was talking about that was
the basic example in the book The Millionaire next Door,
which is super old school personal finance book. And when
you hold up two pictures to somebody, one of a
guy driving or a gal driving a Toyota Corolla in
(53:17):
front of a eighteen hundred square foot house wearing just
super normal clothes, and then you hold up another picture
of someone in a six thousand square foot mansion and
a fancy Jaguar or something like that, in a decked
out suit with a Gucci bag. Well, which one of
these is the financially successful person? And immediately almost everybody
(53:38):
would point to the person with a really nice house
and car as being the financially successful one. But the
truth is being financially successful often doesn't present itself on
the surface. The more we spend to show that we
are living a certain kind of life, often it's funded
through debt through credit cards. Not always right. It's okay.
(54:01):
Some people do have fancy houses and cars and they
are also financially successful, great investors, and have tons of
margin in their lives. But I'm just saying, I guess,
on average, like what is true, and the truth is
that the person who spends less and invests more of
their money is going to be more financially successful and
have more future options in their lives. So I was
(54:23):
really thankful that she took the time to have this
conversation with me. Today. You can pick up her textbook
if you want a personal finance textbook, if you like,
want the whole kit kaboodle straight tom A.
Speaker 3 (54:32):
Vane.
Speaker 1 (54:33):
I think it's a really it's really cool. She did
a great job with it. So thank you as always
for listening to this podcast. Thanks for listening to this episode.
We will be back with a fresh Friday Flight episode
in a couple of days until next time, best friend
out
Speaker 3 (55:02):
Yeah,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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