Personal Finance: It’s Not Just Personal. A review of Gaby Dunn’s Bad with Money
Skimming through the “Personal Finance” section in a bookstore in New York City, I was drawn to pick out this specific book from the bookshelf. The title of the book caught my attention, not because I am bad with money, but because I wonder why people are bad with money. Gaby Dunn’s book, “Bad With Money: The Imperfect Art of Getting Your Financial Sh*t Together,” offers a fresh perspective to individuals who need to make better financial decisions. Dunn incorporates interpersonal analysis to explore why we are bad with money. Her proposed solutions to common financial issues are mostly recommendations (based on her personal experience) that individuals can implement. From Dunn’s point, I comprehend that being bad with money is a result of a grander, structural issue within the United States. To sum up the argument, Dunn expected the readers to first find out the conscious or subconscious influence they got from their past, then echo the patterns or rebel against them, in order to fix the fundamental problem: your conception of money (Dunn 11). This is the most significant point of the book, as most of the other arguments Dunn made could be referenced to this main point. Dunn’s perspective is similar to the adage “Your family is your first school.” When coming up with a solution to fix bad money habits, the readers should find the root cause of the problem rather than blaming their family.
Similar to Dunn’s point, my opinion is that the financial illiteracy of Americans stems from a structural issue. However, our views diverge on the solution, as I believe the government should take action to solve it. According to a Forbes article, “44% of Americans don’t have enough cash to cover a $400 emergency” and “33% of American adults have $0 saved for retirement” (Pascarella 1). This further supports my point that the issue that needs to be addressed goes beyond simply being able to retire or having a cushion for medical emergencies. It is about a greater social issue of lacking financial education and passing down bad financial habits for generations. The social issue then results in a stagnant socioeconomic status hierarchy and a toxic consumerist culture, the latter of which leads to the “gig economy” with an emphasis on quick money, hustle life, and employment insecurity (Dunn 86). Americans need to keep working like slaves to support their spending in order to recover from the mental distress from overworking and overstimulation in modern life, perpetuating the cycle. To bring the seriousness of the financial illiteracy issue into perspective, according to a CNBC article “Op-ed: Make financial literacy in underserved communities a national priority” by Dr. Joanne Li, Dean and professor of finance at Florida International University College of Business, “the U.S. adult financial literacy level, at 57%, is only slightly higher than that of Botswana, whose economy is 1,127 percent smaller” (Li 1). Li found that there is a high correlation between one’s financial literacy with their education level (Li 1). Referring to my earlier point, Americans making bad financial decisions is a structural social issue, which is why the personal solutions that Dunn proposed can be even more powerful with some structural solutions from the government. If the government makes an effort to target the core problem by providing financial education to high schoolers and their parents, the results will directly deliver to underserved communities and help them make better financial decisions.
Dunn begins by contrasting people’s comfortable attitudes discussing their favorite sex position and their offended reaction when asked to share how much money was in their bank accounts to highlight the underlying issue of lack of financial awareness in an average American. To further convey the lack of financial awareness, Dunn focused on addressing the common personal finance issues in modern society: emphasizing “quick money” and “enjoying the moment without worrying about the long-term future”. Examples of “quick money” financial decisions include the trend of getting unstable freelancing work instead of secured jobs with good benefits, the surge of credit card debt, and the overburden of student loans after college. Besides sharing personal stories, the summarized suggestions at the end of each chapter are useful since those are what the readers cared about learning the most (I strongly suggest you go check them out). To illustrate, Dunn drew on the expertise of Anna Ivey, former dean of admissions at Columbia, during a discussion of student loans. Instead of simply accepting the financial award letter, Dunn recommended that readers negotiate their financial aid rewards, offering specific suggestions such as reading award letters attentively, comprehending interest rates, and taking into account the starting salaries of desirable professions when selecting a major (Dunn 36).
Students who do not receive financial aid have to look into student loans as an alternative path to pay for college tuition. Dunn calls out the absurd phenomenon that people normalize taking out gigantic amounts of student loans they cannot afford just to attend college, hoping they could be “successful” and be financially free afterward by mentioning that “making financial decisions based on competitiveness and entitlement can [backfire] you” (Dunn 37). Taking out an enormous amount of higher education loan could be too big of a financial decision for young and naive high schoolers to make, especially without fully understanding the consequences of not being able to pay back in the future. How society defines “success” overall has not changed: having a good job, a nice family, and owning a house, except the omitted truth that employment conditions are constantly shifting structurally. In my parents’ time, they really value the benefits of their jobs and believe that higher education (including postgrad education) will lead them to better jobs and better pay. However, this is not what happened in my generation, employers traded good benefits to employees in exchange for slightly higher pay, there is no job security, and earning a degree becomes so common that it is a misconception that higher education will get you higher pay (it is the position you were hired for that matters). People should still go to college, but the tuition should be more affordable, in accordance with employment needs. Colleges could stop overcharging innocent students for their dream and eagerness to succeed.
While Dunn’s argument about making better financial decisions with micro-level effort (changing personal financial habits) could be a straightforward way to start, the amount of financial knowledge is still the key factor that determines an individual’s ability to climb up the social ladder. This is where macro-level government intervention kicks in to make an impact in improving the overall gap in financial literacy. Financial programs that are already out there for underserved communities include tax preparation assistance, financial coaching on how to manage credit, home purchasing advice, and resources for the unbanked population (Li 1). If the audience identifies themselves as someone who needs extra assistance, they should not miss these readily available FREE programs. This is yet another opportunity for our government to invest in improving financial literacy. The government can put in more effort advertising these programs and work on making financial literacy courses a mandatory school requirement considering how much influence it will place on people’s life decisions in the future.
In addition to financial courses, to further practice financial awareness, the readers should recognize how modern consumerist society impacts their spending habits and financial decision-making. The materialistic society creates the problem of feeling entitled to an object and wanting to stay competitive with those around us (in person or online) in the ability of possessing an object. Dunn mentioned in her book that “attaching self-worth to material achievement or to things largely out of your control is not healthy” (Dunn 37). Living in a society that promotes the dysfunctional money view of “spending to relieve stress” makes me ponder whether our government should take responsibility in solving this social issue. People need to realize that the “stress” comes from overworking, overspending, and overstimulation of everything available around us (entertainment, information overload, mobile apps, video games, etc.) When people start shifting their focus and form attachments to objects just for a brief period of emotional stimulation, it creates mental problems and an endless cycle of overspending to relieve stress, just to generate more stress. A call for macro government intervention, for example, to add more regulatory controls over luxury taxes to mitigate competition in the consumerist culture, should be used to target a social issue like this one. Again, the resolution bifurcates with my earlier argument as government intervention is needed to solve personal financial problems.
As mentioned early in Bad with Money, family background is one of the most important factors that establish the future financial habits of Americans. Out of all the problems Dunn mentioned, I feel deeply connected to one of them since I have similar experience — the one that Dunn repetitively emphasized — the act of “enabling” from family that results in bad financial habits. Family members should not “enable” bad financial habits by helping to cover up or easily letting go of the consequences of the bad decisions. In the book, Dunn mentioned her bad financial decision to do an unpaid internship out of town, knowing that she cannot afford it. However, when her grandma helped her cover one month’s worth of rent, it “enabled” her to keep her bad habits of living paycheck to paycheck since she did not get punished to actually learn her lesson. Dunn’s father also suffered from “enabling”, as he believed he was invincible after getting away with drunk driving, but this experience led him down a path of addiction that he could not recover from (Dunn 63). Crystal Raypole defined in her Healthline article that “enablers” describes someone whose behavior allows a loved one (the one being enabled) to continue self-destructive patterns of behavior (Raypole 1). Enablers usually did not do it intentionally to harm their loved ones — it is yet another example of the subconscious influence they got from their past or family background. Adding onto Dunn’s note, to avoid falling victim to an “enabler,” it is crucial to understand what actions lead to enabling. BRC Healthcare summarized six enabling behaviors for readers to assess if their family or themselves are having enabling behaviors, for example: ignoring or tolerating your loved one’s destructive behavior or providing excessive assistance financially (BRC Healthcare 1). It is so easy to fall into one or more of these criteria, but that is why it is important to turn unconscious ignorance into conscious awareness of the problem such behavior causes. One proposed solution that BRC Healthcare provided to overcome enabling behaviors is to “empower” your loved ones instead of “enabling” them. The major difference between the two is to help your loved ones change their behaviors on their own through guidance, teaching, and enforcement of consequences of their own actions (BRC Healthcare 1).
Dunn speaks from the perspective of a sister who has experienced the low of personal financial crisis in her life by sharing her story about her bad financial decisions. Dunn then interweaves pieces of financial advice with the stories tracing back her journey to discover what are the potential factors that create the current situation. This way of storytelling makes it so much easier to read compared to reading highly technical books of a financial guru (to persuade you that they are super knowledgeable, but are they?) Dunn’s candid tone makes the book not only easy -to -read, but fun -to -read. The book would perfectly capture the audience she tried to reach — the young teens who are about to start making financial decisions or grown adults who need to get a grasp of the basics of financial knowledge. Luckily, the government did attempt to start programs such as the Federal Financial Literacy Reform initiated by the U.S. Department of Treasury that would help Americans establish good financial habits since their teenage years. Many states like Alabama, Florida, Georgia, Iowa, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Rhode Island, South Carolina Tennessee, Utah, Virginia have state requirements for high schools to offer financial literacy courses in school. According to Ramsey Solutions, this requirement is an “unfunded mandate” (Ramsey Solution 1), the funding problem could hinder other states from putting in the same effort in resolving the financial illiteracy problem. The funding for mandatory financial literacy courses for States is yet another opportunity for the Federal government to intervene and consider as one of the remedies to the structural financial issue. The U.S. government can distribute funds for States to come out with their own academic programs and address the financial literacy problem effectively.
Reconnecting to Dunn’s argument, after identifying the patterns of conscious or subconscious influence from the past, Americans would need education to help them come to a conceptual realization and reflect on how they can act upon the realization (to either echo or to rebel). This links back to my argument in the urgency of resolving the issue of financial illiteracy in Americans: without fundamental financial knowledge, even if people recognize the patterns of their financial habits, they do not have the proper tool to assist them in making appropriate plans to improve them accordingly.
Work Cited
BRC Healthcare. “Enabling vs Empowering.” BRC Healthcare, 27 July 2021, https://www.brcrecovery.com/blog/enabling-vs-empowering/.
Dunn, Gaby. Bad with Money: the Imperfect Art of Getting Your Financial Sh*t Together. Atria Paperback, 2019.
Li, Joanne. “Op-Ed: Make Financial Literacy in Underserved Communities a National Priority.” CNBC, CNBC, 10 May 2021, https://www.cnbc.com/2021/05/02/op-ed-why-financial-literacy-needs-to-be-a-national-priority.html.
Pascarella, Dani. “4 Stats That Reveal How Badly America Is Failing at Financial Literacy.” Forbes, Forbes Magazine, 28 June 2021, https://www.forbes.com/sites/danipascarella/2018/04/03/4-stats-that-reveal-how-badly-america-is-failing-at-financial-literacy/?sh=539c50942bb7.
Ramsey Solutions. “Which States Require Financial Literacy in High School?” Ramsey Solutions, Ramsey Solutions, 2 Aug. 2022, https://www.ramseysolutions.com/financial-literacy/states-require-financial-literacy-in-high-school.
Raypole, Crystal. Reviewed by Legg, Timothy. “Enabler: Definition, Behavior, Psychology, Recognizing One, More.” Healthline, Healthline Media, 27 June 2019, https://www.healthline.com/health/enabler#:~:text=The%20term%20%E2%80%9Cenabler%E2%80%9D%20generally%20describes,don't%20do%20so%20intentionally.
