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Today on the Consumerism Commentary Podcast, Tom Dziubek talks to MD, founder of the personal finance website Studenomics.

MD talks with Tom about topics such as his inspiration for Studenomics, how he got through college without having to pay off student loans, and also about things that people in their early twenties need to consider if they’re thinking about buying a home.

Consumerism Commentary Podcast
Buying a House In Your Early 20s: S06E16 / 173

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Table of contents

Consumerism Commentary Podcast[00:00] Introduction from Tom Dziubek
[00:36] Interview with MD
[00:53] MD’s inspiration for Studenomics
[02:22] The focus of Studenomics
[03:14] MD’s college years
[03:53] Starting off at a community college
[06:00] The start of the blog
[08:31] Paying for college
[13:32] Buying a home in your early 20s: Income considerations
[15:26] Considering your savings
[16:37] Taking into account your relationship status
[18:42] The need to be somewhat handy
[20:51] MD’s current projects
[23:53] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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I’ve written extensively about taking control of your finances. One aspect of the ability to succeed with your financial goals is making active, thoughtful decisions pertaining to your use of money. Uptal Dholakia is a professor of management at Rice University in Houston, and he is currently conducting research pertaining to self-control and decision making as they pertain to personal finance as well as other personal issues.

I’ve always been excited to participate in academic research; I was a frequent subject for Princeton University’s cognitive psychology department when I was much younger, and I continued through college by participating in occasional research studies conducted by graduate students at my own university. In fact, when I attended a psychology class my sophomore year and was considering the pursuit of a minor in psychology, participation in graduate research studies was mandatory. Regardless of the requirement, I enjoyed it.

Zener CardsProfessor Dholakia is inviting Consumerism Commentary readers to participate in this study. In order to participate, all that is required is to answer questions on a web-based survey.

I completed the survey last night, and it took less than ten minutes to complete. The questions were not difficult, but they did make me think about my decision-making process and how I allow myself to succumb to impulse decisions. There are some questions about demographics at the end of the survey, but the information will be held confidential and reported only in aggregate.

The professor has agreed to share the results of the research with Consumerism Commentary, so once the analysis is complete, you can expect an article discussing the findings published here.

Please help further research regarding the psychology of personal finance by completing the survey here. No electrodes need to be connected to your body and you won’t need to receive any electric shocks.

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There’s a chance you could become a multi-millionaire after repeatedly slamming your head into other people and suffering through the resulting mini-concussions and minor brain damage, but not everyone can be a professional football player in the NFL. There’s a safer and less harmful path toward financial independence.

Cognitive ability is an important part of your human capital, and your human capital measures, among other things, how likely you’ll be able to support yourself financially, particularly through difficult economic times. Cognitive ability is important because many jobs requiring intricate skills and the best careers that offer opportunities for advancement require the ability to learn and adapt, and that’s the core of cognition.

The ability for the brain to process information changes throughout one’s lifetime, and without stimulation, cognitive ability can decline. When companies like Google or SAS ask puzzling interview questions, they’re testing, among other things, cognitive ability. To be hired as a software engineer, you would need to show that you have a strong command of whatever primary programming language is popular at the time, but in an industry that changes so quickly, strong cognitive ability will show that you can learn and adapt to the changing environment.

Rubik's CubeThe key is instilling cognitive ability in children at an early enough age. As we get older, we can continue to refine cognitive ability, but only to a small extent. These tactics may no longer work for me; the best adults can generally do to keep cognitive skills sharp is to get enough sleep and exercise, and eat nutritious food.

If you’re interested in helping your child prepare for a life full of challenges, there are some tactics you can employ.

Learning a new language

As a child, I enjoyed learning languages. I never became fluent in anything other than English, but I enjoyed the process of learning the rules. As a kid, I was fascinated by languages, and spent time learning a little bit of as many as possible. Like many kids, I learned a little Spanish from Sesame Street. I learned Hebrew and tried to teach myself Yiddish. I studied Latin in middle school, was taken out of usual classes to study Greek independently, and took five years of German. I learned programming languages like BASIC, Pascal, lisp, and C. And as a younger kid, I dabbled with creating my own languages and codes.

Music and mathematics have features in common with languages, as well. Music, particularly learning to play an instrument instead of just listening to Mozart, has been shown to improve cognitive ability.

As an adult, learning a new language or a musical instrument is a time-consuming task. There are programs that help frequent travelers learn languages quickly, but you could get a bigger cognitive benefit by learning a language through a more academic curriculum or through immersion. Rather than focusing on key phrases that help you get by in a foreign land, incorporating a new language into the way you think can help keep your brain active. On the other hand, young children, even those learning their first language or languages, can often learn multiple languages concurrently without being confused. Language skills not only improve cognitive ability, but they can make someone a more marketable employee around the world or increase the chance of international success in their own businesses.

Completing puzzles

Elementary school is a great time to focus on solving puzzles whose solutions require thinking “outside the box.” I seem to remember this being called “lateral thinking” when I was younger, but I don’t know if that term is widely used today. These are the types of puzzles that stymie job applicants at companies like Google. But puzzle solving as an adult won’t have the same impact as puzzle solving when the brain is at its most impressionable.

  • Logic puzzles are kind of like the game Clue. You often have two or more dimensions to work with, and the goal is to pair each of the dimensions together based on a limited number of clues. A grid helps eliminate incorrect pairings to discover what’s correct. The more dimensions included in the puzzle, the more brain power necessary to solve the puzzle.
  • For a child, a Rubik’s Cube can be an engaging puzzle. While the answer now comes packaged with the toy, and there are numerous Youtube videos describing how to solve the puzzle in about twenty moves, the cognitive challenge is in working to find patterns of movement that move closer to the result.
  • Text adventure games open up a child’s mind to being able to control their environment. Video games have changed since I was a kid, but I enjoyed the early text adventure computer games like Scott Adams’ Adventureland. (Classic game lovers can play Adventureland here.)

Reading and writing

Reading and writing help develop important cognitive skills focused on processing information the same way they’ll need to make sense of problems as adults. Writing, particularly creative writing, improves the command of language and can help children find clarity when expressing their ideas. Writing is a skill that will easily set someone apart from the competition, as might be necessary in tough job markets. I’ve personally seen atrocious written communication among co-workers throughout the many jobs I’ve had. I will never say I’m a great writer, but these skills are lacking in my former non-profit and corporate environments.

When I compose a well-worded communication, the supervisors shouldn’t be surprised. Every employee with a college education should be able to express himself or herself somewhat eloquently.

These cognitive skills nurtured at an early age can help prepare children for financial success in life. The best careers need smart and flexible employees to take on unforeseen challenges. People often predict what the hottest careers may be one generation from now, but the specific opportunities are irrelevant if children are prepared today to handle any problem that presents itself.

What did you do as a child to improve your cognitive ability? If you have children, how are you helping them prepare for the future?

Photo: Don Wright

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Today on the Consumerism Commentary Podcast, Bryan J Busch talks to Kathy Pickering, Executive Director of H&R Block’s Tax Institute.

They discuss the difference between smart investments vs. emotional decisions, the importance of financial planning, and how most people are better off just buying an index fund and ignoring investment gurus.

Consumerism Commentary Podcast
Tax Law Changes in 2012: S06E13 / 169

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Table of contents

Consumerism Commentary Podcast[00:00] Introduction from Bryan J Busch
[00:34] Interview with Kathy Pickering
[00:48] Do an annual review of life changes
[01:26] Extending the Payroll Tax Holiday
[02:43] Federally declared disasters and casualty losses
[04:39] Energy efficiency credit (check the list at energystar.gov)
[05:51] American Opportunity Credit for college students, tuition and fees deductions, and the Lifetime Learning Credit
[08:16] Tax credits for adoption
[11:10] Credit for some plug-in cars
[12:10] Brokers are now required to report cost basis of the sale of stocks and securities
[12:59] Health care reform affects on individual and small business taxes
[17:59] Expired hiring credits
[18:55] Changes to be aware of for 2013
[21:31] E-filing is heavily encouraged and improved
[23:56] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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Good Debt and Bad Debt

by Flexo
See-saw

Misuse of credit can destroy a family’s financial life. A household can crumble under the weight of debt, whether it has increased from a poor house-purchasing decision, a drastic change in the real estate market, a shopping addiction, an unexpected medical bill, or the lack of preparedness for an emergency. It’s no surprise people consider ... Continue reading this article…

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Could You Survive at the Poverty Line?

by Your Finances Simplified
Thrift store

This guest article is written by YFS, owner and author of Your Finances Simplified. YFS was born and raised in west Philadelphia and is now a financial adviser, IT contractor, landlord, and treasurer of a non-profit. If you and your family of four received an annual income of $22,350, could you survive? You would be ... Continue reading this article…

78 comments Read the full article →

PayPal Makes Accepting Charity Difficult

by Flexo

Around the holidays, for-profit companies see an opportunity to do something charitable, even though they’re not technically registered non-profit organizations. The concept reminds me of college. I was in my university’s marching band, and we frequently traveled as a group to performances. At the end of the trips, someone on the bus collected money from ... Continue reading this article…

8 comments Read the full article →

Boost Your Human Capital: Start Early

by Flexo
Baby

Your human capital is just as important as your financial capital. In fact, it wouldn’t be a stretch to consider your human capital, your potential to become financially independent over time, more important than your net worth at any one particular time. Over the past few weeks, I’ve been writing in depth about ways to ... Continue reading this article…

7 comments Read the full article →
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