It's been a couple of months. By now the kids in your life have either broken or become bored with the collection of electronics and other Chinese-made stuff that they wanted for Christmas.
For the rest of this year, what can you give to those kids that really matters? What will actually help their life in the years to come?
Here's an idea - you can help set them on the path to one of the most important life skills they can ever gain: real-world numeracy.
Numeracy is more than the ability to do math. Please follow below the orange algebraic operator for more on what it really is and why it matters so much.
First, let's try for a useful functional definition of applied numeracy. The UK Site National Numeracy gives us this:
“... an individual’s capacity to identify and understand the role that mathematics plays in the world, to make well-founded judgments and to use and engage with mathematics in ways that meet the needs of that individual’s life as a constructive, concerned and reflective citizen”.
That's not bad, but let's simplify into:
The ability to make informed judgments on decisions involving quantities, especially of money.
And let's get right to why it matters so much.
Out of many important reasons for numeracy, there are three that stand out, and the first is for any person to protect himself or herself from financial predation. In this diary, we're going to skip the other two big reasons, which are (a) to avoid being deceived in our national discourse, and (b) the big opportunities in science and technology careers.
The numbers have always mattered, but never as much as these days. That's because so much of our lives are governed by abstract numbers that are disconnected from observable physical quantities. Historically, in many cases people were able to see real-world quantities of the materials in question. Now, it's numerals on a page and a place to sign, or to click that you agree to the terms.
In particular, the spread of easy (but sometimes very expensive) credit for consumer purchases makes it possible to make bigger purchases, and thus bigger mistakes, on any given day.
Make no mistake about it - for many companies that we interact with every day (both employers and sellers), their business success depends not on delivering something of quality to you, but in getting the best possible revenue from each transaction - gaming the numbers.
The only defense against this is a healthy dose of numeracy.
These guys really know how to run the numbers
Values Over Time
The easiest place for anyone to create numerical deception is in the area of quantities over time, such as a series of payments. This is because time series numbers are much less intuitive than any set of quantities existing in the present moment, and also because the outcome over time can be very sensitive to a small change in conditions.
A classic example is an investment manager who takes an extra 1.5% of your invested money each year - it seems like a small amount, but by the time you retire, that person or company has made off with 20%, or 30%, or even more of your money. Check out the graph to the right, showing the effect of 1.5% in extra annual fees over 30 years.
Far more egregious examples abound, in the areas of short term loans like payday or auto title loans, or rent-to-own offers.
At its very simplest, a core part of evaluating any purchase is to understand and fully internalize the sum of all needed payments.
Every day in our consumer lives is an exercise in navigating the minefield of bad deals relating to quantities of money over time.
How you can help the young people in your life
I believe that the most important numeracy skill that you can help any young person with is to show them tangibly how quantities add up, and especially how their decisions today can affect the future.
On a personal level, I look for opportunities every day to help my daughter figure out quantities around us. How many minnows are in that tidepool? How long will it take us to get to Grandma's house? How many days old is she? Is the grocery bill at checkout going to be over $100 or under?
The key skill is not so much in the mechanics of the math, but rather is in recognizing when to do the numbers - defining the problem.
A few weeks ago, I had a proud parent moment (one of many, of course). I asked her whether she thought it would be a good deal to pay $50 a week for the absolutely biggest, newest, 3-D TV available.
Her answer was a question: "How long do you have to pay?" Then we did the math together based on the answer I gave (three years), and found the answer: Really bad deal.
I must be doing something right.
The greatest threat to the well-being of the average American is not a bad guy with a gun - but it might be a bad guy with misleading numbers and an agreement for you to sign.
Protect the ones you love, with the gift of numeracy.
Numeracy Resources
National Numeracy (UK site)
National Numeracy Network (US)
Teaching your kids how to invest
Numeracy unfortunately has not arrived as a mainstream discussion topic. One evidence of this is that many, or perhaps most, online references to numeracy are academic journal articles that are not available to the public without payment.
Final Note: There are so many things in life that matter more than money, and dwelling on finance can hurt your mental health. BUT - protecting the money you have from the extractive efforts of others is sadly a required life skill.
James R. Wells is the author of The Great Symmetry, coming in April 2015.
In an asteroid in the Aurora star system, exoarcheologist Evan McElroy has made a discovery about the Versari, a long-departed alien race. Material, he thinks, for some great research papers. But Evan’s sponsor, the Affirmatix family of companies, realizes that they can make huge gains from the new finding, if it is kept completely secret.
As Evan flees for his life, he finds that his trajectory has reawakened the long-buried struggle of the Infoterrorists, who believe that all knowledge screams to be free, against those who maintain the True Story that holds all of civilization together.
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