Thursday, February 16, 2023

Barbservations About Get Smart With Money

I recently watched the Netflix documentary film Get Smart With Money (1:33) to prepare for a discussion of the film with several dozen professional financial practitioners who are members of AFCPE. Below are my Barbservations about the film from the lens of a long-time financial educator:

Content and Format


Diversity and Demographics- The film featured four case study characters, each with a financial coach assisting them for an entire year. It was great to see people of color featured in both “client” and “coach” roles, but there was negligible inclusion of older, even middle-age, adults.


Financial Experts- All four of the “coaches” connected very well with their “clients.” However, they were all influencers (podcasters, book authors, YouTubers) without designations such as CFP®, FFC®, and AFC® and the training and depth of expertise that these credentials provide.


Hopeful Ending- Despite challenges such as loss of income and a car breakdown, each “client” made progress over the year. The film made it look easy, due to its time constraints, but it undoubtedly took hard work and discipline. Viewers learned that they, too, can take charge of their finances.


Key Financial Concepts


Financial Freedom- Money is a tool to reach personal goals, not a goal in and of itself. People can buy freedom with money; i.e., freedom from a 9-5 job or long commute. Financial freedom is a core tenet of the Financial Independence, Retire Early (FIRE) philosophy.


FIRE Math- Many FIRE proponents suggest saving 25x living expenses as “the number” to be able to declare themselves financially independent (e.g., $100,000 x 25 = $2.5 million). Aggressive savings was recommended but is very difficult to do in real life.


Big Three Expenses- The largest expenses for most families, with the greatest potential for expense reduction, are housing, transportation, and food. Several of the “clients” made major changes to their food shopping habits and one decided to downsize their house to save money.


Long Term Investing- One client was wisely instructed to make regular investment deposits to build wealth. While the “coach” suggested a S&P 500 index fund and I prefer a total stock market index fund for broader U.S. stock market exposure, long-term savings is key to success.


Four Questions- Author Tiffany Aliche recommended four questions to ask before buying something. Do I need it? Like it? Love it? and Want it? Focus spending on needs and loves and always build a cushion for unexpected expenses into your budget because “stuff happens.”


Credit Card Debt- High-APR (interest rate) debt on credit cards is like cancer. You have to cut it out. “Clients” in the film reported having “a huge weight lifted from their shoulders” after repaying what they owed. One person in the film called freedom from debt “life-changing.”


Financial Education- There is no price tag on financial education. Knowledge gained about managing money is priceless and can help propel people forward. Recently, more states have recognized this and have passed legislation requiring a personal finance course for graduation.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

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