The Squid Game is an intense look at the desperate measures people will take to get out of debt. While the story is fiction, the lessons we can take away about class divide, the reckless choices made when in debt, and the way money can reveal someone’s true character, are hitting home with so many of us.  ** spoiler alert**

Money Lessons for Grownups from the Netflix series "The Squid Game”

• You can’t judge people‘s wealth and success based on appearances.

• Money makes us do illogical, and often illegal things.

• Manage the pressure otherwise it will consume you.

• Betrayal comes from the people you trust the most.

• Strength is not always stronger.

• Wealthy people can abuse the vulnerability of people who have financial problems.

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Full Transcript:

Bobbi Rebell:
I hope you guys are all celebrating some big adulting milestones this season and you know what? Finding the perfect gift for those celebrations can be kind of tough. I have the solution over at grownupgear.com. We have adorable hats, totes, mugs, pillows, Ts and seriously, the most cozy and comfortable sweatshirts.

Bobbi Rebell:
They're all on grownupgear.com and all at affordable prices. We even now have digital gift certificates if you can't decide. Use code grownup for 15% off your first order. Buying from our small business helps to support this free podcast. You know what? We really appreciate it. Thanks, guys.

Bobbi Rebell:
You're listening to Money Tips for Financial Grownups with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup and you know what? When it comes to money being a grownup is hard but together we've got this.

Bobbi Rebell:
Hey, grownups, welcome back. We are going to do something very special this week, starting with having back my number one, most favorite ever co-host, Mr. Neil Kaufman, aka, my husband. Welcome back, Neil.

Neil Kaufman:
Back on popular demand and for those of you that sent me fan letters, thank you. I appreciate it.

Bobbi Rebell:
Yes, Neil is poised to become a regular co-host on this show. And speaking of regular, a lot of the regular listeners do know that you were featured in our summer watch series where we talked about money related streaming shows and the lessons from them. Well, as of now, we're not going to do a whole series for fall, but there is a show that everyone, including Mr. Neil Kaufman, I should say, everyone is talking about that has some pretty intense money lessons.

Bobbi Rebell:
That show is the Netflix series, the Squid Game. Neil and I have been watching the series. We've already had some pretty intense discussions about it and so of course, I recruited him to come back to the podcast. So Neil, welcome.

Neil Kaufman:
Thank you. We're here to talk about Squid Game, which for those of you that have been I guess living under a rock and don't know about the Squid Game or haven't seen it yet, because it's the most popular show in lots of countries, it's a nine episode series about the lives of 456 people, all who need money.

Neil Kaufman:
They need it for lots of different reasons. They come from all walks of life. Some of drowning in debt, desperate for not being able to pay off their debt. Some people are thugs. Some people are white collar. Some people are just unlucky. But what they all have in common is they need money and they are willing to participate, willingly, they want to participate in this game to try and survive.

Neil Kaufman:
And they've got to play six Korean children's games where if you're the winner you're going to get a large sum of money, $46 billion Won, which is $38 million U.S. dollars. It's a high stakes game.

Bobbi Rebell:
It's a lot of money. Okay. So I want to make sure everybody knows that we have watched all of the episodes and we are not going to be able to remember what to say and what not to say so there will be spoilers. So this is your cue, if we've interested you in watching the Squid Game and you haven't watched it yet, pause. Go watch it. It's nine episodes.

Bobbi Rebell:
So for most people they could binge it in a day or two. For me, because I fall asleep during everything, it took a little bit longer but Neil was patient. Go watch the Squid Game and then come back right here. This is where the spoilers are going to start. Starting with the fact that the main character is presented as sympathetic but a lot of eye rolls.

Bobbi Rebell:
I mean, he's massively in debt. He gambles away money that his mom ... By the way, he's 40 something and living with his mom, speaking of not being a financial grownup, of course. He's asking her for more money to buy his daughter a birthday present. He gambles it.

Bobbi Rebell:
All kinds of things happen but just the characters, it's not like they're all that sympathetic. A lot of them are basically making big money mistakes on their own and trying to find get rich quick schemes to begin with. Right, Neil?

Neil Kaufman:
He's a likable guy but he's a schlump. It's just the guy, he does everything wrong. He's divorced. He's a gambler. I mean, he's got all the classic tell-tale signs of just being a not responsible person, both financially and emotionally. I mean, he doesn't even maintain a decent relationship with his daughter. I mean, or his mother.

Neil Kaufman:
Yes, he lives with his mom and we've heard that story all too often but he betrayed his mom. He canceled the insurance, her health insurance, which no shock there, an aging woman, she needed the insurance.

Bobbi Rebell:
Yeah, that's another big spoiler. It comes up later. The other spoiler is that he wins money gambling. Okay, so now in theory you would think he would use this money that's he's gambled ... he wins on this horse betting, which is another thing that comes up. They're betting on horses. Is it different to bet on horses than humans? Think about that, everyone that's seen the show.

Bobbi Rebell:
But, he wins a huge amount of money and instead of using it to pay off his debt he starts gambling away with it again. He doesn't pay off the debt that owes. He gives a big tip to the person in the window and he wants to go shopping and buy extravagant things for his daughter that he's promising her all this stuff.

Bobbi Rebell:
Even when he gets her a present he does it through a gambling game, a children's game where he picks a present, which later on ... We don't have to spoil this but let's just say it's not a child appropriate gift that he ends up getting her and it's really just the ultimate symbol that this guy just can do no right and he's his own worst enemy really.

Bobbi Rebell:
So, Neil, we've set up the premise, we've got this guy, fast forward a little bit. He runs into someone who's effectively a salesman who convinces him to go into this game and he meets a van, gets gassed so he doesn't know where he's going. And he ends up in a dorm with 455 other people who are competing in this contest and basically they say that anyone that is not eliminated at the end of six children's games will win a huge prize of money. As you mentioned, the equivalent of $38 million. But there's more to it.

Neil Kaufman:
Yeah. So they're playing these games but they don't realize it until they get into the first game, what it's really all about. So the idea is some people win the game, some people lose the game. If you lose, by the rules that are put in place, you are effectively eliminated from the game. And elimination means death.

Bobbi Rebell:
Right. And note, for the very first game they don't know that. They just know you're eliminated and they assume, I think understandably, that they would just go home. It becomes clear very quickly and it's a very gory scene that being eliminated is death.

Bobbi Rebell:
So after that, through a little TMI, we won't get into it. The players do choose to go home. They end the game and they play one game and by going home they have forfeited the opportunity to win the money and they go back to their dreary lives. And we talked about the main character but many of the other characters have very unfortunate situations with money.

Bobbi Rebell:
They're all desperate for money, to either save face. There's an immigrant theme here, to get their relatives out of North Korea, into Korea, to feed their families. To pay off gambling debts. All kinds of different reasons why people need the money. As Neil mentioned, white collar crime and so on.

Bobbi Rebell:
They go back to their lives. What's shocking to me is that of the people that go back to their lives and have the opportunity to not die in pursuit of this money, 87% of them choose voluntarily to participate in a life or death game where it's pretty logical that most of the people are not going home with the millions of dollars.

Neil Kaufman:
I think it really shows the desperation. So they went into the game originally knowing or not really knowing that much about it but after they realize that it was a fight to the death and they would actually potentially sacrifice their life and they go back home.

Neil Kaufman:
They willingly reenter it a second time, knowing what the consequences of their actions are. It may cost them everything but they're so desperate they'll still go ahead and play the game. 87% of them come back, which is really ... it just ... it boggles the mind.

Bobbi Rebell:
It is shocking and it also is shocking how the characters evolve through this process because they're in this bubble and they're not in contact with the real world any more. They're just in this world where they're surrounded by their ... in some cases they try to form teams and this and that but who's on your team can be very confusing. And it's confusing to know who to trust. And that's something that also goes to the theme of money, right, Neil?

Neil Kaufman:
It's really interesting. I'll tell you, choosing who's on your team, who's not on your team, I mean, I thought there was a part of the show where they were choosing teams for tug-of-war and nobody, nobody wanted to choose either the women or the old man to be on their team.

Bobbi Rebell:
Wait, but spoiler, we didn't know it was tug-of-war when they were choosing. They did not know what the game was. There was a presumption that strength mattered.

Neil Kaufman:
There was. There was a presumption.

Bobbi Rebell:
Which is also a real world perception very often that the strong men were the most desirable teammates. That was the perception, which is often the perception in real life too.

Neil Kaufman:
Yeah, no doubt. No doubt. And shock, maybe not shock, the team with the three women and the one old man, won the tug-of-war game against the men's ... the all men's team. Not so much for any other reason than it was the wisdom of the old man. He had life experience. He had some knowledge that he brought to the table.

Neil Kaufman:
And there was also the women in terms of how they all worked together as one cohesive team. So it was the mind that won over the power of many on the other side. It was a David and Goliath story and I love that but the point is, you've got to think broadly, have a different perspective. It's not always the obvious answer that wins.

Bobbi Rebell:
Another thing that's also interesting is that there might be a perception that everyone in this dorm, everyone playing this game was poor, maybe because they were born that way or just things beyond their control. But one of the characters that you found most interesting was character 218.

Bobbi Rebell:
He is someone that was the pride and joy of his neighborhood. We see scenes of his mother bragging about how successful he is. The main character knew him as a child and he was the big success of the neighborhood. He was working in finance but in fact, he had lost his investor's money and he still was in the outside world portraying this veneer of huge success. Nobody knew that he had had this huge financial ruin.

Bobbi Rebell:
And that's something that really resonated because very often people appear to have so much money and so much success in life but underneath there's nothing and sometimes there's less than nothing. And it's not always clear but there's a lot of reason to believe that this very wealthy appearing guy had maybe committed some crimes and really betrayed his investors. He was a bad guy.

Neil Kaufman:
I hate that guy. I mean, I got to tell you, even the way it wrapped up with him in the end and I'll get to that in a second. But I think it speaks to, I mean this guy had a pedigree education. He had the pedigree job. I think the lesson in that is don't judge people's wealth or success based on appearance only.

Neil Kaufman:
I guess it almost goes to what we're talking about these days around mental health issues. People that you think are okay, maybe they're not okay. Maybe they're not doing great. It's like that Instagram moment. It looks great from the outside in but the inside out is just terrible.

Neil Kaufman:
I think the life lesson here is the person who said that it's better to look good than to feel good, that person is wrong. The person that said clothes makes the man. That guy is also wrong. It's mental health. It's inner beauty. It's health. It's relationships that matter, not what your neighbors think, not what the valet who parks your car thinks or the stranger who sees on the street wearing whatever you're wearing.

Neil Kaufman:
You need to define a level of success by, I guess I want to say pay it forward. By the good words and things that you do and the impact that you make on others. It's those things that matter.

Bobbi Rebell:
Yeah. This show also makes some big picture statements about the growing gap between the uber wealthy and the poorer people in society and the things that the wealthy do. About two-thirds through the show, the series, we learn that this is a game that wealthy people are staging for their own amusement and it's compared by many people to things like Battle Royale and the Hunger Games.

Bobbi Rebell:
You have a lot to say about this. I mean, they come in, it's wealthy people really abusing the lower classes here who have financial problems instead of helping them. It's very cynical.

Neil Kaufman:
It's interesting. So wealthy people can abuse the vulnerable who have financial problems. No shocker there. I guess it's the theme for the decade. People hurting people who are already hurting, instead of lifting those people up in reality as opposed to the appearance of reality.

Neil Kaufman:
In the end what I liked was I think the last lesson of the show was that humanity wins. It's best to be your best. It's the best lesson so far in the show, which is sometimes people in power, people who seem to be doing good are not always doing good.

Bobbi Rebell:
And it's also interesting though, it makes a little ... well, a big statement. The main character early in the show is betting on horses. Later in the show the wealthy VIPs are betting on the contestants in this game. Is it saying maybe that are the wealthy and the poor doing the same human behavior? Is it just our human instinct to do this kind of cruel game?

Bobbi Rebell:
Obviously, the horses, I sure hope are alive afterwards, unlike the people but they're setting them up similar because the VIPs are very much gambling on the humans in this game. They are making bets and they're enjoying it and it seems like there's some parallels that the filmmaker or the series maker is trying to make there.

Neil Kaufman:
They're talking about objectification of both men, of women. They're talking about the abuse of power. I mean, it's a real statement that they're making here in terms of who's good, who's bad and sometimes who's good and who's bad is just a matter of perception.

Neil Kaufman:
So to your point, people betting on humans versus people betting on horses, is there a differentiation between them? I don't know but there's so many lessons in this story. I don't even know where ... there's so much. I read so much online about it and what I thought was interesting is how characters changed in the story too.

Neil Kaufman:
Like 67, I forget what her name is. I'm just going to refer to the characters by their numbers. It's easier. But 67, she started off as a hard character. She became a soft character in the end. It gives me pause to think about how people fall into two categories sometimes.

Neil Kaufman:
When people are put to pressure some people are like bits of carbon. You know what I mean by that? You put enough pressure on somebody and some people, like a bit of carbon, you put enough pressure on them and they turn into a diamond. They really shine like 67. She was playing marbles and her opponent gave up her life for her, which I thought was a selfless act.

Neil Kaufman:
It was amazing. She literally sacrificed her and not only was that an amazing act of selflessness but it rubbed off on 67. That's what I'm saying with that whole pay it forward thing. She became a better person for it and she did pay it forward, by the way, because in the middle of the night when she was hurting and there was an opportunity for 456 to kill 218 in his sleep, she paid it forward and she course corrected 456.

Neil Kaufman:
She brought him back on the tracks. She gave him ethics, gave him values again, which I thought was amazing as opposed to the character 218. So my whole other viewpoint is some people are like bits of carbon that you can turn into diamonds and some people fracture and crack under pressure.

Neil Kaufman:
This guy, 218, I was really disappointed in this guy. He manipulated Ali, number 199, played upon his naivete, tricking him into losing his life. He also betrayed all of the players in the beginning when he basically he knew the game, the honeycomb game, and he wouldn't share his knowledge with anybody else. He just looked out for himself only and I get it.

Neil Kaufman:
It's a game to the death but it was to the point where this person fractured so much from the pressure that not only did he betray all of his friends and then betray Ali and then he betrayed everybody at some point in the games. And he even slit 67's neck in the sleep. She was already dying and he killed her. What's the point in that?

Neil Kaufman:
In the end, his self-sacrifice, I got to tell you, it left me hollow inside. Hollow gesture from a dying man and he didn't even do it to give to 456 to win. He did it to give because he wanted the money for his own purpose, which was to share it with his family. So I get it but I'm telling you, it's a whole microscope of life on the two different types of people there, those that are good and those that are evil.

Bobbi Rebell:
I think the lasting image, because we need to wrap up in a minute. The lasting image for me is the final character, which is throughout the show, the series, they have this giant piggy bank hanging above the dorm that every time someone else dies the remaining players see more money coming in to this giant glass piggy bank above them.

Bobbi Rebell:
So it's like they're being driven by this character of this piggy bank that they can never stop thinking about it and how that will solve their problems, make their life better but in the end, as we know, it doesn't. It really doesn't and that's, I guess, the final spoiler, really. That the money doesn't change anything for the winner.

Neil Kaufman:
I got to tell you, there was one theme in there that really resonated with me on a personal level because I have seen this person in every company I've ever worked with. Betrayal doesn't come from people more often than it comes from people that you trust most. Sometimes your friends are really frenemies. I love that word, frenemy because you got to find out who your frenemies are sometimes.

Neil Kaufman:
Fake friends like Deok-su, number 101 and Han Mi, number 212. They were friends. They were friends but when 101 left 212 scorned by not picking her for ... we talked about the tug-of-war, didn't pick her. He didn't realize that 212 would ultimately be the death of him. So he burned bridges with her and she wound up throwing him off the bridge, which is kind of funny. It took him to his death.

Neil Kaufman:
So my lesson out of that was the kindness you show to others will always find a way of coming back to you or maybe karma is going to sting you for being ruthless in the end and that's what happened to 101.

Bobbi Rebell:
So on point, Neil. You're brilliant, what can I say. All right. Final thoughts.

Neil Kaufman:
I'm thinking that there's going to be a second season, the way they left it at the end there. He didn't get on the plane, 456 did not get on the plane to visit his daughter. He let me down again. He turned around and I think it's a hat tip to a potential season two.

Bobbi Rebell:
Yeah. I think so too. I mean, the rumor is and we're just laying down all these spoilers here but the rumor is that a season two might focus more on the VIPs and the police and the people behind the game and what's going on behind the scenes because they show us a little bit but I definitely want to know more about how this came about and what's going on.

Bobbi Rebell:
And we've got the brother, the police officer and that whole thing. So I would love to hear more about that and I'd love to see more about what ... I'm going to research more about what's been going on in terms of class divide in South Korea. I think that's really interesting and something we can talk about in our own country as well.

Bobbi Rebell:
So final, final words, Neil.

Neil Kaufman:
Tune into the podcast. Listen on Spotify. Tell us what you liked, what you didn't like. I'd love to hear from you.

Bobbi Rebell:
We love that. All right. And everyone, you can follow me and support the show on Instagram @bobbirebell1, on Twitter @bobbirebell. Let us know what you thought about it. Let us know if you want to hear more from Neil and more of our money related content reviews. I don't know what we want to call it, a synopsis, whatever. But be in touch and thank you for being financial grownups.

Bobbi Rebell:
Money Tips For Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart. Guest coordination, content creation, social media support and show notes by Ashley Wall. You can find the podcast show notes which include links to resources mentioned in the show as well as show transcripts by going to my website, bobbirebell.com.

Bobbi Rebell:
You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup. The podcast and tons of complimentary resources associated with the podcast is brought to you for free but I need to have your support in return. Here's how you can do that.

Bobbi Rebell:
First, connect with me on social media @bobbirebell1 on Instagram and bobbirebell on both Twitter and on Clubhouse, where you can join my Money Tips For Grownups Club. Second, share this podcast on social media and tag me so I can thank you. You can also leave a review on Apple Podcast. Reading each one means the world to me. And you know what? It really motivates others to subscribe.

Bobbi Rebell:
You can also support our merchant shop, grownupgear.com by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this.

Bobbi Rebell:
Thank you for your time and for the kind words so many of you send my way. See you next time and thank you for supporting Money Tips For Financial Grownups.

Neil Kaufman:
(Singing)

Author Ron Lieber returns to the Financial Grownup podcast to preview his new book "The Price You Pay for College”and share tips on the best ways to control college costs, including debunking some big myths about why college is so expensive and who gets how much aid, and why. 

Tip #1:

There is now a whole separate parallel track of the financial aid system called Merit Aid. Rich people can take advantage of it just as much as low income people can. Figure out whether a school offers it at all and in what volume and for the more selective schools that do offer merit aid, it is often quite difficult to figure out what is going on behind the scenes. You have to go hunting for data that is usually publicly available, but it is not kind of digested or regurgitated in a way that's useful. You have to look at something called the common data set and do a search for section H-2A and there you will figure out, you will see what percentage of people who have no demonstrated financial need, still get scholarships anyway and in what amounts. With merit aid, it's more likely to be a kind of haggling where you go to the admissions office and say, "Look, you're my first choice, but this school that you compete with down the road that I would actually really rather not go to has offered me $6,000 more per year. Can you help me out please? Did I make a mistake in my application to you that maybe may have made you value me less than your competitor."

Tip #2

You can appeal the financial aid package you receive from these colleges. The need-based financial aid packages come from the financial aid office. You may need to make different sorts of arguments because with the need-based crew, you generally need to prove that your financial circumstances have changed since you originally applied for financial aid. That's going to give you the best chance of success.

Tip #3

Save the “right” way. There's this idea out there that you need to make a choice between saving for your retirement and saving for college for your kids. You can do both. Borrowing for college may not be for some families. This idea also implies that you can't borrow for retirement, which is not true. You can borrow for retirement using reverse mortgage if you have equity in your home. Then there's this other one that's more directly college-related, which is that if you save money for college, you will be penalized for that come financial aid time. The financial aid formulas have much more to do with your income than they do with your assets. It is true that your assets will be tapped. And some people think that that means that they will be taxed. But, I would argue if you've got assets, it's only fair that you should have to use them before the school uses its own resources to support you. I have never run into a family that regrets having saved for college. And I know personally that when that 529 statement comes every quarter, opening it up, makes me feel great about myself. It makes me feel great that whatever other failings I may have as a parent or as a human being this I am doing right for my kids.

Tip #4

You can control the way that you frame a college and where you present the choices to your children. We do not have to cede decision-making authority on college to our children. It is not the case that just because they work hard, they should be able to go wherever they want. You don't get, make that kind of choice all by yourself when you're 17 years old. So, we do have some control there and we have some control over how, and when we introduce these concepts to them, because to me, it's only fair that a rising ninth grader ought to know what their parent or parents ability to pay for college might be. What their willingness to pay for college might be too and also, how the system of wheeling and dealing and discounting actually works so that if they so choose, they can position themselves to be in the best possible spot as an applicant.

Tip #5

What we tend to miss as parents is that we are not having emotionally honest conversations with ourselves, our spouses, or even our exes. We're not talking about fear that our kids will go tumbling down the social class ladder if we make the wrong choice or they make the wrong choice. We don't talk about guilt. The guilt that we have, that we didn't save more, or we don't want to spend more, or we're not doing what our parents were able to do for us. We don't have those conversations out loud. And we certainly don't talk about our own elitism and snobbery and how we feel about these institutions. The way we think that an admissions offer might reflect back on us and our family or even about the snobbery and elitism of the institutions that will be in the market for our 22 year-olds when they graduate. And the way in which those elitist institutions might look down on one school as opposed to another.

Full Transcript of Episode:

Bobbi Rebell:

Part of being a financial grownup is making sure you have a plan for how you spend your money and how you pay your bills. And now we have a new tool for that. It is called Splitit. It will take a lot of the stress away from those big purchases and really allow you to plan ahead. Here's how it works.

Bobbi Rebell:

You shop online and when you're ready to pay, you just choose Splitit at the checkout to split your payment on your credit card and pay over time. There's no interest, no application, no fees. It is fast and easy. So if you buy something for $500, you can split it into five smaller payments of $100 a month without any interest or fees, much more manageable and you're in control of your costs. By turning your payments into smaller installments over time with no interest Splitit gives you more spending power.

Bobbi Rebell:

I know I don't like to have to pay interest if I can avoid it. And I also don't want to always be opening new lines of credit, split your payments and live big with the credit cards you already have go to splitit.com today. That's splitit.com. Financial grownup guide, five things you can control about the price you pay for college with author Ron Lieber.

Bobbi Rebell:

You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell author of, 'How To Be a Financial Grownup.' But you know what? Being a grownup is really hard, especially when it comes to money, but it's okay, we're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:

Hello, my friends, for all our talk about budgeting, spending, penny pinching in some cases, looking at the prices of everything we buy. Most of us, our parents, our children, friends, we buy one really big ticket item that we shop for without actually getting to see the real price that we will pay. I am of course, talking about college. And while yes, we can see the full retail price on many university's websites, the majority of us actually, aren't going to pay that price.

Bobbi Rebell:

In fact, I learned in Ron Lieber's new book, "The Price You Pay for College" that only 11% pay that price. So then the question is how much of a discount can we get, and how is that decided? Welcome everyone here on the Financial Grownup podcast, we talk about money issues that matter to us as we move through adulthood and college certainly qualifies.

Bobbi Rebell:

Ron Lieber, the New York Times Your Money Columnist, who was first on the podcast in 2018, talking about how he got into school is now back to give us a peek at his very grownup book, "The Price You Pay for College," an entirely new roadmap for the biggest financial decision your family will ever make. Yeah, that's the truth. Like so much of our lives these days, there are lot of things that we can't control. So I asked Ron to tell us what we can control, and he did a little myth-busting along the way. Here is Ron Lieber.

Bobbi Rebell:

Ron Lieber welcome back to the podcast and congratulations on your new book, "The Price You Pay for College."

Ron Lieber:
It's great to be back. Thank you for having me.

Bobbi Rebell:

What inspired this book before we get into your tips about the things that we can control about the price that we all pay for college?

Ron Lieber:

Well, this book is both personal and professional. It's personal because, I have a 15 year-old ninth grader and a five-year-old kindergartener. I live in New York city with extremely high costs and it's a two journalist household. So we're not exactly rolling at it. So this is going to be hard for our daughters to have the same kinds of choices that my wife and I had albeit for me with a whole bunch of need-based financial aid.

Ron Lieber:

So it's personal, but it's also professional because readers kept getting in touch and expressing marvel, but also alarm at the fact that the rack rate for the most expensive colleges in the country had passed $300,000 for four years and even the flagship state universities.

Ron Lieber:

Many of them are now more than a hundred grand for four years. So you've got a $200,000 gap between them and these readers were saying to me, "Hey, we live in the era of big data, where's the big dataset that explains why NYU is $200,000 better than SUNY Binghamton." I did not know and it felt like a new question to me.

Bobbi Rebell:

Well you answer a lot of the questions in the book? And unfortunately there is a lot about this process that we simply cannot control, but I want to focus for our grownup audience on the things that we can control. And we've got a list of a few things we're going to go through. What is the first one? What can we control when it comes to the price we pay for college?

Ron Lieber:

Well, you can control what you know, right? You can learn how the system works. One of the things that continues to amaze me is the number of sophisticated people who are extremely successful in their own chosen fields of employment who show up in my inbox or in my text messages in March or April of their child's senior year in high school.

Ron Lieber:

And they have no idea what has hit them. They have no idea that there is now a whole separate parallel track of the financial aid system called merit aid. And that rich people can take advantage of it just as much as low income people can.

Bobbi Rebell:

And that's kind of one of the reasons why college has gotten so expensive in fact, is that it's become the sort of vicious cycle.

Ron Lieber:

One of the things that's made it also complicated for the people who run these schools, it's not just the pricing wars going on in the background, although that certainly helps drive down revenue and the net tuition revenue per student. But one of the things that we can't control as individuals and the schools have a lot of trouble controlling, is that people good ones, well trained people cost money, right?

Ron Lieber:

Professors spend, a minimum of five years in graduate training and Economics 101 suggests that, people who need to spend that long learning and training ought to be compensated at an above average rate. There are also more administrators than there used to be for every 1000 undergraduates. But that's mostly because we like it that way, right?

Ron Lieber:

We want disabled kids to have access. We want kids with mental health issues to have access. We want there to be a good counseling center on all of that. So, we get the administrators, we demand in the marketplace. But it is not cheap to run these places and if we made them more efficient, we might not like the result.

Bobbi Rebell:

So for parents that want merit aid, how can we control merit aid and how much we can get for our child or for kids going to college, if you're a teenager listening to this?

Ron Lieber:

Well, the first thing you have to be able to figure out is whether a school offers it at all and in what volume and for the more selective schools that do offer merit aid, it is often quite difficult to figure out what is going on behind the scenes.

Ron Lieber:

I think of schools like, Oberlin or Connecticut College, relatively Tony Brand’s private schools. A lot of fancy kids go there. They don't really want to talk about this. They're ashamed that they've got to, get in there and slug it out in the marketplace.

Ron Lieber:

And so you have to go hunting for data that is usually publicly available, but it is not kind of digested or regurgitated in a way that's useful. You have to look at something called the common data set and do a search for section H-2A and there you will figure out, you will see what percentage of people who have no demonstrated financial need, still get scholarships anyway and in what amounts.

Bobbi Rebell:

Another thing I was shocked about that you talk about in your book that people can control is if they do get a financial aid package, they can appeal it.

Ron Lieber:

It's true. There are a lot of people who don't know that this is the case as well. And it gets a little messy, right? Because the need-based financial aid packages come from the financial aid office. But the merit aid awards come from admissions. So depending on which awards you have, you may need to file your appeal to different people.

Ron Lieber:

And then when you do, you may need to make different sorts of arguments because with the need- based crew, you generally need to prove that your financial circumstances have changed since you originally applied for financial aid.

Ron Lieber:

That's going to give you the best chance of success. With merit aid, it's more likely to be a kind of haggling where you go to the admissions office and say, "Look, you're my first choice, but this school that you compete with down the road that I would actually really rather not go to has offered me $6,000 more per year. Can you help me out please? Did I make a mistake in my application to you that maybe may have made you value me less than your competitor."

Bobbi Rebell:

Let's get into other things that people can control. There's a lot of myths about how to save, where to save and how much to save to get the best opportunity in terms of support from the college. What should people be doing? What can they control there?

Ron Lieber:

Well, let's go through a couple of the maxims here that are repeated as truths in financial planning and in personal finance, journalism, by people who ought to know better that are not actually true. First of all, there's this idea out there that if you need to make a choice between saving for retirement and saving for college, you should save for retirement because you can't borrow for retirement. That implies a couple of things.

Ron Lieber:

First of all, that borrowing for college is necessarily and always a good idea, and it may not be for some families. But it also implies that you can't borrow for retirement, which is not true. You can borrow for retirement using reverse mortgage if you have equity in your home.

Ron Lieber:

So, I hate things that are presented as maxims. They're actually based in factual inaccuracies. Then there's this other one that's more directly college-related, which is that if you save money for college, you will be penalized for that come financial aid time.

Ron Lieber:

So there's a whole bunch of problems with this. I mean, first of all, the financial aid formulas have much more to do with your income than they do with your assets. It is true that your assets will be tapped. And some people think that that means that they will be taxed. But, I would argue if you've got assets, it's only fair that you should have to use them before the school uses its own resources to support you. And let me also say this, right?

Ron Lieber:

I have never run into a family that regrets having saved for college. And I know personally that when that 529 statement comes every quarter, opening it up, makes me feel great about myself. It makes me feel great that whatever other failings I may have as a parent or as a human being this I am doing right for my kids.

Bobbi Rebell:

And speaking of your kids, that's also something you can control. You can control the way that you frame a college and where you present the choices to your children.

Ron Lieber:

It's true. Look, I mean, we do not have to cede decision-making authority on college to our children. It is not the case that just because they work hard, they should be able to go wherever they want. That's not how it works when this thing that they are chasing costs today, as much as $325,000 for University of Chicago at the rack rate, right? You don't get to make that kind of choice all by yourself when you're 17 years old.

Ron Lieber:

So, we do have some control there and we have some control over how, and when we introduce these concepts to them, because to me, it's only fair that a rising ninth grader ought to know what their parent or parents ability to pay for college might be. What their willingness to pay for college might be too and also, how the system of wheeling and dealing and discounting actually works so that if they so choose, they can position themselves to be in the best possible spot as an applicant.

Bobbi Rebell:

And the final thing I want to talk about is our own emotions. There's the cliche, "Keeping up with the Joneses" and everyone says, "Oh, I just want what's best for my child." But people get pretty emotional. This for many parents, it's a reflection on, it's almost like, did they get an A+ in parenting, depending on where their child goes to school. They want that sticker on the car, right?

Ron Lieber:

I am so glad you bring this up. Obviously the students have a tendency to be emotional. They're getting ready to leave home, they feel like it's competitive. They want to be able to hold their head up in the community. They want what they want and that's normal for adolescents.

Ron Lieber:

But what we tend to miss as parents is that we are not having emotionally honest conversations with ourselves, with our spouses if we have one, with our exes, if we have some of those about the feelings that all of this invokes and evokes, right? We're not talking about fear that our kids will go tumbling down the social class ladder if we make the wrong choice or they make the wrong choice. We don't talk about guilt, right? The guilt that we have, that we didn't save more, or we don't want to spend more, or we're not doing what our parents were able to do for us.

Ron Lieber:

And so therefore we should borrow $150,000 per kid, right? We don't have those conversations out loud. And we certainly don't talk about our own elitism and snobbery and how we feel about these institutions. The way we think that an admissions offer might reflect back on us and our family or even about the snobbery and elitism of the institutions that will be in the market for our 22 year-olds when they graduate. And the way in which those elitist institutions might look down on one school as opposed to another.

Bobbi Rebell:

Very interesting. And it's true in schools, one of the myths that you dispel in the book is that schools, they have all these things you joke about the lazy river and the rock climbing wall. I mean, that is something that is eye candy for students. That's not the reason that schools are so expensive by the way.

Ron Lieber:

No, I mean, these are really fun things to go gawk at and talk about and old school types will snicker and think that everything's gone to rot. But I don't blame the schools for this. I mean, these 18 year olds want to continue to live in the manner to which they become accustomed.

Ron Lieber:

And all of a sudden in a generation we've gone from, having a VCR in your room and a private phone line, and your own camcorder, being a luxury to everybody walking around with this little rectangle that like does all of those things and then some, right?

Ron Lieber:

We just have a way higher standard of living that we used to. And so it doesn't surprise me that a bunch of institutions would want to raise the quality of the lived experience for their undergraduates. I would argue that this is market driven. It's not driven by the institutions and it doesn't actually cost a ton. Again, it's the people who cost money at the schools, not the amenities.

Bobbi Rebell:

Right. And that's a big, big myth that you bust in the book. I loved your book. I hope lots of people pick it up because it is eye-opening about so many things that I thought were true that are not true like that last example. Ron, where can people be in touch with you?

Ron Lieber:

Yeah, I am itching to get back out on the road again, but it's probably not going to happen until November at the earliest. So I will be all over the internet. The best way to catch up with me is to sign up for my newsletter, which I promise I don't send out all that often. But if you go to ronlieber.com and just drop your first name and your email address in there, you can keep up with me and I will continue to send notes and notices about where I will be appearing via zoom. And I'm on all the usual social channels @RonLieber.

Bobbi Rebell:
So wonderful. Thank you so much.

Ron Lieber:
Thank you for having me.

Bobbi Rebell:

Okay my friends. I was pretty surprised about how little at a relative basis, all those luxuries amenities costs, but I guess overall, it is a good thing that the money is going in large part to educators. Right? I would love to hear about your experiences with paying for college. You can DM me at @BobbiRebell1 on Instagram, @BobbiRebell on Twitter, and please join the grownup list.

Bobbi Rebell:

We share recommendations of books, podcasts, and other fun things to level up your grownup life, plus we are doing giveaways of books from the authors on the show and exclusive financial grownup merchandise. Just go to my website, Bobbirebell.com to sign up. Big thanks to, "The Price You Pay for College" author, Ron Lieber for helping us all be financial grownups. Financial grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.

Entrepreneur Kristy Gayton shares the money lessons she learned from her parents and how she found the middle ground in their very different mindsets. Plus how to get organized for 2021.

Kristy’s Money Story:

So, my money story is, you know, I was raised with not a lot of money. My parents were entrepreneurs. And when I say entrepreneurs, they weren't like what we think of entrepreneurs now. Like, “Oh, entrepreneur, it's so cool.” Like, one clean houses and one was a stone mason. My parents always worked and provided with whatever I needed, but I always felt super different. I would be dropped off to school in a ton truck. And I would literally scrape the rubble off my pants being like, “Is someone going to smell this concrete of my dad dropping me off?” And, “Dad, can you drop me off back there?”.

My parents' dynamic with money was very different. Even to this day, my dad, if you talk to him, you would think he has nothing. He drives cars until they are driven into the ground. He like, “Are you going to eat all that food?” When you go to dinner. Or makes different comments. And then my mom is this giver. My mom didn't have much growing up either, so I think my mom overcompensated, always wanted to make sure we felt like we had or have those right jeans, or we did fit in. So, it was two conflicting messages. And when I say my parents didn't teach me about money, they didn't. They never sat me down and said, “This is how you do it. This is what you do. This is how you get a credit card. This is how you budget. This is how... ” But they did teach me about money. They taught me a lot of lessons and I actually started “working” working. I've always been a hustler or a grinder.

I've started helping my mom at age six. Like, emptying trash cans and putting vacuum lines, like those perfect little vacuum lines in people's office complexes. And so that kind of carried with me to different areas of my life. And I've always kind of been an old soul and really falling into numbers. So yeah, it's just a huge passion of mine. And I'm thankful for all the lessons. And I always joke and I joke with my little brothers. So, there's four of us. I have an older brother and myself, and then we have two younger brothers. And I always joke, we were raised very differently and we were.

My dad, like I said, he was a stone mason and a point in his career, he made a switch and he literally laid the stone. Like, his laborious work. At a point in his career, he was like, “I'm going to have a stone yard and I'm going to start having laborers and different people that do this and crews.” He made a switch from being an owner to an operator. I'm sorry, from operator to an owner. I'm sorry. Instead of working just in his business, letting that business work for him. He still grinds and he still works so much. And I see them and I'm thankful for their lessons, and I also still see a big aspect that I'm like, “I don't want to be that. I need to switch.” I've been making switches in my own business as well of making that switch, because I want the freedom that something doesn't rule me or own me, that I'm doing what I love passionately, but it's not controlling me, if that makes sense.

Kristy’s Money Lesson:

A takeaway is you need to be authentic and honest with yourself. What are your priorities and what do you want? What decisions are you making based on other people? Whether it be close family members, whether it be social media, whether it be the neighborhood, the environment, whatever circumstances. Are there decisions that you're financially making that are for other people and how they make you feel significant? Or is it authentically something you're getting that makes you happy and experience or whatever? So, I think that's a huge lesson.

Kristy’s Money Tip:

So, I'm big on visuals. Part of our Start planner, it starts with goals and a vision board, 90-day strategies. I'm big on us visually seeing that. I think that that helps us. It helps us remember things. So, one thing that I do with my money is I actually visualize my money. So, I create different buckets. So, I have a main checking account and then I create savings accounts. And each of those savings account are for different things. So, if I'm wanting to renovate my kitchen. I have one for vacations. I have a savings account for just legit rainy day savings account. I have one for my taxes. They're not escrowed into my main house. So, I have one for my taxes.

Basically, what I do is I set up auto draws to those things. So, they're set up as bills. And when I log into my account or when I see these different things, they're visualized for what they are. So, if it's for a vacation, I can visually see that money going out and getting that attainment. So, I think that those life lessons that I learned at a young age of getting that car, buying that house, and setting those visual things, I think it helps people. Like, as we're feeling like we're not making progress, even if it's just creating a savings account, I'm going to pay off this debt, if it's a credit card that you have. And you pick that highest credit card that you have, and let's pay it off. Even if it's visually seeing that money and just paying it down, I think that there's so much to be said for visualizing and creating buckets with our money so that we feel the progress and we see the progress. Because I think that ultimately as humans, I know for me, and I think this is really relative for everybody, we thrive when we see progress. So, creating these visualizations helps us to see that progress.

Bobbi’s Financial Grownup Tips:

Financial Grownup Tip #1:

Kristy talks about how you can't just hustle and you can't just grind, make sure you take a break during these holidays. 

Financial Grownup Tip #2:

Becoming a financial grownup doesn't just happen. It's a journey, and you can tell that from the way that Kristy shares her own evolution as she grew up and experience life. We're all going to have seasons of our life when we feel like we are making progress, and then times when we feel like we are, well, taking a step back. 

Episode Links:

• Kristy’s website - https://startwithkristy.com

• Start Planner website - https://startplanner.com

Follow Kristy!

• Instagram - @startplanner

• Facebook - @startplanner

• Pinterest - @startplanner

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.