The title of John Lanchester’s new book surprised me. How to Speak Money, well yes, I was expecting that, even excited to learn how to do that very thing, but then the subtitle: What the Money People Say—And What It Really Means.
The money people I know don’t actually say very much about money. One of the great privileges of wealth is never having to think about money, much less talk about it. You get to talk about Europe or Asia, not whether you can afford to take a vacation; you get to debate Chinese or Italian cuisine, not the price of food. It’s the middle-class and working-class people I know who can’t stop talking about money: how much they need for gas or groceries, how many days until they get another pay check, how many payments until they’ve paid off some loan or credit card. The less money you have, the more you have to talk about it.
The less money you have, the more you have to talk about it.
But Lanchester’s book isn’t about the straightforward language of dollars and cents or credit and debit, the kind of money the poor talk about; Lanchester’s book is about economic jargon and financial doublespeak.
“There’s a huge gap between the people who understand money and economics and the rest of us,” Lanchester writes in his preface. “Some of the gap was created deliberately, with the use of secrecy and obfuscation; but more of it, I think, is to do with the fact that it was just easier that way, easier for both sides."
I think Lanchester’s being generous. The greatest con of the last century took place on Wall Street, but it was made possible by the mis-education of Main Street. It’s no coincidence that inequality has grown as financial literacy has fallen. This year’s Consumer Financial Literacy Survey by the National Foundation for Credit Counseling (NFCC) found that only 39 percent of those adults said they keep a budget or monitor their spending, while 60 percent said they had not reviewed their credit score in the last year. Seventy-three percent of those surveyed indicated they could benefit from financial advice from a professional.
Enter Lanchester with How to Speak Money, the first section of which (“The Language of Money”) makes the case for financial literacy, while the second section (“A Lexicon of Money”) offers a crash course. Unfamiliar concepts like the Eddie Murphy rule, Glass-Steagall, and the Volcker rule get clear, concise definitions while familiar words appear with unexpectedly candid meanings: downsize (“a term that means sacking people”), haircut (“people who have lent money to a company or government—the bondholders—aren’t going to get all their money bank”), and insurance (“a great idea—but it is distressing how often, in its real-life manifestations, it turns out to be a scam dependent on the customer’s not having read the small print”).
How to Speak Money is pitched to beginners, but if this is the beginning, I wonder if the rest of us stand a chance. Lanchester writes that his father worked for a bank, approving business loans. My own experience with the financial sector is a little more removed: My father cleaned a small bank branch. Lanchester remembers driving around and having his father point to factories and businesses whose starter loans he had approved, but I remember picking up cigarette butts in the bank’s parking lot and paper clips from behind the teller’s cage.
Most of the people I know who want to know more about money want to know how to choose a credit card or complete their FAFSA; they’re trying to figure out if they can afford health insurance and how to choose a plan; they can’t afford an accountant but don’t know how to file their own taxes. Personal finance is more pressing for most of us than the global economy. Yet, Lanchester makes a compelling case for why we can’t have one without the other. When he writes about the gap in finance, he explains: “It’s a gap we need to close—both at the macro level, in order for us to make informed democratic decisions; and at the micro level, in terms of the choices we make in our own lives.”
That gap in financial literacy is very profitable for those in financial services, banking, credit card companies, insurance companies, and consumer finance groups who profit off our ignorance, but Lanchester suggests it’s bridgeable. How to Speak Money is a fine start. Reading the book won’t make you rich, but you’ll at least know what the rich are talking about.