Personal finance is…personal.

I’ve talked before about how blogging is helped me. But what I haven’t talked about is how reading other blogs helps me too.

My favorite part about reading other financial blogs is learning people’s stories. Everyone has an interesting story and a different one. I don’t always relate to everyone’s story, but that doesn’t mean that their story isn’t interesting.

Everyone makes decisions for different reasons.

Finances are different while you are a student than while you are paying down student loans than while you are not.

Finances in different countries use different acronyms and names.

Finances are different when you are married versus when you are single versus when you have kid(s).

Finances are different when you make a higher income in that you have more money to splurge, to save, and to invest.

Finances are different in different cities with different levels of cost of living.

But the philosophies are the same in most of these situations:

  1. Spend less than you earn.
  2. Grow your career.
  3. Bank your raises.
  4. Spend money on what you value and scrimp in all other areas.

In a lot of cases, there isn’t a single “right” decision – there are just many good ones. Thank you to all of the personal finance bloggers out there who have helped me realize that.

The next time someone tells you they’re not investing in their 401(k), don’t chastise them. Instead, you could show them the math of why getting the match at least is a good idea. Or the fact that they can’t get that much tax-deferred room anywhere else. Maybe they don’t plan to retire in the US, so they don’t want to lock up too much of their money. Maybe they are paying down student loans aggressively. You don’t know their situation.

The next time someone tells you that they don’t want to buy a place right now because they don’t really know where they want to live long-term, don’t tell them that interest rates are super awesome right now and that prices are low. Maybe they have enough saved up that the interest rates don’t matter to them. Maybe they’re waiting for life reasons, not financial reasons.

And some times, a decision that looks like it’s financial based isn’t always. My lunch decisions, for example, are about eating reasonable (to me) quantities of food, not about price. It just so happens that the places with larger portions are more expensive than the places with smaller portions.

Readers, what personal finance decisions do you find people ask you questions about all the time? How do you steer them away?

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15 thoughts on “Personal finance is…personal.

  1. A lot of Americans aren’t buying homes. Five years ago this would have been prudent; now it’s foolhardy. There’s the minority of people, to whom you alluded, shouldn’t buy. The majority should. In the US you can get a 30-year mortgage at less than 40%, and a large, beautiful home in most States at a massive discount. Now is the time to buy if you’re American; it just doesn’t get better than this. In Canada, on the otherhand, it’s a slow-mo disaster (as fools rush in).

    • Sure, from a financial perspective, it might make sense for a lot of people. But buying a home isn’t just a financial decision – it is also a life decision. There are still some cities where it makes more financial sense to rent than to buy. What if you don’t plan on staying in your current city for the next 5 years or so? I hate it when people say outright that you absolutely should buy, without considering your unique situation.

  2. I think the PF decision people ask us most about is saving money for retirement – as in, why are you doing it? So I don’t try to steer them away from that question, but try to probe into why they’ve made a different decision – sometimes it is for reasons that you mentioned like loans, but sometimes they plain haven’t thought about it. This happened just last weekend, actually.

    Thankfully no one asks us why we don’t own a home. We talk pretty freely about our plans to move to CA eventually so people know we’re not in our area long-term enough to buy. (Maybe we were 5 years ago, but back then we didn’t have the money – thank goodness!)

    I think I’m usually the one bringing up money and asking everyone else really invasive questions! It is interesting to get answers that are lifestyle-mixed-with-PF.

    • I find it is way harder to stand your ground on the lifestyle-mixed-with-PF answers though than the strict financial ones. It’s good though when bringing the topic up prompts an interesting debate!

      I think it’s great that you guys are finding some money to put away for retirement now, especially since you might not have access to Roth IRAs once you start working.

  3. I agree, I learn so much from other bloggers.

    I don’t get criticized very often, but when people do comment it’s usually about how I’m not making the right decision by contributing to my investments/savings instead of throwing everything at my student loans, or going on vacations and buying expensive clothes when I’m in debt. I avoid a lot of it by not disclosing the dollar amounts in my spending reports. I’m pretty sure if people saw the numbers instead of just the percentages they’d be a lot harsher with criticism =\

    • I don’t disclose my spending for a reason. I would probably get criticized even if I disclosed my income more closely.

      I think that you’re smart to take advantage of your pension/employer matching even though you have debt because you can’t get that matching money back later. You’ll get there soon enough :)

    • I think when there are multiple good decisions, then yes it is personal. But if you are talking finances and you are choosing a bad decision over a good one, then no that is not personal…it is wrong for just about any individual.
      Your first example is cut and dry, you made a choice between two good financial moves. The second one is a bit murky. I’d say that regularly spending money on expensive clothes while you have student debt would not be wise if (and a big if) you do not have a good emergency fund set in place and/or it puts you into consumer debt. Otherwise I agree, it’s your personal choice.

  4. I still get irritated by people who constantly complain about something and do unnecessary things that will just keep them complaining longer about the same stuff. (ex. complain constantly about their high interest debt and how much they hate their jobs and how they can’t afford anything and then decide to buy a house they put 4% or less down on… and then they need to furnish the house etc.). Yes, it’s personal, but I don’t need to hear about it if they’re just going to make things worse all the time so they can complain more.

  5. I feel lucky that I haven’t gotten sucked into many personal discussions that bothered me! Because I was a financial planner for 16 years, everyone thinks I’m a money guru. Not always the best thing to be at a party when the drunk dude wants 401k advice and won’t leave you alone.

  6. We spend a lot of money on our housing. The HOA fee is pretty high and I would recommend that people avoid it. It makes us happy though so that’s what we are paying for.

    • I’ve been comparing HOA dues on condos that I look at since even when/if you pay off the mortgage, you still have to pay that and it’s only going to go up.

  7. I have a lot of friends that ask me for advice on their finances but typically they are working really hard to get things on track, otherwise I don’t think they would ask. Admittedly, I am a stickler for people contributing to their 401ks.

    While I agree that personal finance is personal, I’m frustrated that there is not a better way for everyone to learn the basics about personal finance. When so many people are living paycheck to paycheck and swimming in debt there must be room for some universal advice.

    However, once people have their finances on track, to each his or her own. Like you, I certainly do not want anyone analyzing my spending.

    • I’ve never not had my finances on track. It was just always common sense to me. So I have a hard time getting it when people don’t. My sibling, for example, always saw my lifestyle as “not fun” and believed in a lifestyle of spending more money. I don’t know where we should educate people better though. Sex ed has become the responsibility of the schools and not the parents, so maybe personal finance should be too?

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