Left Brain and Right Brain Financial Needs

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Not long ago, I was talking about retirement planning with a friend of mine who was trying to decide what exactly to do to prepare for retirement – he’s 25, but has gotten the memo that he needs to plan now. I ran through a few options, but almost immediately his eyes glazed over – he was bored out of his skull pretty quickly at the first mention of the word Roth.

So I was blunt. “Do you want me to just tell you what to do?” He nodded his head happily. After that, I just asked him a few really simple questions: Do you want to work forever at something or do you want a true retirement? How much do you bring home each paycheck? How much lower could that paycheck be before it would bother your way of life? Do you have any documentation about your retirement plan at work? He answered these and seemed much happier to be talking about things that weren’t complicated plans and confusing numbers.

With that input, I basically described a few scenarios to him. Did he want to work at least part time in retirement doing something he enjoyed? Did he want a full retirement, but not with much free money to spend? Did he want a full retirement with plenty of financial freedom? I ran some numbers and built a simple plan for him – a Roth IRA and a well-funded 401(k).

For him, this was relief. He didn’t want to think about the numbers or the specific plans, not at all. He was interested in retirement, but in a much more conceptual way – he preferred to imagine his own day-to-day life at that stage, which he could envision in detail. He just didn’t have any interest – and perhaps a bit of fear, too – when it came to the actual planning part.

I’m just the opposite. I like running the numbers. I like to imagine my retirement, too, but when I dream about it, it’s very nebulous – I can easily imagine scenarios, but they seem like fiction to me. Instead, the pleasure for me is in the planning.

The difference is in our minds. Most people are familiar with the idea of “left brain” or “right brain” thinking. People who think primarily with their left brains are more logical, focus more on patterns and order, tend to be practical, and like to form strategies – big dreams are frivolous. People who are right brain thinkers tend to do much better with reading people, tend to brainstorm well, and tend to lead with their imagination – plans are boring.

For most of us, the truth is somewhere in the middle, but most people will identify at least somewhat strongly with one side or another. What does that really mean, though?

People with left brain dominance are usually good at devising plans and at running the numbers, but aren’t so good at imagining the big goals. They can figure down to the penny which retirement plan is the best one for them, but they don’t necessarily envision what exactly retirement is.

People with right brain dominance tend to be just the opposite. They can imagine their retirement quite well, but the path to get there is blurry. For them, retirement planning and investment choices are boring.

Good financial writing finds a way to inspire both groups. Some personal finance writing focuses on big-picture issues: setting goals, figuring out your dreams, and considering alternative scenarios. Other writing focuses in on those nut-and-bolt issues, calculating things down to the last penny.

When you read The Simple Dollar – or any other personal finance site – you’ll find things that are boring to you and things that excite and intrigue you. Consider, for a moment, that the very things that bore you are the very things that other readers are thriving on. I find it fascinating to think that the things that bore me are the same things that excite other people.

What else can we take away from this?

It’s powerful to talk about personal finance with other people. Money is often a topic that’s uncomfortable to discuss with others and so we avoid it, but talking about personal finance with people who think differently than we do can often open up doors for all of us. Talk about your money issues with your friends, particularly if they often think differently than you do. A different perspective might be just what you need.

Financial planners do a great job of serving those with right brain dominance. Financial planning works best when you have a goal already in mind – the planning is what needs to be done to reach that goal, and that’s often the part that right brain folks have a hard time with.

Left brain dominant folks need inspiration above all else. They need to be presented with a grand vision and once they begin to believe in it, they’ll find the road to get there.

Left brain and right brain folks sometimes function better on different paths to the same goal. Analytical types will often be happiest with the most efficient path. Others may find that the best path for them isn’t necessarily an optimal path at all, but instead a path that fits best with other choices and aspects of their life. Debt repayment is a great example – Dave Ramsey’s debt snowball (where you start off repaying the debt with the lowest balance instead of the one with the highest interest rate) isn’t necessarily the most optimal, but it succeeds in ways that aren’t directly analytical, but more psychological and empathic in nature.

In short, we all think differently – and when we stop being hindered by those differences and instead use them for our benefit, we all succeed.

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28 thoughts on “Left Brain and Right Brain Financial Needs

  1. You mentioned Ramsey in the last paragraph – he sums up the difference in “right brain” and “left brain” thinkers as the “nerds” and the “free spirits.” I am a nerd. I like spreadsheets, creating and monitoring the budget, etc. My wife is a free spirit. For her, as long as there is money in checking and the debit card works, no worries. Of course, we compliment each other well, which makes for a great relationship. In moments of financial friction I try to remind myself she is thinking of the situation from a different perspective.

  2. Intersting article. What happens if you are bit of both. I am both a spreadsheet junkie, but also someone that needs that free spirit inspiration to be able to keep up.

  3. My wife is totally the free spirit. I am a bit of a combination. I am a spreadsheet junkie, yet without that free spirit enotional drive, it can be very hard for me to keep that motivation.

  4. I think left brain and right brain people can help each other out quite a bit – left brain folks often thrive when a right brainer gives some inspiration, and right brainers often thrive when a left brain person develops a plan for them.

  5. I think interesting results occur when a left-brain is married to a right-brain! When we talk about retirement, hubby likes to talk about the type of home he will have, the part-time business he will run (of course, I’ll be the one crunching the numbers), etc.

    What you described is me and hubby to a T!!

    When I think about retirement, I put together a spreadsheet, calculate what I’ll need based on inflation and those goals he talks about, and figure out to the dollar amount. We have a Roth and a 401(k). When I try to talk to him about this, he curtly cuts off the conversation because “this is boring”. But he can hold a conversation about what he will do with the money for a long time! He doesn’t have any idea how much we have saved for retirement, but is ecstatic that I make sure we have enough for all his goals.

    I think it is good to have a balance like this. I really enjoy crunching the numbers, and he really enjoys dreaming. I always felt a little bad about this – shouldn’t he take more of a role in the planning process? – but this blog entry makes me feel better about it.

  6. Well, he’s got a start. You can’t plan a retirement without knowing (or at least making some detailed assumptions you can look back on) how you’ll be spending your time – otherwise how do you know what your target is or how you are progressing, you’re just accumulating money. There is a really excellent Canadian book about retirement called “Why Swim With The Sharks” which is very good at tying the lifestyle and the calculations together.

  7. I’m a writer and a right brain thinker–at least when it comes to money. For whatever reason, numbers that represent money make me freeze in terror. Taxes, retirement planning, investment–it’s all overwhelming. (Not to mention what happened when I bought a house and spent a week trying not to have panic attacks over the fact that I had just borrowed more money than I’d ever seen in my life.)

    I’m currently struggling with trying to get a mix of investment types in my 401(k). I’ve looked at the Web site of my investment firm about three times now, and have yet to make any headway. There’s a lot of information, and none of it makes *sense*.

    This is why I’m going to sign up with a financial advisor. I just need someone to listen to my goals and tell me what to do. I’ve finally gotten to the point where I can manage my day-to-day finances pretty well. It’s just the investment stuff that I have issues with.

  8. The right brain gives us the “why” for saving for your future and the left brain gives us the “how.” Both are critical for success.

  9. I’m the nerd in my household. My spouse hates talking finances, and appreciates that I take care of it. On the other hand, I like being cajoled out of nerdsville now and then.

  10. Gah. This “left-brain” and “right-brain” parlance is such a caricature of the real science. The only function that has been consistently and strongly localized to one hemisphere of the brain is fluent language, which is in the left hemisphere. (And that’s only true for right-handed people. Most left-handed people also have language localized to the left hemisphere, but some don’t, and some have language abilities that are more broadly distributed.) The stuff that most people call “left brain” and “right brain” is mostly based on anecdote, hand-waving, and gross over-generalization. I don’t doubt that different people have different cognitive strengths, that effective teachers should appeal to learner’s strengths, and that people who are weak in one area can learn from people who are strong in another. But arbitrary binary divisions based on bad pop neuroscience is a bad way to get those ideas across.

  11. @guinness416: He’s 25, so even if he comes up with specific figures and goals, they’re likely to change as his life and the world changes. The most important thing is that he starts “accumulating money.”

  12. @!wanda: I think at this point that most people realize that the terms don’t literally refer to brain hemispheres.

  13. I find it absolutely amazing that someone 25 or 30 can honestly answer a question regarding what he wants to be doing when he’s 50 or 60 or 70. I’m 44 and couldn’t have imagined at 25 what I’d be doing now…and even now I have no idea what I want to be doing when I’m 65. I applaud (but am somewhat skeptical about) anyone who thinks they can see that far into his future.

    Ahh…youth!

  14. @DB

    He said he wants to be either a fireman, doctor, or an astronaut :-)

    I agree. For a lot of folks in their 20s the answer lies beyond their reach and is likely influenced, no matter how intelligent they are, by their experiences along the way.

    That said, I think people see even short-term goals (a series of steps or just backing themselves into the big picture) differently than others and will approach them in diverse ways.

  15. @Trent: I don’t think that “left-brain” and “right-brain” have turned into metaphors yet. People are still trying to sell educational strategies, etc. claiming that “left brain” and “right brain” differences are real, immutable, binary, and biologically-based. Even if they are just metaphors, they are troubling ones. Implying that biology dictates that people are strong in either the analytic or the creative domain (but not both) is very problematic.

    Besides, the people who use this type of language use it because it sounds “science-y.” People react differently and often more positively and credulously to “science-y” terms than to common ones. You know that, and that’s why you used “left-brain” and “right-brain” in your post. That’s not a problem when discussing verified science, but it’s a problem when discussing pseudoscience.

  16. @Trent Perhaps I feel that you did this guy a little bit of a disservice. On the one hand you helped him out by giving them concrete suggestions of what he needs to do … now. Giving the man a fish if you will.

    On the other hand, his reaction is fairly indicative of the type of laziness I am used to interacting with in my peer group (I am roughly this guy’s age). I feel You didn’t empower him. I feel you enabled him.

    Perhaps a better solution would have been to tell him that HE should really start learning to figure this stuff out himself. Maybe assisted in giving him some light reading or whatever.

    Maybe some introspection on the light reading or discussing basic investing advice might be helpful to share. I find I know more about investing than some of my (older) co workers.

    @DB I am 24 now (soon to be 25), and have a basic visualized Idea of what I wish to be doing during my retirement. It involves consulting part time writing stories and enough land for 2 – 3 dogs to be comfortable in.

  17. @Carrie
    That pretty much rounds it up!

    @guinness416 and !wanda
    I can see the right brainer and the left brainer at work in you both! Like Carrie said, Some people need to see where they are going before they start putting energy into getting there, whereas some need to know how to get, they don’t know where yet.

    @DB
    Ahhhhh… right brainers!

    I can really identify with the left brain personnality. Don’t know yet exactly where I’m going, but I’m getting ready for anything!

  18. I don’t know if that’s so much left and right brain as it is just a matter of finding finance incredibly boring. Unless you’re saying that people who think finance is boring are right brained.

    There are some areas in life where I like to run concrete numbers and have a concrete plan. I can do this with budgeting, etc. However, investments just make me glaze over.

    I know I tend to want to rebel with my money. I felt pressured when I opened my IRA, and I made bad choices. Read here:
    http://sally-unraveled.livejournal.com/76576.html

    Fortunately, our company switched to 401Ks less than 6 months later. The 401K rep explained things in plan English and didn’t pressure me. I signed up for the program where they manage it for you with moderate growth.

  19. “The stuff that most people call “left brain” and “right brain” is mostly based on anecdote, hand-waving, and gross over-generalization. I don’t doubt that different people have different cognitive strengths, that effective teachers should appeal to learner’s strengths, and that people who are weak in one area can learn from people who are strong in another.”

    I agree with Wanda and Brian in comment #21 a lot of this left/brain stuff is just people rationalizing their own short comings.

    Most people are a blend of right and left brain behavior, there are not many “free spirits” and even less natural nerds, most people have these sides of themselves nurtured over a life time, but we’re all capable of adjusting a bit to take the burden off of others.

    I find a lot of the numbers, spreadsheets and such just as boring as the next guy, but in order to make cool things happen as an engineer I had to get on the stick and learn how,so it is possible to do both.

    The 25 year in the article just sounded lazy and some teacher in a beret in art class told him that it was okay to avoid challenging things because he was so “free”. But retirement is a part of life and planning for it is part of being an adult.

    I hope to never be “balanced out” by someone who thinks that their whole purpose in life is to chase rainbows and for me to figure out a way to get us there.

    “Here’s the plan, I go outside an play while you pay the bills.” no thanks.

  20. @Brian – I am 24 now (soon to be 25), and have a basic visualized Idea of what I wish to be doing during my retirement. It involves consulting part time writing stories and enough land for 2 – 3 dogs to be comfortable in.

    I should have worded it differently – many people your age may *think* they know what they want to be doing, or indeed may be absolutely sure of it, but in reality what your life will be like 30 or 40 years down the road – or even just 10, for that matter – is likely be far different from what you now envision. Which is fine, of course – who’d want to know exactly how everything will turn out? The mystery of it all, and the journey getting there, is what it’s all about. Again, though, like I said, I do applaud you for having a vision and using that to motivate yourself.

    As Langston Hughes said:

    Hold fast to dreams
    For if dreams die
    Life is a broken-winged bird
    That cannot fly.

    Hold fast to dreams
    For when dreams go
    Life is a barren field
    Frozen with snow.

  21. I am a right brainer that went into a left brain academic and professional career because I thought it would be challenging. 12 years into the professional part now, and I enjoy it still, but I find myself dreaming about a second career in a left brained field.

  22. The new book “Nudge” talks about this phenomenon as being not so much caused by people being left or right brained, but because humans are not perfect economists. Basically the authors state that with better “choice architecture”, better decisions can be made.

  23. Hey,

    Just thought I’d let you know this gave me a laugh and found it interesting.

    I’d be a left-brainer. I think I handled financial matters fine while I was single. Not brilliantly–I had no long term savings, etc–but I was able to marry debt-free. So I was quite happy to hand all things financial and numbery to my husband, an engineer who likes doing analyses.

    I tend to come here every few days and skim through things, getting the gist, and reading what I find interesting. I like the principles, but generally can’t bear the details. When I point something out to my husband, I notice he gets sidetracked and moves on to the the articles I tend to skim over faster, and I go find something else to do besides looking over his shoulder.

    I think you do a pretty good job of writing to both types.

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