“I don’t know how you write about personal finance every day,” she told me. “That stuff is boring. The last thing on earth I want to think about is insurance. I just get that stuff out of the way as fast as possible.”
I was at the library when this conversation occurred. I was sitting at a table with several personal finance books around me. I know the lady in question, but distantly; we had a few classes together in college a decade and a half ago (was college really that long ago?) and we run into each other every once in a while.
Her comment stuck with me for days.
She did, after all, have a point. When you start digging into the gritty details of personal finance choices, it does get boring fairly quickly unless you’re really into the numbers.
So why care about it? In personal finance, the numbers always have a human side.
I don’t think about life insurance because I’m excited by a spreadsheet of actuarial data. I think about life insurance because I think about the wonderful life my children and wife have and how that would be disrupted if something were to happen to me. I examine the options and try to put them into context of what they mean for our life now and for their lives if something bad were to happen.
I don’t think about budgeting because Excel is a spiritually gratifying experience. I think about budgeting because there are things that I want to have in my life and I understand that I can’t have everything. I look at where I’m spending money and think about where I can cut spending so that I have more to spend in other areas.
I don’t think about Roth IRAs because I’m enthralled by the minutiae of the tax code. I think about Roth IRAs because I want a happy, lovely retirement with Sarah, where the two of us are able to enjoy some wonderful moments together, spend time with any grandchildren we have, and simply spend our golden years together without worry. I look at plans and contribute money to them because I want to maximize my chances at that life with her.
Personal finance can be boring if you just focus on the “finance” part of the phrase. If you choose to look at it that way, it can be about little more than numbers and analysis and sacrifices and laws and minutiae. Some people enjoy that, but an awful lot of people do not. If you look at it with that level of dryness, I don’t like it, either.
For me, personal finance has always come alive when I focus on the “personal” part of the phrase. I don’t look at every decision as a number crunch. I look at it as something that needs to be done to have whatever it is I want out of life.
Whenever you find a personal finance task boring, spend a moment to put it into the context of your greater life.
When you’re looking at retirement plans, envision a great retirement and recognize that part of getting there if you push through and get this decision right.
When you’re looking at budgets, imagine the things you really wish you could have in your life, then go through how you spend money and ask yourself whether your life is really worse without those items.
Think about the human side and then press through the numbers. You’ll find the process a lot more empowering.