Applying the Golden Rule to Tough Personal Finance Situations

We’re all familiar with the golden rule. “Do unto others as you would have them do unto you.” “Treat others as you would like to be treated.” It’s a key concept in human morality and a foundation rule in most of the world’s significant religions.

For a lot of people, the golden rule comes at least somewhat naturally in human behavior. We’re pleasant to others most of the time, for example. Without the golden rule, traffic flow simply wouldn’t work at all.

Quite often, personal finance success means following the opposite of common sense. “Buy low, sell high,” for example, means doing the exact opposite of what would feel natural to us.

Yet, underneath that, the golden rule pops up in money matters more often than you think. Here are a few examples of sticky money situations where applying the golden rule can lead to a great solution.

Loaning Money to Friends or Family
A friend or a family member is hitting you up for a loan. You don’t want to loan that person money, but on some level you feel obligated to. What do you do?

You really have to apply the golden rule here. Do you wish to never have friends or family members lend you significant amounts of money? If you do, then you can honestly tell that person that you do not want to mix lending and friendship/family.

Even more importantly, you can tell your friends and family that you don’t ever want a loan to come between you, so you’ll never ask them for a loan if they’ll never ask you for one. Do it pre-emptively on a place like Facebook.

What if you’ve loaned/borrowed money from friends and family in the past? If you’ve changed your mind on the issue, then the experience from that lending must have taught you that it’s often not a good idea to mix money and family/friends. Be open about that. Make it clear that you don’t want to mix the two because mixing them in the past has led to frayed relationships, something you don’t want to repeat.

Getting Ahead at Work
When I worked for an employer, I saw many examples of people grabbing credit for themselves and ignoring the contributions of others. Because of that, I saw a lot of hurt feelings and mistrust and I witnessed a lot of relationships broken. I also saw career promotions happen sometimes because of that omission, but I also saw some serious career setbacks because someone didn’t play fair with credit.

What I never saw, however, is someone being set back for giving abundant credit to those who helped them. If you work in a professional environment for very long, it’s clear that you’re never actually doing the big project yourself. You’re always relying on others for something, even if it’s just the opportunity to work on the project.

Give abundant credit. When in doubt, bring up other names anyway and thank them publicly at every chance. You would want the same done for you, and it rarely is a career setback to publicly show that you’re a team player.

Marriage and Spending Money
I’ve seen countless marriages run into difficulty because one partner has a different idea about personal spending money than the other partner. I’ve seen hidden credit card bills. I’ve seen little white lies. I’ve seen people explode when the truth of their partner’s spending is revealed.

Think about it this way: would you like it if your partner deceived you about how much they were spending? Would you be hurt both by the deception and by the worse financial situation than you expected?

The golden rule points to the answer: be open about your spending. If you’re spending more than your partner likes, talk about it anyway. Look for some sort of balance or compromise that works for both of you. The important thing is to talk about your spending, even if you know your partner won’t necessarily approve of it.

After all, you would like to be treated the same way, right?

Loading Disqus Comments ...