Practicing What You Preach

Recently, a dustup occurred in the New York Times, where a regular writer on personal finance topics, MP Dunleavey, bought a home on the spur of the moment. The problem? Based on her earlier writings, that home purchase seemed to be far outside of what she and her husband could reasonably afford. Karen Datko at the Smart Spending blog has an excellent summary of the whole story.

Obviously, Dunleavey’s situation made me think about my own. I often relate details of my own personal financial situation on here and I know that if I were to suddenly go buy a McMansion, a lot of readers would be really confused because it doesn’t match up well with what I’ve been talking about for a long time.

It’s reasonable to believe that a personal finance writer would likely be able to make a good personal finance decision for themselves. If I were to buy a major house upgrade right now, it would be because I had the money available to buy it. I would not enter into a financial situation on the spur of the moment.

On the other hand, my exact reasons for making such a move – and the exact mechanisms for doing it – might not be something I’d want to discuss. Let’s say, for example, I received a financial settlement of some sort that I didn’t feel was appropriate to discuss on The Simple Dollar – or that I was legally barred from discussing. I would likely mention the purchase of the house, but I wouldn’t be able to really mention how I paid for it.

Of course, the other option is to simply not mention financial situations that don’t match up with what I’m talking about. In other words, selective editing. With the exception of personal issues, I don’t really do this – it’s basically too difficult to engage in an “alternate reality” when talking about one’s personal finances. I occasionally blur some things to protect privacy, but that’s about all – it’s much easier (and more honest) to speak the truth and come from the heart than to exclude or alter big swaths of the story.

It all comes down to establishing trust. I think that the real issue here is that some of Dunleavey’s readers don’t trust her, for whatever reason. No writer is trusted absolutely, of course, but honesty generally comes through in writing and is clear to readers over time.

Regular readers here know that I usually speak my mind and admit my faults, but that I’m also willing to argue if I feel strongly about something. That’s honest and real, and I think that a big reason why I’ve found so many readers is because of that honesty and reality. There is a level of trust there, and it’s because of that trust that I’ve done things like dropping most of my ads – I value the trust more than I value some short term income. What are my rewards for that? A loyal readership, one that will stick with the site for the long haul and are more likely to trust me if I make a recommendation or a suggestion.

That’s not a conclusion that some writers come to, but that’s not a reason to mistrust them. The reason that it’s worthwhile to read different views on things like personal finance is that you get different perspectives. Some writers focus on the prose – others focus on researching their topics quite well – still others focus on humanizing the topic. There are, of course, some who focus on maximizing the immediate dollar, too, and will write whatever will put a dollar in their pocket the fastest.

The value comes in reading lots of ideas and figuring out which ones are right for you. You may come to trust some writers more than others – that’s completely normal. But that doesn’t mean that the writers who are less forward about their own personal finances don’t have anything valuable to say, and it doesn’t mean that the people who gaze at their own navels a lot are wasting time, either. They’re both valuable.

I think the biggest problem that readers had with Dunleavey’s house purchase is that it seemed very rushed and sudden. After spending a lot of time talking about personal finances and using some personal examples that indicated that they were in “debt repayment” mode, the house purchase was abruptly put out there without any clear explanation about it, and in the way she wrote about it, I think Dunleavey overestimated the trust she had built with her readership.

So what would I have done in Dunleavey’s shoes? First of all, I would have been absolutely sure that I could afford the house according to my own definition of “affording the house.” By some definitions, anyone who uses a mortgage can’t really afford a house, for example, but I’m not that hardcore. On the other hand, taking out a mortgage for five times your annual salary without any money in the bank is pretty clearly a sign you can’t afford it. The actual line is somewhere in the middle.

Assuming that I could afford it, I would probably lay out the whole decision in writing and turn it into a post on here before pulling the trigger. More than once over the last year, readers have been invaluable at seeing flaws in my own thinking and also encouraging me to think about things differently. That’s another aspect of the “trust” relationship – it’s sometimes a two way street.

At that point, if everything seemed appropriate, I would have moved forward with the buy.

If I was forced into a situation where I had to make a move quickly, I would probably say “no” unless I was absolutely sure of the move, and if I said “yes,” I probably wouldn’t abruptly write about it here and just state that I could somehow magically afford it when there’s a clear history that I couldn’t. Instead, I would probably carefully analyze the decision over time on The Simple Dollar, looking at the factors that made me say “yes” quickly, and try to really piece together why I did it rather than just stating that it was the right thing to do.

Writing about personal finance sometimes turns out to be harder than you might think.

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