It Has Little To Do with Math

Personal finances is a stressful topic for most. It is the number one source of arguments in the home for many families.

When the money runs out before the month is over the tension rises. For many this is a way of life. A stress that never seems to go away even as they make more money.

What is interesting to me is how little personal finance has to do with math. You would think it is all about math since it is just dollars and cents, but when it comes to our personal finances math has almost nothing to do with it.

We do often use the math to justify our actions some how even if it is funny math. But the math has little to with the decisions we make.

If it was just about math we would never carry high interest debt or have the gigantic car payment that we can’t really afford. If it was just about math we wouldn’t spend more than we make. That doesn’t make mathematical sense, but we do it.

The answer: make more. Mathematically that makes sense looking at our current spending. A little math would tell us that adding some more money will fix the problem and it would if it was just about math. The challenge is with the added money comes the same set of decisions we have to make. They may be dressed up in fancier clothes and look a little different, but we are still left making decisions that require much more than math.

I’m not here suggesting how anyone should spend their money. Only pointing out that we should look deeper than the math when it comes to our personal finances.

Is Giving Other People’s Money Really Generous?

My son came to me recently saying that he wanted to give one of his friends a gift.  It wasn’t an item of necessity.  It wasn’t the friend’s birthday, but my son knew it was something his friend wanted and he wanted to give it to him.

I thought that was a very generous gesture and told him if that is what he wants to do with his money that is great. At that point, the conversation changed. It turns out he wanted me to give his friend the gift.  He wanted to be the one to give the gift to his friend, but he just didn’t want to be the one to pay for it.

I told him I loved that he is thinking of others, but I also asked him if it was really generosity when he wasn’t willing to give his own money?  In the end, we both contributed to the gift.  He was willing to give with his own money, but only when he didn’t have the option to give with someone else’s money.

I couldn’t help but think that this is the real challenge with government.  Politicians are always spending and giving away other people’s money.   It is so easy to sound generous when we aren’t giving our own money.  I’m sure every single one of us could give millions of dollars away of someone else’s money in no time if given the opportunity. But is that really generous?

Generosity is so important.  As individuals, we should have the right to be generous with our own money.  We should teach our children to be generous with their money.

This is a much better approach than the government trying to be generous on our behalf.  After all, if the government gets too generous giving all our money away, we may not have the ability to be generous ourselves.

Individuals will give. Just like my son. At first, he wanted to give using my money, but when that wasn’t an option he gave on his own.

What do you believe about generousity?  Is giving away someone else’s money really being generous?