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  • Writer's pictureZachP

#86. Personal Finance Is Personal

Updated: Nov 13, 2023

"It's called "personal" finance for a reason."

The first time I heard that phrase was from Andy Hill, founder of Marriage Kids and Money.

It's a phrase I always try to keep in mind when writing or talking about personal finance.

The psychology behind people's spending and savings habits is often what drives most decisions (I will discuss this some in this post, but if this topic fascinates you, I highly suggest that you read The Psychology of Money by Morgan Housel).

And guess what, the best decision for you may not be what the numbers say.

Mathematics vs. Your Current Situation

Some of the most passionate arguments happen when people talk about debt repayment, home buying, and buying a new car.

The biggest problem with these arguments is that the numbers may explicitly say one thing, but these numbers do not take into account all factors that matter to you (such as family size and risk tolerance).

The numbers will usually say that buying your primary house is not a good investment, but that doesn't mean it is a bad purchase.

The numbers will usually say that paying off your primary home mortgage early is the wrong decision, but, again, that doesn't mean it was the wrong choice for your situation.

Why Does This Matter?

I could write a lengthy article showing that it doesn't make mathematical sense to pay off your mortgage early. And I could conclude that article by making the following definitive statement - your primary home is not a good investment!

This is actually how things go viral. Make a concrete statement and hope it gains traction with people on both sides of the argument. Then, you just sit back and let them yell at each other about it.

However, this is not how personal finance should work. I am not a financial advisor, but any good financial advisor will show you what makes sense financially speaking, and then discuss in a non-judgmental way what other factors matter to you.

Maybe as a child, your parents lost their house to the bank because they couldn't keep up with the payments. Then, because of this, you want to pay off your home early and be mortgage free as soon as possible.

Is that the best financial decision objectively speaking? Maybe not. But, if that decision helps you sleep peacefully at night, is that decision the best one for you? It very well could be.

How This Applies To My Blog

When you are reading my blog, understand my inherent bias. I am writing about what works for me and our family, not what works for every person.

I never want to write in a judgmental tone acting like I have all the answers. I am simply sharing our mistakes and triumphs, so you can pull out what information applies to you.

Oh, and like I said in a previous article, so you can also not make the same mistakes I have.

Please share your thoughts in the comments below. Let us be a community that helps each other grow. And if you enjoyed this article, don't forget to hit the heart icon, share it with your friends, and subscribe for more content.

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