This is the third blog post I’ve worked on today, with the intention of publishing it on June 7th. I wrote about two-fifths of a post about financial responsibilities that you’ll see soon (watch for a video on Facebook!). I also wrote half a post on why I want to FIRE, which I’ve promised before. But as I was writing the FIRE post, I thought about the key principle I promote in personal finance, and realized that somehow I’ve published over 30 blog posts and haven’t really discussed this principle. I haven’t discussed the thing I think is the most important thing to remember! What was I thinking?!? So without further ado, the (or at least, my) cardinal rule in personal finance…
Personal Finance is Personal
…and its corresponding principle, personal finance is far more personal than it is finance.
We’re going to talk a lot about the fundamentals of personal finance here. Every Friday I publish a lesson on a personal finance term, concept, or service. The goal is to inform you of some of the rules and laws of personal finance. This will enable you to operate within the framework of fundamental truths and legal realities of our monetary system. You can consider Finance Fridays to be the Personal Finance 101 class you probably never received in high school.
But then on Wednesdays, I try to apply those lessons to real life. It’s great to know what a budget is and how to write one, so we’ll talk about those kinds of things on Fridays. But then on Wednesdays, maybe we talk about budgeting for a once-in-a-lifetime trip to Tahiti. Or new budget categories to consider when it comes time to start a family.
This is when we’ll get into the personal aspects of personal finance.
What this means for you
Some of you are going to be really interested when I discuss early retirement. Others are going to think it sounds crazy.
Some of you will want to take out a TSP or 401K loan to fund a down payment on a house. Others will warn “it’s a terrible idea!”
Some of you want to spend your money on fancy cars. Personally, a car is a tool to me and I spend as little as I comfortably, safely can on transportation.
Some of you make well into the six figures. Others, significantly less. Some of you have lots of consumer debt, some only have mortgages, and some have no debt at all. Some of you are terrified of the stock market and others consider it a fun game. Those things will affect how easily you are able to implement some of the ideas you will see on this site, or whether you implement them at all.
All of that is good and important. Sometimes you will hear personal finance “experts” say that spending money on something is stupid. If you ever see me say that, call me out on it! There is no one thing that is stupid to spend your money on! I may tell you to make sure you have an emergency fund before buying the brand new Lamborghini at a 6% interest rate, but if you’ve budgeted for all of your needs and can still swing the car payment, go for it!
What Personal Finance is Personal means for this blog
My goal is to provide not only my own thoughts on the topics I cover, but also the other elements to consider. For instance in my post about My Investing Philosophy I talked about how short term trading doesn’t work for me. It may work for you. If it does, do what makes you happy…keeping in mind that over the long term, the average actively-managed portfolio doesn’t beat a diversified index fund 😉
And frankly, the principle that personal finance is personal means I might say some conflicting stuff on this blog. The best example I can think of is whether becoming a landlord is a good idea. Some days I think it’s a great idea and I start looking for new properties. Other days my tenant has done something annoying and my answer is “Nooooooo!!!” So just keep that in mind.
If you have a question about applying personal finance to your own life, send it in and I’ll give you a perspective. Just know that there are always other options. I’ve received some good questions so far and I like answering them, so keep sending them! Just remember that I would do won’t necessarily match what you should do.
Have a story about how you do something unique with your personal financial situation? Tell the story in the comments!
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