Quite often, in the personal finance sphere, there are a lot of intelligent posts and discussions ongoing. So much is written about making, saving, and investing money. There is also quite a bit of discussion on avoiding debt. Clearly, a lot of bloggers get the basics of money management, and love to share these concepts with everyone.
The thing is, when reading a number of such blogs, it can be easy to fall into the trap of thinking that most people think this way. As in, the idea that most people make reasonably intelligent decisions with money, and have a solid understanding of both what to do and what not to do.
I don’t think this is the case, and it took a non-personal finance situation to remind me of this reality.
Recently, it has been incredibly cold here in Chicago. Schools were closed for two days as some of the coldest weather I’ve ever experienced descended upon this part of the country. The “polar vortex”, as it has been called, has seen temperatures go down to 15 below zero with wind chills past 40 below zero. This just days after we had a multi-day snow event that brought over 20 inches of snow to some parts of the area.
We’ve had Siberian-like weather here. Clearly, not the weather you want to venture out in.
Nevertheless, there are some people that just don’t seem to be fazed.
On Sunday, a day before the extreme cold hit, I was at a local grocery store getting food. Understandably, the store was completely packed, even though the weather on that day was less than ideal (snow, 10 degrees). It was going to get worse, we all knew it, and there was this feeling that the end of the world was coming. Not really, but this weather was no joke, and people are smart enough to prepare.
Except a few people at the store. They showed up wearing hooded sweatshirts and jeans. This in 10 degree weather. There was one guy who showed up in a short sleeved shirt and shorts. Yes, in 10 degree (and dropping fast) temperatures with tons of snow on the ground, the guy wore shorts to the grocery store.
Wouldn’t it be common sense to realize that this is dangerous? Wouldn’t it simply be uncomfortable?
Of course, but that didn’t stop that guy. Nor did it stop the others visiting the store without a heavy coat, hat, gloves, etc. Why?
Well, I’m not about to analyze why.
What I do know is that it served as another example that there are people out there who might otherwise be intelligent, nice people – but they simply want to do what it is they want to do. All the common sense in the world won’t be enough to get these people to do the sensible thing and bundle up to avoid getting sick.
Relating this to personal finance, it tells me that there are clearly too many people that might be well-meaning, but make similarly brainless choices with money. Taking on massive credit card debt because they “want” something, buying a “dream home” they can’t afford, or any number of moves. People make them every day.
In other words, if people can be cray cray enough to freeze in 10 degree weather, they can be cray cray enough to make really bad financial decisions. We just don’t encounter too many of them on personal finance blogs.
Why does this resonate with me?
Well, as a personal finance blogger, it’s another reminder that there are people that could really be helped by reading about how to manage money and plan their financial future. There is value to these posts, because they can help people. Validation of our efforts! Clearly, there are people that can use the help.
Also, if you’re not a blogger but currently doing a good job with your own finances, pat yourself on the back. You’re doing something that many other bright people can’t bring themselves to do.
Like wearing a coat and long pants in 10 degree weather 🙂
My Questions for You
Do you ever stop to think how personal finance basics can be a total mystery to some people?
Why do you think it is that some folks reject common sense? Is it simply lack of knowledge, defiance, or both?
What do you think is a good way to get someone aligned with good money management practices, if they don’t currently practice them?
Great post! We have been dealing with the“polar vortex” here in NY, not as bad as some ares, but still a number of single digit degree days. I’ve witnessed a number of people out in shorts and hoodies. Most of the time is teenagers or young adults. Maybe the cold doesn’t bother them or their parents never taught them properly. I’m not sure, but don’t want to judge.
Personal finance was a mystery for me for a number of year. I just think the general basic knowledge is never taught at home or in school. I know most of the principals are common sense, but I overlooked them for years.
I think the best way to introduce someone to money concepts is to talk about your own situation. When I mention to someone I have paid off $86k in debt they become interested and want to know how.
Thanks! Great point that teaching by example can be effective. The reality that you’ve paid off that much debt should – hopefully – spark some interest from those with debt they know they should be tackling.
Society as a whole has lost common sense. We live in the now world, where everyone wants to fulfill their wants right now. The lost art of being financially responsible isn’t viewed the same as it was 50-60 years ago before credit cards were as bad as they are today. It’s simple ignorance now, people especially younger generations see everyone in debt so they believe that’s they way life is because they were never taught another way of living. Financially responsible now days is simply paying off debts on time.
That’s probably true, it sure does seem like there is a tendency to think that simply paying debts on time equals financial responsibility. The bar has been lowered with easy credit, but the principles remain the same.
I’ve observed the same thing. Our neighbor wore backless slippers to shovel their drive. I’ve seen (usually young) girls wearing short shorts with Ugg boots in zero degree weather. Maybe this is a new fashion trend I’m too old to appreciate.
Ha! I think I’m too old to understand that too. People should bundle up in cold weather, not treat it like a warm weather fashion show.
I don’t think it’s necessarily stupid to go out shopping without a coat in cold weather, although the shorts might be pushing it. I live in the Canadian prairies, so I know when and how to bundle up, but for a shopping trip, it is not always necessary, especially since I live in the city, so no worries about a breakdown in an unpopulated area (not to mention the emergency winter gear in my car).
If I am only walking from house to car, then car to store, I can weather the cold for that long, and then not have to worry about overheating in the store, or carrying a bulky coat and not losing mittens and hat. I don’t think a few minutes in the cold will make an otherwise healthy person sick. In fact, I find a few minutes in the cold quite refreshing. -40 will see me bundling up though.
I agree that there are no guarantees someone will get sick. That said, it’s probably increasing the likelihood by wearing shorts in 10 degree farenheit (minus 12 Celsius) weather. Plus, it just seems….like it would feel cold! But hey, we each have our preferences 🙂
Oh yes, there are folks out there who could benefit from basic financial literacy practices…. I personally know several whom I’ve been unable to help.
The fellow in shorts might have not yet have faced a vehicle breakdown in cold weather. Or if he had, didn’t learn much from the experience. I’ve gone out lightly dressed in the cold (not shorts, though) for a quick run to the store, but I do have extra gloves, hat, coat, etc. in the truck.
@ Jenny — good for you having an emergency winter pack in the car. Most people don’t follow this basic precaution.
I think your last question is the most important. Unfortunately, I don’t have a good answer. For question #2, I think people reject common sense just because that’s the way they are. I have a good friend who is very smart, but he is a dork when it comes to common sense. We used to go camping with him all the time, and he would break both his and our camping gear all the time. He would say it was just part of camping and never pay for anything he broke. We don’t camp with him much anymore. Finally, #3. I know personal finance is a mystery to many people. I have another good friend who unfortunately lost his job in the Great Recession. It took more than 2 years for him to land a new job. During that time, he and his family just went about their normal lives as if nothing were different. They now have no savings and racked up $60k in credit card debt. He asked me about refinancing his house the other day so he could pay off his credit cards. Sure, let’s secure those unsecured loans with the house. Sheesh!
Interesting post Ray! The subject of behavioral economics is an interesting one and goes a long way to explain why people make the financial decisions they do. In many instances people make decisions to spend or buy based upon a deep emotional need. Why do you think many commercials on TV try to get target viewers to identify or sympathize with one of the characters in the commercial? By connecting their product or service to a strong emotion in the viewer, the viewer is much more likely to buy that product. Of course not all of us make decisions the same way but it is shocking how effective this type of advertising is!