Tips, Tools

Being Good With Money When You’re Bad With Math

We can’t all be math geniuses. We didn’t all score A’s in calculus class. Most of us don’t even remember algebra. So how can we possibly be any good with money, right?

“I’m bad with math” is not a good enough excuse for financial failure. Either come up with something better or accept the fact that you can be bad at math and still do well with your money.

Let me help you along – here are five solid strategies for developing your math skills and taking control of your finances when your 2+2’s are not up to par:

Make Heavy Use of Tools

Before the days of computers, you were out of luck. You had to figure things out or give up completely. Now you have no excuse.

If you’re mathematically-challenged, make very heavy use of financial tools. Don’t go crazy and download everything out there, but here are a few ideas to start you off:

  • Tracking systems. Your principal financial software, like Quicken, Mvelopes, Mint, etc. The online varieties usually present your information in a very clear and visually pleasing format that is easy on the eyes.
  • Mobile apps. There are lots of fun tools that can make day-to-day life easier. For example, downloading a tip calculator saves you the next time you have to figure out 20% or split a check with your friend.
  • Online Calculators. There’s an online calculator for everything now. Want to buy a house? Bam! Trying to figure out what to save for retirement? Bam! Get on the bandwagon and calculate away.

Make It Easier On Yourself

If you’re having a tough time navigating the array of numbers in your financial system, it’s possible that you’re making things too difficult for yourself. Here are a few ideas for making your system more math-friendly:

  • Stop using cents. Round up everything to the nearest dollar, or even ten dollars. If you’re scared about falling short somewhere, round down for income and up for expenses. Review your balances once in a while to reconcile the difference.
  • Take away detail. I might want to know the individual balance of every investment account I own, but then again, a grand total might be perfectly sufficient. Why get all bent out of shape about the details?

Focus on Concepts, Not Examples

When you want to learn something new about money, most people will show you an example or overload you with unnecessary details. For you, my math-deprived friends, the concept is the golden ticket. Focus on it. Consider the following from two different perspectives:

“To buy a home, you need a number of basic conditions – new home expenses that are about 1/3 of your income or less, great credit, and a large amount of cash for down payments and purchase expenses.”

or…

“To buy a home, you need a number of basic conditions – your new home expenses must be no more than 28% of your income, while total debt expenses cannot exceed 35%. Your credit score should be 760 or higher, however – it is possible to get a home with 700 or more. You will also need between 5-20% of the purchase price in cash to cover down payments, closing costs, taxes and escrow as well as other purchase expenses.”

The second example means nothing if the numbers have your head spinning. You’re lost at 28%. Understand the concept at its simplest and worry about the details later.

Delegate

This might be my favorite of the bunch. Delegating doesn’t mean you throw up your hands and give up. It means you transfer the bulk of the mathematical work to someone else – permanently or at least until you can learn how to do it.

  • Your spouse might be a great person to load off on (although the more mathematically-inclined spouse is probably already handling the finances).
  • Accountants (although expensive) are also a good choice, especially for important stuff – like taxes.
  • A friend or family member might be willing to help you re-vamp your system and work with you until you get the hang of it.

Improve Your Skills

I’ve left this one for last, because there may be no hope for you. If you’re not interested in improving your math skills (you think you’re too old, too dumb, too…whatever), just follow the above four suggestions. Otherwise, consider:

  • Math games. Game developers have jumped on the skill-training bandwagon with titles like Brain Age. They not only improve mental acuity, but teach you tangible math skills that are useful for money management (like how to count change!).
  • Take a finance class. It might not be math that’s confusing you – maybe it’s just money! In either case, taking a class gives you the opportunity to ask questions, get extra help, and learn skills and shortcuts from your peers. More than anything, don’t be embarrassed about your math problem. You are not alone.
  • Learn a trick or two. The way kids learn math is fascinating, because there are amusing songs, shortcuts, or tricks to go along with almost anything. Learn a few yourself – whether it’s a math ‘operation’ or a new paradigm for money, it might make the process more fun.

Do Something

These five tips should get you going on your way to more control over your financial life. Just promise me that you’ll do something.

Sitting around and feeling sorry for yourself because you can’t add won’t make you financially successful. But with a little help, you can get there. Promise.

Photo credit: d3 Dan via CC2.0

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15 thoughts on “Being Good With Money When You’re Bad With Math

  1. I really don’t like numbers and the stuff you mentioned here really work. Basically, once you realize you suck with numbers, you can dumb your own finances down for yourself, make use of all the tools more math centric people have created and make it easy on yourself.

    • Wojciech Kulicki says:

      I like your point very much – a lot of people don’t realize or don’t want to accept the fact that they are not good with numbers. After all, it’s not easy to live with the fact that we’re ‘deficient’ in some way. I think this is the wrong approach to the situation.

      We all have strengths and weaknesses – why not rely on the math genius of others to, like you point out, create some great tools for the rest of us.

      • Who was it that said something like “If you’re stupid, you should surround yourself with smart people. And, if you’re smart, you should surround yourself with smart people who disagree with you.” Other people really come up with amazing techniques to do things that I never would have thought of, even though I’m quite brilliant ;) hah

        Anyway, I realized pretty early that I am not a number guy :) the letters F and D stood out pretty well in my math class, so I took to writing instead haha.

  2. Nice piece, Wojo, with some excellent suggestions!

    With respect to checkbook management and my income taxes, I always round up/down to the nearest dollar as required. Over the long run, the rounding averages out.

    Also, an Excel spreadsheet is also a great tool for managing money. That’s what I use, anyway. The only drawback is you need to spend a little time so you can learn how to manipulate it. I’ve got my spreadsheet automated and tracking my household expenses in a hundred different ways. You don’t have to go to such extremes though – the good news it’s really not too hard to master at the level required to manage a simple household budget. An hour or so of playing around with it, should be enough to get most anybody to that point…

    My $0.02 (after taxes),
    Len

    • Wojciech Kulicki says:

      I do like the Excel approach, and I think it works for many people. However, in my personal experience, I’ve found that people who are math-challenged with also have some difficulty in setting up an Excel sheet of any effective use. In that case, I would recommend either a pre-made Excel form, or to go with an established tool/software.

      Like you said though – you can make it as simple or complex as you want and it’s fully customizable, and I do advocate simplicity in finance.

  3. I’m all about the personal finance software. Put in your income and expenses, and let program do your math for you. Create graphs and reports and see things visually. It’s a great help.

    • Wojciech Kulicki says:

      I’m a very visual person, so I’m glad someone made the point. I love flashy graphics, good-looking charts, and well-designed websites. The right use of color and emphasis can make it or break it for me.

      All of the above might seem like superficial stuff to many, but when you’re trying to have your personal finance software communicate an important point to you, like how much money you have to spend for the month, or how your net worth is doing over the last year, clarity and the right emphasis are key, in my opinion. And the successful tools do it well.

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  6. Wojo – Cool title, and nice tips. I think the main number to know is the rule of 72 and stick on the upward and forward path to wealth creation!

    If we have the right process, it’s just a matter of time when we all become rich!

    See you over at FS one day.

  7. I’ve never been good at math, but I’ve found that good organization and a calculator is all I really need to keep track of my money. I use an Excel spreadsheet, online banking, and I keep the register in my checkbook balanced at all times, even though I hardly ever write checks. All the math I ever use to manage my money, I learned in first grade.

    I guess it would be more complicated if I had investment portfolios to keep track of, but I’m not there yet.

    • Wojciech Kulicki says:

      You’re right, Gillian–a lot of the math we use for money is basic. From my own personal experience, I’ve found that people who aren’t good with numbers can still largely do the math–but it’s the concepts and relationships between things they have a hard time grasping.

  8. Just found your site for the first time and like what I see.

    For the most part I enjoy working with numbers, but I can definitely sympathize with those who do not. I believe these are all excellent suggestions; there’s no reason why issues with math should affect our financial lives, as you’ve shown.

    I really like the one about rounding expenses up and income down. This also seems like it’d be a really good way to create more savings in a budget without even realizing it.

    Take care!

    -Blake

    • Wojciech Kulicki says:

      Glad you stopped by, Blake.

      Rounding up is an age-old trick that I can’t take credit for, but it’s especially good if you like working with round numbers because you can even round up to the nearest $10 or even $100 for some things and save a ton of money!

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