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.”
“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.
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.
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.