One of the common themes I’ve read this month is about the word personal in personal finance–what it means, how it applies to what we do with our money, and how it affects the general dispensation of information from bloggers and other personal finance writers.
In my mind, there are two schools of thought when it comes to personal experiences as they apply on a global scale:
View 1: Diverging (Inward-Out)
Imagine a very compact core of information (sort of like before the Big Bang). That core contains the basic principles of personal finance.
Now imagine that same ball has exploded, sending information branching out in a million different directions and down countless unique paths.
The diverging view takes this approach. It assumes that:
- The basics are the only component of personal finance that apply to everyone across the globe, and it’s the only common experience we share.
- Everything else is an experience that is completely unique to each individual.
What is the impact of following a diverging view? It means that we can only effectively teach the basics of personal finance with any sort of conviction that they will apply in a majority of cases. Everything else–especially personal anecdotes, will not have this universal application.
View 2: Converging (Outward-In)
The second view is something that Stephen Covey writes about a lot about. He takes the approach that the more specific, unique, and individual something is, the more it’s actually a universal experience of life.
Imagine a huge tree in the forest, with millions of leaves on its branches. Now imagine spiders, who live at the surface of the tree canopy, weaving intricate webs between these outer leaves.
In this view, we assume that the common things we all share are actually the threads weaved between our most specific experiences.
What is the impact of following a converging view? It means that we try to teach personal finance through the use of a lot of personal stories, specific examples, case studies, and similar tools, in the hopes that our experience relates to many of the things that other people are going through.
What does this have to do with anything? Well, I’ve heard a lot of comments lately against people getting too specific or too one-sided in personal finance debates, and how it’s basically pointless because personal finance is personal.
And while I agree that we can’t make sweeping generalizations and assume that one solution will work for everyone, I think we have to concede that there’s a little bit of “View 2” going on here, too.
If that wasn’t the case, why are people so drawn to personal finance blogs–especially those that recount personal stories of failure, success, and how-to’s?
What Do You Think?
How do you see the world of personal finance, and life in general? Are we all living unique lives, or do our experiences, however unique, have incredible commonalities across the globe? How do we use that information to teach personal finance to others?
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