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.
So What?
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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Fiscal Fizzle 
Sharing ideas and experiences with others is a great way to learn. I like to think of the blogosphere, and media in general, as a buffet. There’s something for everyone and you just go around and choose what you like.
Regarding personal finance in particular, I think this niche is great for anecdotal information sharing as most PF bloggers have no axe to grind. We are a chorus of unbiased voices in a world where many of us have lost trust in “the experts”.
The other issue is timeliness. Something that interests me greatly today may not have been relevant to me at all a year or a decade ago. I sometimes wonder how specific to get with my writing, but I have decided to try to mix it up with both general and more targeted information. Hopefully the information is useful to some people, but you cannot please all of the people all of the time.
.-= 2 Cents´s last post: RRSPs: Taking Money Out =-.
Love the buffet analogy, and that’s exactly how I think of the niche! I think my experience and knowledge about new topics is built from a total experience of multiple different streams and opinions of everyone that writes about that topic…
On the timeliness point, I think the best we can do is take the old fiction-class advice and “write what we know.” I could write about investments all day long, but honestly–I wouldn’t know what I was talking about. 🙂 So I write about other things!
Write what you know is great advice. I try to stick to that principle too. If I’m writing on a topic out of my comfort zone, I put in lots of links to people who know more about it than I do.
By the way, it’s nice to read about “other things”!
.-= 2 Cents´s last post: Book Review: Enough Bull =-.
Very personal.
I think that my love of numbers has blinded me to that fact, and only by reading many, many, PF bloggers, I’ve come to better understand this.
I can answer a question and it will will be mathematically sound, yet, since emotion and feelings come in to play, that answer may be wrong for that particular reader.
There are some concepts that are timeless, “spend less than you earn”, but other ideas that come and go.
As for my own style, I try not to speak in absolutes. Instead, I make suggestions. I try to offer my view with the question of how it makes the reader feel. Some sleep like a baby while up to their eyes in debt. Others are troubled by a 2% student loan that has 10 years to run.
Just my random thought on this topic. Nice article.
Thanks Joe! I learned the same lesson very quickly–one particular example that comes to mind is debt paydown: using the debt snowball vs. the classic method of high-interest-first. The latter makes sense mathematically, but the first works for many people much more effectively.
I suspect any clamoring about how “personal” personal finance is and therefore somehow not relevant to others has a lot to do with our hyper-individualized culture. Rugged individualism is certainly a prized trait of Americans, but there is a point where it becomes utterly absurd.
I enjoy reading personal stories because I am acutely aware of our interconnectedness. We need each other. It’s part of why we go to houses of worship, build friendships, get hitched, and read about and interact with strangers over the internet. Money can be one of the most stressful issues in peoples’ lives. Sharing experiences allows us to feel connected to the greater human family instead of freaked out and overwhelmed by stressful events.
One of the purposes of my wee blog is to demonstrate how relevant the global human family is when it comes to our personal finances. We can support slave labor or fair wages with our purchases, particularly in the age of globalization. I don’t see how one can be aware of life on planet earth and not realize that personal finance is deeply tied to the greater whole.
.-= ConsciouslyFrugal´s last post: City-Specific Discounts =-.
What an awesome point! I hadn’t considered it from the perspective of culture, and that actually makes a lot of sense.
Your thoughts on human connectivity are right on point–I think sometimes we feel like these specific events are so unique to our situation (both good things and bad) and don’t realize or want to accept that others are going through the same things.
Like being new parents! I will likely never have wee ones, but I sure do love to read about such exciting and challenging changes in other folks’ lives.
Just wanted to take another opportunity to say congrats. 🙂
Thanks again! 🙂 It never gets old, I love the attention as much as the little guy.
Absolutes are great, but they don’t inspire and we can’t relate to them. Much like when I was sitting in my econ classes in college. My best teachers taught through hypothetical stories so that we could grasp what it meant in relation to ourselves. If you simply tell someone to ‘save more” they’re not going to do it. If you show them exactly how to do it step by step in their own life (each life is different of course) they’ll relate and understand.
I’d also like to say that I completely agree with Consciously Frugal in that personal finance is a reflection on society as a whole. Through trading value view dollars we see human desires and wants reflected. It’s very interesting to know this and wonder about mankind as a whole. But I digress.
Interesting perspectives, but I think I lean more towards Covey.
.-= Ryan @ Planting Dollars´s last post: The Part Time Job Search =-.
Excellent example–I think people relate to case studies, even if they can’t apply it directly in their own lives. People are smart enough to know how to gather multiple examples of others and deduce a course of action for themselves that is likely to succeed.
Rather than, as you point out, a “save more” approach.
I agree that everyone’s personal financial situation is unique so the same advice will certainly not work for everyone. However there IS a set of core principles that is unchanging if you want to attain financial independence: Live on less than you make, save and invest for the future, get on a budget, don’t buy things you can’t afford. The principles are the same for everyone, but can be applied with many different methods.
Understanding the basics of how money (really) works enables people to sort through all the specifics out there and identify what works and what doesn’t for their specific situation.
Great post!
I completely agree; in fact, I’m writing a post for Untemplater as we speak that addresses those very principles. Thanks for commenting!!
It depends whether we’re talking about how people learn, or how they want to learn.
Not to get too preachy about it, I wouldn’t like to know everything I know about personal finance and investing from reading blogs. I read a lot of good books, completely devoid on the whole of personal experiences, and it gave me a good grounding.
Now, I *did* learn stuff on my own as I went. And over time I spoke to a lot more savers/investors, and eventually I discovered the personal finance blogs, and it’s all very compelling.
But am I learning more from blogs compared to reading a book? I’m not convinced? Is reading my favourite blogs more fun? Absolutely.
All of which makes me think Monevator (my own blog) should be less like a book and more like a provocative entertainment platform focussed on personal finance – something I think in fact you’re doing very well here. (Also – super clean theme. And no ads?)
But we all write as we must over the long-term… whether we look inward or outward, we have to do what comes naturally I feel.
.-= Monevator´s last post: Playing chicken with house prices =-.
Blogs are definitely just one component of the big picture. I enjoy reading books, checking in with “big media” outlets, etc. to get my daily fill of money talk.
But I definitely like the fact that I can read 100-150 blogs on a daily basis and get a lot of different viewpoints on the same subject!
P.S. Thank you! I just simplified it a bit this week (sidebar was getting too cluttered for my taste). I show one AdSense ad to search visitors, and mostly rely on residual affiliate income right now…everything else will come in due time.