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Money Is Not Just Math. We are Humans not Robots

Sometimes you just know something is missing.

The traditional wisdom or guidance doesn't fit the actual experience.

This is true with money. So many people think money is just math with a $ in front of it. But in fact, it's far more complicated than that.


Here's how I first got interested in the softer side of money:


As a financial planner, I get the privilege of working with clients who have made great money choices every day. Small but correct money choices, made on a daily basis, add up to powerful results over decades.

But what I always struggled with was the client who could be shown the math with a clear plan to reach their goals, but could not get out of their own way. They consistently fell back into the same habits.

We could walk through the math, and the client would agree and seem to buy in, but a month later we were back off track.


And then I realized, I was doing the same thing too.


Many times, I wasn't following my own advice. Some small decisions I was making were not always the correct math decisions either, despite being a "professional."


Why is there a disconnect?


The truth is money is emotional. There are all kinds of feelings, thoughts, and wants that get in the way of us just the following math.

And sometimes that is fine. We are humans, not robots.

We just need to make sure that the "one-time" choice doesn't turn into a daily occurrence. That's what separates the people who reach their goals from the ones who do not.

And that principle is true in many things. Healthy eating, exercise, prepping for an exam, or in this case money.


What to do about it?


Much of the advice surrounding behavior and money is based on guilt. This is the tact many take when it comes to budgeting and saving. But if we are going to be successful, we need to remember we are not robots.

I became a better financial planner, and a better steward of my own money, when I realized this. This is not an excuse to spend frivolously or make a bunch of dumb decisions. But it is something we need to understand.


The best way I've found to deal with this is to use a "guardrails approach." It's still important to chart out a path and plan. There is never any replacement for that.

But instead of expecting to follow the line exactly, put some guardrails around it. Give yourself permission to be human, and to deviate slightly. Just don't let that one decision turn into a habit that jeopardizes your plan.