I’ve been offering advice on finances and mortgages for over 15 years, and have helped hundreds of individuals and families—both in person and through the radio—resolve every financial problem imaginable. In that time, I have heard the phrase “easier said than done” countless times. And, indeed, most of the common-sense solutions to financial problems that you hear from radio and TV hosts or book authors are much easier to say—to package into simple, single-sentence platitudes—than to execute. For many individuals, this is because the advice runs counter to their nature; some individuals may be genetically predisposed to unwise behavior. This week’s show explores this idea and offers solutions.
Oftentimes the difficulty in executing certain advice, sound as it may be, reflects the difficulty of the situation. Mountains of debt, large monthly financial obligations, or a sudden loss of a job create conditions that make the practice of sound financial advice difficult. That is understandable and, fortunately, can often be easily remedied by making better choices—forgoing expensive dinners to instead pay off debt; downsizing an unnecessarily large house, using the saved money toward monthly bills, and saving the excess. But for some people, the accumulation of debt and large monthly financial obligations isn’t the result of a sudden shock but the result of undisciplined decision-making that they often cannot help.
It’s difficult for most people to empathize with an individual who has a genetic pre-disposition toward certain behavior. We can’t understand how other people willfully allow such things as alcohol, gambling, or shopping to ruin their lives. For most of us, it’s easy to say ‘enough.’ But for others, the thrill of immediate gratification is more important than delayed reward. In the realm of finances, this means spending whole paychecks or going into debt to buy new things rather than squirreling away money for future use—or, if you’re like my father, squirreling away money just for the sake of squirreling away money!
Some people are temperamentally inclined toward disciplined saving; others are temperamentally inclined toward reckless spending. Obviously it is far wiser to save than to spend, and so it seems those who are inclined toward saving are luckier than those inclined toward spending—although, truth be told, the only people that are immune from the temptation of spending sprees are ascetic monks. Everyone has to resist temptations to buy unnecessary things or assume financial obligations that they can’t afford. It’s just that the impulse to behave this way is far stronger for some people than for others, and often this is the result of genetics.
But genetics is not fate. As human beings, we’re not only able to make choices but to understand that one choice is inherently better than another. People are naturally inclined toward being brutish, selfish, and mean-spirited, but we’re able to act against our natures and decide we would rather be charitable and kind—most of the time. This is equally true for financial decisions. Just because it’s more difficult for some people to make the right decision does not mean it’s impossible; it simply means they need to exercise more resolve and discipline.
It’s easy for my to ignore this reality when giving advice. Since I only have one hour, I often condense advice into bullet points to tell people what they should do without fully recognizing the difficulty often involved in doing it. This show was meant to acknowledge the difficulty involved in practicing my advice, and to acknowledge that some people will find it far more difficult than others. As I give advice in the coming months—and especially during the start of the New Year—keep in mind that easy and simple advice is not meant to be easy and simple in practice, and although it can be difficult, it’s not altogether impossible.