Um, Like, You Just Need to Be Smarter With Money
By: Rocco Pendola
Tags: Personal Finance, Self-awareness, Self, Money, Life Lessons

Given the times we’re living through it’s difficult to comprehend why a songwriter would choose to effectively add to the divisiveness. Why wouldn’t they ask themselves the question I pose at the outset of this article? And if they did, how in the world did they decide it was still a good idea to release the music they released — in 2020?

With such a massive platform, you’d think you’d choose empowerment over heaping more anxiety on an already stressed-out audience. Maybe they had good intentions. Either way, the result was neither helpful or productive.

Words matter. Timing matters. Emotions matter. Self-awareness matters. Tact, grace, empathy, and compassion matter.

These things matter beyond songwriting and interpersonal communication. They matter when you’re talking about money, whether it’s in the present forum or one-on-one with a friend.

I read articles about money. I hear people say stuff to people who are experiencing money trouble. I marvel at how unhelpful and unproductive some of these things — even if stated with good intentions — can be.

For example, inflation. It’s a concept lots of personal finance types like to latch onto. Most people don’t think much about it. Others have a difficult time wrapping their head around the idea. With so much apathy and ignorance, it’s the ideal subject matter for the money guru:

It’s even more difficult to talk a friend down when they’re freaked out about having enough money to pay their bills. You can help your friend better situate their finances. However, if the first thing you explain to your friend is inflation, you’re a bleeping know-it-all who is ultimately doing them a disservice.

A manifesto about inflation — it’s the go-to line for so many people whenever the conversation turns to money. The classic, hey, look what I know!

Fantastic, except schooling somebody who’s trying to create a personal financial plan, particularly when they’re hurting, does little, if any good. Riffing about the purchasing power of money (“in twenty years, it will cost you $1.20 to buy what you can buy today with $1.00”) is the stuff of blowhards.

Inflation is simply one more thing we need to adapt to. We have no control over it. So you’re stating the obvious when you say you want the money you save and invest to outpace inflation. Or at least some of it. Because if you freak out about inflation, you’re bound to allocate your money too aggressively, leaving you potentially screwed.

You need pots of money. Some that don’t stand a chance against inflation. Others that will beat it (even though you can’t comfortably predict the exact number you have to beat and when you have to beat it). I’d go so far as to say you’re just fine to ignore inflation.

Why introduce a potentially complicated (and ultimately meaningless) concept to somebody who has essentially told you they don’t have an emergency fund because they don’t even know what one is?

Explain and empower them on the basics. This will result in a well thought out and offensively defensive budgeting, saving, and investing plan that will weather every unknown (even a global pandemic, even inflation!) without stressing over things we can’t predict and have little control over even if we could.

By the opposite token, don’t tell your friend expressing money problems that “um, like, you just need to be smarter with money.” Also, not helpful.

In fact, next time a friend stresses out to you about money, don’t say anything. Let it breathe. Let them get it out. Then buy them a drink. Change the subject. Proceed to make them have a good time.

Then, on day two, give them a call or shoot them a text. Remind them of the conversation. Lead with similar money tumult you’ve experienced. Include what you did to better situate yourself and adopt sound personal finance habits. Provide a resource or two to lead your friend in the right direction.

Obviously, they need to be smarter with money.