Tuesday, February 3, 2009

You Don't Need Math Skills to be Good at Personal Finance

Ah, my little blog, where I make confessions that ordinarily would make me blush. Ready for another one?

I am bad at math.

Not ferociously bad, just sort of generally bad. My brain works in different ways. I've always enjoyed reading and writing (though I can't spell), art and theatre. In school I liked English, History, even Science as long as it was about the how and why things work and not about the formulas. Then there is the whole "use it or lose it" thing, and believe me, I have lost a fair amount of whatever math skills I used to have from my school days. Oh, I can do the basics, and with a #2 pencil and a pad of paper can almost always come up with the right answer (after a try or two) on the harder stuff, but it still isn't my strong point.

I suspect that there are a number of us out there, people who are bad at math, but who are nonetheless trying to get their finances in order. Overall, I have found that while advanced math skills are certainly very useful, they aren't completely necessary. There are ways of getting around it. Here's what I do:

Whether you want to thank the Chinese in the 3000s for the abacus, Blaise Pascal for creating the first adding machine in the 1600s, or Charles Simonyi for creating Microsoft Excel, there is a wide variety of tools out there to help those of us in need of mathematical assistance.

Calculators - I have a calculator with me all the time, I bet you do too - right on your cell phone. It is a pain to use, but it works. I usually take a decent one with me when I know I am going to be out, but in a pinch, I have my cell. I use calculators all the time for everything from figuring out how far I have to go on my budget up there, using in the grocery store to make sure I don't go over my budget, to figuring out just how long I have until that pesky credit card is paid off. I know a gal who proudly tells me she can add her entire cart of groceries, in her head, and have it right to the penny at the checkout. That is a mighty impressive skill and one I wish I had, but since I don't, I use a calculator.

Spreadsheets - I don't actually use Excel, but I have a variety of spreadsheets that I have made to help me manage my finances. My budget, my balance sheet, my eBay and Amazon sales - all these I track in spreadsheet form. It sometimes takes a few tries to get the spreadsheets working just the way I want, but then once I do, all I have to do is plug in the numbers.

Online Services - I have been using a variety of sites to help me track my money. I use mint.com and my online bank account to keep an eye on my daily spending and FuelClinic.com to track my car's mileage.

Other people - When tools fail, fall back on people. I could do my taxes (and have) if they were simple. Back in the days of being single and having one job, life was easy and so were my taxes. Now that I have had a midyear divorce, multiple mortgages, multiple jobs, rental income and more, I am hiring an accountant to handle them this year.

Here's the point: being bad at math should not stop me, or anyone else, from working on their personal finance. Finance rarely requires involved math, and when it does, there are systems to work around that and help you figure out the answers. It does require the desire to be organized, but that can be learned. If you find anyone who says they don't try to budget because they don't like math (like I did last week) send them my way... and tell them to bring their calculator!

Classic math class photo by: Sam Starling


Catie said...

If anyone is looking for a good budget program, Milkyourmoney.com has a fantastic Excel budget you can download, and it does all the math for you. I took it, copied it 11 times and have the next year planned out. I am pretty good at math, but the one place I don't want to be making a math mistake is on my budget.....

Dawn said...

I hear you! If I had easy access to Excel, I'd be using that one too.

Miss M said...

I love my spreadsheets, fortunately I have excel at home and work or I'd be lost. I'm not terrible at math but it is my worst subject! My brain doesn't work that way, yet I'm an engineer? Most personal finance is basic math and there are a lot of online calculators to help with the more difficult stuff. You are right, no one should let poor math skills hamper their ability to tackle personal finance.

Dawn said...

Miss M - Couldn't agree more! I guess what I keep digging at, is the idea that there is no reason everyone can't be doing something about their financial life, if they want to. "Want" is the key thing.

momstheword said...

I hate math but don't tell my son! I loved your comment because it is so true. Just sitting around and waiting for someone to do the work and rescue you usually only happens in movies.

Fit Wallet said...

Oh yeah, spreadsheets and calculators are where it's at! I use those to overcome my math deficiencies.