Why Making Smart Financial Decisions Isn’t Just About Math
If managing your money were just about crunching numbers, we’d all be financial wizards by now.
The formula would be simple:
- Spend less than you earn.
- Invest consistently.
- Let time and compound interest work their magic.
But real life? It’s a bit messier than that.
Money is Deeply Personal
Money isn’t just about logic—it’s emotional.
It’s tied to how safe we feel, the dreams we chase, and even how we see ourselves.
You could have the most mathematically brilliant financial plan sitting in front of you, but if it’s too rigid or stressful to follow, it won’t do you much good.
Instead of asking yourself, “What’s the smartest move?” it might be better to ask, “What’s a reasonable choice I can actually stick to?”
Being Reasonable vs Being Rational
Let’s break it down:
Investing:
- Rational: Load up on shares, never check your balance, and hold on tight through every market crash.
- Reasonable: Build a portfolio that feels right for you—even if it means a little more cash or bonds to help you sleep at night.
Sometimes peace of mind is worth more than squeezing out an extra percent of returns.
Saving:
- Rational: Invest every spare cent to maximise growth.
- Reasonable: Keep a healthy cash buffer for the unexpected—even if it earns a bit less.
Because knowing you can cover a curveball expense is priceless.
Spending:
- Rational: Only spend on things that offer a direct financial benefit.
- Reasonable: Enjoy life’s little luxuries—like a good coffee or a weekend away—if they bring real joy.
After all, life happens outside of spreadsheets.
The Secret to Financial Success?
It’s not about perfection.
It’s not about squeezing every last cent into the “optimal” investment.
It’s about consistency—creating a financial plan that feels right for you, one that you can live with, year after year.