I’m Over Financial TMI
Wed, May 23, 2012
banking, behavioral finance, budget, confessions, saving, spending
Late last night during a conversation with JT from Money Mamba, I discovered a very important fact: I am beyond tired of financial TMI. Now, I’m not talking about people who talk about their income and expenses, because goodness knows I do that all the time. I love knowing what people spend their money on and how they’re really doing where their finances are concerned. So few people (even bloggers) are willing to be upfront about things like that. What I’m talking about, though, is the idea that MORE information is always better.
At some point, some important financial entity decided, “Hey, you know what would be a great idea? We should give people access to a million times more information about their finances! That’ll really help them!” So we ended up with all these online tools that let us calculate our net worth, compare our debt to the national average, and find out how many paychecks it will take to pay for laser hair removal.
Here’s my issue with that. If you have trouble managing your money, it’s often because you aren’t keeping up with things like balancing your checkbook. So how is it going to help you to get all distracted by pie charts that show how much you spend on toothpaste? In my opinion, that just gives you something new and shiny to look at, and in the meantime you still aren’t balancing your checkbook.
Got Money Problems? Time to Simplify
When I was actively adding to my mountain of debt, even the most straightforward tasks seemed impossible. Check my bank balance? Ugh, I don’t want to know how bad it is! Keep up with receipts? I don’t want a bunch of paper in my purse! No matter what I needed to do, I found a way not to do it because I was overwhelmed. And having access to even more information wouldn’t have done a darn thing to change that.
What I needed was an easier system that worked. Forget net worth - I still don’t bother checking it because I already know it’s a negative number. Forget calculators and graphs and fancy apps for my phone. All that stuff is great for people who are ready for it, but I wasn’t.
My regular readers know what happened next. I found a better bank that provided me with more information than my old one, but not more than I could handle. I always know how much money I have free (versus just what’s available at this moment) and I no longer overdraft. The funny thing is, once I started understanding the basics, I moved on to other things like starting an emergency fund and blogging about finance. These days I can actually look at some of those websites and their cool charts without having a nuclear meltdown inside my head.
Coming Back to My Point
Millions of people search the web every day for things like “how to write a check” or “how much is minimum wage”. And I really wish someone would think about them for a change. If they don’t know the easy stuff, how can they benefit from a website that provides information overload?
Sure, there are also millions of people who know what they’re doing, and who love being able to see all that stuff. I’m aware of that, so please don’t email me to rant about how much you love your Mint.com account. I get it. I just know that feeling of utter confusion when you log into an online account and tons of detailed info is staring you in the face. Where is the website for people who aren’t in a place where they can deal with that yet?
Financial TMI is everywhere these days. I can only imagine what a headache it must be for people who are struggling with their finances and just want to get the small stuff under control first. And in the interest of full disclosure, I still don’t balance my checkbook.
What do you think? Is financial TMI a wonderful thing, or do you think it’s a distraction? Have your finances improved dramatically as a result of having access to more information? I’d love to hear your thoughts!
I think this is why I don't like Mint.com. Even for me, I found it extremely overwhelming. I would rather be able to pick and choose how much or how little information I want to see.
Exactly, Andrea. Speaking from my own personal experience - what I needed when I started my journey out of debt was help in budgeting, and motivation to live within my means. Structured. Simple.
Information overload is everywhere, for sure. And even though the financial basics don't overwhelm me, I have let myself be overwhelmed by it in other areas, which has held me back in getting started in consulting, etc.
I actually have a Mint account - but the process of updating it is so tedious I never use it. I use a spreadsheet to balance my chequebook. It works. Sometimes simple is best.
Love your focus on simplifying! You are absolutely right. Most people are in financial trouble because they are overwhelmed by financial information. More tools and details just complicate an already complicated picture that they need simplified. Say goodbye to financial TMI!
You hit the nail on the head when you mentioned being overwhelmed. There is a way of thinking, especially here in the US that more is always better. More car, more house, more accounts all are signs of "status" and make people feel better about themselves but what they end up doing is causing more confusion or problems.
The solution to many problems would be to get back to basics. I wrote a while ago about consolidating the number of accounts in order to get your financial house in order and to be better organized in an attempt to gain control over finances. I also talked about all of the surveys that guide the market and how they are established by asking random people who may know very little about simple things like how to write a check or budget their money.
More doesn't always mean better. It often times leads to another more that you mentioned…being confused. It's natural for the availability of information, like more access to what others are doing or how they live, to become readily available as technological advances keep happening. The key is to make sure that this information is being used to help rather than hurt people. As you said Andrea, help them to find information so they know how to write a check or balance a checkbook. help them find more information about the right way to use credit. Give them more information about ways to make their money work harder for them.
I am a firm believe that getting back to basics is the best way to go.
I do believe there is a lot of information out there but I don't think people use all of it. I think they basically pick one or two resources they like and use those, from time to time they may try something else but I think people usually pick the ones they find the easiest and most interesting and stick to those. They are an abundance of blogs out there, but we still only read a select few, we sneak a few more from time to time but they are a set that we almost always read.
I don't know, I haven't really thought about it.
I track my income and net worth, and my spending but I don't know if it's TMI. I definitely don't do minuscule calculations like how many paydays until I can afford something… I kind of just want to get my debt of my back and move on lol
I can see how someone would feel overwhelmed. Going from not managing your finances at all to getting bombarded with all the choices out there is probably scary.
First off: Love, love, love the new blog layout! Very pretty, some day when my blog actually makes money, you'll be the first one I call for a redesign!
Second: Yes, while that information is helpful, it's really only helpful the first time you see it. I'm at the point now where looking at all of that extra information just gives me anxiety. I know where I'm at, financially, and analyzing graphs of my net worth and debt repayment doesn't do anything but make me anxious about how much further I still have to go.
Good post!
I love the new layout! I know I can check my networth but honestly, after I thought about it-I'm not sure about the point right now. Maybe when I'm closer to being positive but right now I'm so in the negative it's not even funny.
Instead, I've been focusing on watcing my savings grow (slowly) and paying down debt. I balance the checkbook and love it when every month it's been positve. And eventually I might be in the place that I want to look at more. But when I tried out a calculator to see how long it would take me to pay off debt, in just made me sad and lose my focus.
I don't balance my checkbook either and I don't think I have for over 4 years. When I first started making good money at my first real job, I was Googling all the stuff you mentioned and more. It's definitely less common to find those topics and it's definitely a struggle at the beginning. Heck sometimes it's still a struggle now - even with all the fancy graphs and net worth calculators. WTB Simplicity. Love the new blog look! It's fantastic - and you're a genius (but you already know that).
I enjoy simplifying. It's all about financial peace for me and sometimes people make getting out of debt, building wealth, and frugality as way more of an important part of their lives than it should be.
I'm a financial advisor and it drives me nuts how much information people can get. Too much information often cripples some people. It gives them so many options that they can't figure out what to do or where to go.
It's like going to a restaurant with a menu that's 6 pages long and has 15 different types of food (pasta, steak, burgers, wraps, chicken, fish, etc.), and one that has a 1 page menu with a total of 5 real things to choose from. It takes me forever to choose when I'm at a restaurant with a HUGE menu. I just want things to be simple. It narrows down my choices and helps me make a decision.
I love love love the new colours!
And yea, I try not to share too much personal stuff online.
Wow, I totally agree. When people say the word "IPO" I pretty much tune them out. I do know how to balance my checkbook (I may not do it, but I know how haha), but there are so many people out there that just need to start heading in the right direction. There are just starting out on their journey and need the baby steps to get somewhere. Great job, Andrea.
I love the new look!!!!!!! I'm a bit partial to pink, if you can't tell Anyway, this post is so true - get back to the basics people. Learn the ropes before engaging in the other tools that are available to you. Here's a calculator, and here's a pen - now do the math and add up your debt, savings, income and you can totally create a budget that way.
I'll be honest, I was also overwhelmed by everything. I had a friend yelling at me to read PF books and she raved about Mint so much. I logged on and never went back on again until I finally decided to take charge and learn the basics of saving, budgeting, etc. What finally hit me was learning how much everything costed and what I was making each month. People need to take a good look at the basics first before diving into all the wonderful financial tools! Heck, I didn't even have a net worth…it was negative at the time, and all I had to do was CARE. That is how I started with personal finance. Sorry for the long comment!
So true! When I decided to get out of debt, balancing my "checkbook" (I don't use checks but still use my register) was one of the hardest lessons to learn. Also, writing up a realistic budget was another difficult lesson to learn. I do love that there is so much information that you can access, covering many aspects of personal finance, but the "meat and potatoes" of personal finance never really popped up. I know you loathe her , but Suze Orman does have a great budget worksheet on her website that is incredibly detailed and covers so many places you never think about assigning money to until it is too late and you are overdrawn.
Also, love the new look! You are so talented!!! What a great way to showcase your mad skillz!
I do think it's a bit overwhelming. There is WAY too much info to know all there is to know. Knowledge is power, and that is fine. But there is always something as in too much info.
I actually think this is why I've stayed with my homegrown budget spreadsheets in excel and never moved on to a program like Mint. I have my spreadsheets set up to show me what I need to know, in the way that makes the most sense to me. If I want more information, I know where I can look to find it (okay, not how much I spent on toothpaste, that's just part of the general grocery budget) and I can create my own graphs- which I love doing, BTW -if I want to see something in graph form. But that always means I'm seeing exactly what I want and need to see, not what someone else thinks might be useful for me.
Love the new layout/color scheme!! I am SO with you on everything you wrote here. It kind of reminds me of how I feel about WebMD. You type in "stomachache" and walk away from your computer 15 minutes later convinced you have a massive tumor.
I literally lol'd when I read the WebMD part hahaha!
You hit the nail on the head. We see people every day come in overwhelmed with their finances (I work for a credit counseling agency). Because of financial TMI when we ask clients what they feel are their biggest financial struggles we find they often are focusing on the wrong issues. When we give them simple tools to use and maintain we find they do use them and make progress on reaching their goals. Simple works!!!
Simple is good while you are getting started out. When you start getting beyond the basics though it is often helpful to have more information. If you are trying to get out of debt though I totally agree that it would be distracting and overwhelming.
When I was a kid, my neigbor was a high school teacher who taught a class on life skills like balancing a checkbook, doing a simple budget, etc. It would be nice if they still did things like this, especially now with availability of credit cards and bill me later type deals. You can get a Ph.D but still not know basic finances. Love the new site!
I've had moments (often spanning weeks and months) where I let laziness make things way too complicated. So I inevitably simplify things - cures what ails me!
I am with you on this one. I love it when people talk money with me, but all of those extra things just seem like too much. I don't like feeling overwhelmed and distracted, especially when it comes to something fun like money.
I like the option of having these tools available, but until I'm ready to use them correctly, I also don't want them breathing down my neck. That's why I'm glad that the finance software I use (Moneydance) allows me to add as much info as I want. If I don't add it, it doesn't show up. Someday (maybe…) I'll figure out all the bells and whistles that tell you the exact day and time I'll have paid off my mortgage at my accelerated payment rate, but for now, I'm happy knowing it will be early.
This is really interesting to think about…I definitely Google all sorts of random things that I have questions about, and frequently I come up with way more information/way more in-depth information than I want. And as a well-educated, very literate person with a lot of experience in digging through information for the important stuff (I feel like that’s all I do in grad school, some weeks!), I can usually figure out what I want, but someone with less patience, less time, or less experience digging through stuff might give up more quickly.
Also, I really like the new design! I find the background color very soothing
I agree with you we need basic information. Like I recently wrote my grandfather did not know how to balance his check book when my grandmother died. He said she did that! He actually did not know how to even write a check. I'm trying to balance basics with things people want to know at my site.