When most of us sit down to learn about personal finance, we head for the personal finance aisle of the bookstore or library (or the top personal finance websites). We read the books by Dave Ramsey, Suze Orman, Jean Chatzky, David Bach, and the Bogleheads and think we’ve learned all there is to know about finance. This single-aisle approach is only a start, however.
I would argue that the people who are the most successful financially take an interdisciplinary approach to finance. That is, they don’t limit themselves to one aisle of the bookstore. They realize that many other subjects can be helpful in creating a sound approach to money. Since money affects nearly every aspect of our lives, it only makes sense that studying more than just finance would give us a clearer, bigger picture of the things that affect our money and the things we can do to change our fortunes. Those who take the time to educate themselves about a variety of subjects often understand money and opportunity better and thus give themselves more options. Here are some examples:
Our physical health often dictates our financial health. If you’re unhealthy, expect to pay a lot more for doctors and medications than a healthy person. Studying the latest advances and theories in health and wellness (everything from weight loss to managing chronic conditions) can make you a more informed patient/consumer when it comes time to talk treatments and costs. More wellness knowledge also reduces your risks of long term health problems and an understanding of how to treat minor illnesses and injuries can save you some trips to the doctor.
You wouldn’t think that science has much relationship to money. But, for example, think about what advances in chemistry could mean for drug manufacturers, which might impact your healthcare costs. Or think about how better understanding weather patterns could lead to better storm preparedness and prediction, and how those ideas might impact your insurance rates. These are just a couple of examples of how science can affect money.
Environment / Sustainability
Whether or not you believe in global warming/climate change, there is little doubt that issues surrounding resource depletion, commercial farming, overfishing, overpopulation, and pollution are going to impact our financial lives in the future. Learning how to make do with less and taking environmentally friendly actions (which often save you money), can help preserve your finances in the face of change. This also goes hand in hand with knowing more about science because many of the solutions for these problems are going to be science-based and the problems themselves require a basic scientific understanding to fully grasp.
Crafting / Gardening / DIY
The more you can make or do yourself, the less you’ll pay for others to do the work. If you can garden or craft, you’ll pay less than you would to buy commercial equivalents (and you might be able to sell your creations for extra cash). Most new skills can be easily learned and there are plenty of books available on everything from homesteading to building a deck to growing a window garden.
Many great philosophers have pondered money. Even those that haven’t directly addressed money have likely pondered the ethical and moral issues surrounding financial issues. You might be able to draw on their wisdom.
Most major religions address money and ethics. Knowing more about your own faith and the faiths of others can give you insight into how better to handle your money in accordance with religious teachings.
Biography / Memoir
Nothing is more motivating than seeing how someone else succeeded in life (or failed). The biographies you study don’t have to be about business tycoons or financial advisors. Politicians, world leaders, scientists, historical figures, military leaders, and artists can all teach us lessons about success, motivation, making do in tough times, and inspiration.
Laws are made every day that affect your finances so you want to understand the basics of the political process. If a negative change could affect you, you need to know about it and understand it so you can lobby your representatives for change and make the right changes to your budget.
History / World Events
World events (drought, war, etc.) change the prices of the goods we buy and where they come from. This helps when you need to know which markets to invest in, or which ones to exit. History can teach us many lessons about money (spending some time studying the Great Depression is an eye opener, for example). Even studying ancient history can give you some ideas about how to make do with less, or teach you about the economic influences involved in Rome’s collapse. It’s often said that people who don’t learn from history are doomed to repeat it, so you might as well learn what our ancestors can teach us about money.
Reading about successful business strategies may seem useless if you don’t have your own business, but what makes businesses successful can work on a smaller scale for a household. Motivating employees isn’t that different form motivating yourself, or motivating a reluctant spouse to get on board with your financial plan, for example. Becoming a more creative manager isn’t that different from becoming more creative in your cost cutting, budgeting, or deal seeking. If you have an independent streak, studying how to start your own business can pay off.
Even if you’re not actively job seeking, spend some time reading up on what makes an employee valuable, or strategies for asking for a raise or other benefits. Or, read up on the latest interviewing and resume techniques just so you are better prepared if you get laid off.
If you can train your own pets, you won’t have to pay for classes. If you can groom your pet, you won’t have to pay a groomer. If you understand basic animal physiology and can treat/prevent minor illnesses and injuries, you’ll save money at the vet’s office. All of these things can be easily learned from books and websites.
Learning about actual finance is just one step on the journey to controlling and increasing your money. The more you know about the world around you and all the different subjects that are relevant to your money, the better prepared you become to seize opportunities and to recognize (or even start) trends that will affect your money.
(Photo courtesy of Darien Library)