Rational choices in life and personal finance

Spring Clean - Financial Wellness

183:774899227 (Gabor Balint) — Sun, 16 May 2021 16:09:26 GMT

A quick guide to ideas and resources

I don’t know if you have noticed recently how widespread the practice of snap judgements has become, increasingly driven by binary, false choices that divide and pit ideas and people against each other. Why, you might ask, am I saying this in a financial wellness blog? Well, because I almost always take the human being and their decision as a starting point, whatever the situation, and I am worried that applying the same framework to personal decisions with a financial consequence will inevitably lead to bad outcomes.

So, with spring apparently on its way – although it’s difficult to substantiate this as I look out the window and see people walking in their big winter coats still; it’s May for goodness sake, isn’t it? - I think the time has come to a spring-clean talk about how you can find resources to overcome this false and toxic approach and where you can look for help.

First, let’s deal with the future, i.e. young people. Although you could be forgiven for thinking otherwise, it seems more and more young people are prioritising savings and having a longer-term view instead of consumption and spending everything today. This was brilliantly captured in a recent FT article ‘Young people, their money and how all is not lost’ (https://on.ft.com/3xFuwUR) and I am encouraged by that. Life is unpredictable, so being financially prepared is a good idea. If you are young and looking to learn and understand more about money, there is a wealth of free information, and the odd educators like myself, who you can turn to. Some of my favourite places are:

Young Money (https://www.youngmoneyblog.co.uk) and its website, with various blogposts across all sorts of topics relevant to young people, such as savings more towards your first home, dealing with student debt, understanding investment products or the recent craze on crypto-currencies, etc.
For those even younger, still in education or with young children, there are some great materials and supporting resources on the Young Enterprise website (https://www.young-enterprise.org.uk/teachers-hub/financial-education/). Just be brave to explore the Financial Education Tools and Resources, find the age range you are interested in and you can access a large variety of resources as a parent once you registered for free.

Next, let me make a couple of observations for those whose work has sadly been impacted by COVID and face either loss of income or employment. This can be very stressful on its own, so I think it’s all the more important to have a good, rational approach to dealing with the financial consequences. I find the Citizens Advice (‘CA’) website one of the most comprehensive pool of information. Unfortunately, many people don’t really think about the CA, as they perceive its value only in the case of something having gone wrong. In reality, nowadays, when advice is increasingly priced out of reach for a lot of people, the CA offers high quality advice and information on a wide range of topics related to work and money, completely free. All you need to be prepared to do is search, read and learn. Oh, and then act in a considered manner, which is the whole point of this blog. For those who need further help with benefits or money-related problems, there are many, many charities that are happy to help. Some of my favourites are:

https://themoneycharity.org.uk
https://www.moneyadviceservice.org.uk/en
https://www.financialwellnessgroup.co.uk/financial-wellness/
https://www.turn2us.org.uk

And finally, a couple of thoughts for those of you who just want to be well informed and enjoy making conscious decisions about money - surely that’s most of us?! :-) Starting with my previous employer, HSBC, you could do much worse than explore its Financial Fitness page on its website (https://www.hsbc.co.uk/financial-fitness/) or read through first direct’s ‘Money wellness hub’. I find these really informative and thought provoking and, yes, even a bit if fun! Talking of fun, I also like the provocatively named ‘Boring money’ website (https://www.boringmoney.co.uk) or Money Magpie (https://www.moneymagpie.com), both of which are aimed at helping you with most situations where there is a decision with a financial consequence.

Ultimately, I believe you need to develop a positive relationship with money; after all most things in life have a monetary value, so wouldn’t it be good to be more in charge of your finances and money than the other way round? Best of luck and if you need any help, I’m still here - although I might retreat into hibernation until this whole COVID-thing is over and some sort of more reasonable weather arrives.

Financial Lent

183:774899227 (Gabor Balint) — Wed, 17 Feb 2021 15:40:48 GMT

What if the concept of Lent applied to money?

As I was looking for inspiration for my next blog, I was slightly lost until I realised that today, 17Feb2021, marks the first day of Lent. I would imagine most of you would be familiar with the concept, with one of its key aspects being the focus on making a sacrifice, giving up something for 40 days. There, I thought, what if we sort of loosely applied this concept to financial matters? I say loosely, because I don’t want it to be a religious approach or a temporary, 40-day event, but more a realisation that there might just be some financial behaviours that we can change in ourselves and become more apt at managing our relationship with money.

How we see and use money is extremely diverse, differing from person to person and rooted in many different aspects such as age, cultural heritage, parental upbringing, education etc. What I think is uniform though, is that once we reach adulthood we can make our own choices and decisions whether to continue our inherited, ingrained behaviours or if we want to conduct ourselves differently, taking more personal responsibility. This is not necessarily the path of least resistance but I find it is the most rewarding. The beauty of it is that there is no single, ‘cookie cutter’ solution that suits everyone equally but there are general themes people can recognise and take it from there.

So what would be a ‘financial vice’ that might be worth giving up, not just for 40 days but, ideally, much, much longer?

First up, I would put ignorance. Not knowing how money works and, more accurately, not wanting to know, can be very detrimental. If you give it some thought, it is not very complicated: most of us need to work to earn money, things have a price/value, some things are immediately achievable, some are not, there are basic financial categories like budgets, income, spending, saving, investing, insurance. What is constant in your life is that most things will have a monetary value, whether you like it or not. Ignore it if you like but that attitude will certainly come back and hurt you if you do. Giving up ignorance will be a huge positive step in your financial wellbeing.

Next, some negative emotions and attitudes. Shame, guilt or regret, for example. Mixing these with money can be very damaging. Moral values are important, of course, but let’s keep things in perspective: money in itself doesn’t deserve any of these attributes. What you do with money can be perceived in a myriad of ways by others, which you cannot control. What you can control is your own actions and motivations. If you can afford something, there is no shame in enjoying it. If you cannot afford it, there is no guilt, you just have to decide whether this is something you wish you save for or not. Regret is a post-factum emotion, which means that you can avoid it by having a think, making a conscious decision and then sticking to it. It’s easy to fall into these – and countless other – emotional traps about money but just think about it: money is the ultimate expression of rationality (however irrational our actions might be), so wouldn’t it be better to let the head rule the heart over this one?

Lastly, some behaviours, which can change either way, depending on where you are on the spectrum.

Let’s take overspending: you know (in your rational mind, which you overrule with your emotional attachment to the latest shopping item that captures your imagination) that this is not going to end well. The credit card bill arrives, you are overdrawn and your savings are down. You are effectively borrowing from your future self and taking money away from them. Alternatively, you are very, very tight with money, so much so that you have forgotten in the process how to have some fun and treat or reward yourself or your loved ones.

In another example, you might be highly risk-averse, so you hold all sorts of insurance products, constantly worrying about what can (and you think will!!) go wrong and, as a result, have way too much protection and most of these will never pay you a penny. Or you might be overly cautious about the risk of loss of capital and keep your savings in cash…which means you would have received next to nothing in interest over the past years and missed out on long-term investments.

Alternatively, if you are young or are on low income, you might think there is no way you can aspire to anything, so you spend everything you have, focusing on the here and now. You don’t even allow yourself the possibility of change with long-term, constant hard work, meeting someone and partnering up with them or pure luck or inheritance.

My main point is that none of the extremes are particularly useful when managing your relationship with money and you might benefit from giving up or modifying some of these attitudes for Financial Lent. Life is long and it contains a lot of unknowns. It’s better to be prepared through knowledge and conscious decisions. I hear a lot of people saying financial literacy is one of the main things they feel they were never taught either in school or by their parents. It’s never too late. Giving up or changing something about how you see and use money might just be the first step towards it.

New Year, New You

183:774899227 (Gabor Balint) — Tue, 19 Jan 2021 18:09:21 GMT

Three steps to improve your finances - better than New Year resolutions that get left behind.

Well, here we are, we have officially left 2020 behind! Isn’t that great news? Probably for most of us/you, it will be one of those strange years that you will never forget, thanks (????) to a certain virus. But wait, as if things couldn’t get any worse, we have just recently had something called ‘Blue Monday’, apparently the most depressing day of the year, ‘scientifically calculated’ (look it up, you will be surprised). Now, I don’t know about you, but this rings instant alarm bells for me and smacks of the typically unhelpful method of framing something in a misleading way instead of focusing on the real issues. Coming up with a calculation of something that is unmeasurable is fundamentally flawed. It can be a source of fun but nothing else.

How many other, similarly unhelpful frames do you come across or even set for yourself, particularly in the area of financial skills? How many times have you heard people say ‘There’s no point in saving…’ ‘I haven’t got time to switch utilities providers…’ ‘I don’t understand investing…’ ‘I can hardly get by today, what do you mean 5, 10, 20 year targets?’ and so on, and so on.

It’s a new year, let it be a new you. Discard New Year resolutions that you know you will never keep and, instead, try for something that has a positive impact on you. Like sorting out your financial affairs, getting more on top of every penny coming in and going out. Depending on how you weathered the lockdowns, working from home, furlough, losing jobs, investment performance, everyone will be in a different place. Pretending that there is a homogenous response to a change in people’s financial positions is just as equally flawed as claiming you can scientifically calculate when you will be most depressed.

Embrace your individual situation by starting healthy financial habits for 2021. Treat the year as a blank sheet of paper. It’s not as easy as 1,2,3 but close:

No.1, prepare a cold, factual summary of everything you earn, everything you spend, everything you own and everything you owe. For your earnings and, in particular, for your spending, put the entire 12 months of the year. This will help you see the bigger picture and, also, allow you to include not only your recurring, everyday expenses but your ambitions as well, like a holiday, a larger purchase, flat/house repair, etc.

No.2, step back and think. What does your income/expenditure balance look like? Have you got money left-over? Yes/no? Why? Have you got a view on what the balance should be like? If you subscribe to my blogs, I am hoping the answer is a resounding ‘yes’, aiming for constantly saving however little or however much you can afford. Now set up a list of actions. For example, in order to save, ‘pay yourself’ first and put that money aside. Commit to categorising your expenses as mandatory and discretionary. Explore if you can reduce your costs by reviewing your subscriptions/policies, e.g. entertainment, utilities, insurance, memberships, etc. Lastly, prioritise. Make some decisions and stick by them.

No.3, commit to regular reviews of all of the above. I find a quarterly review works for me but then I have done this so many times and so often that I actually have most of it in my head as we go through time and a lot of this comes as second nature. You might find that works for you, too, or you might find that, to begin with, a monthly review suits you better. The ‘trick’ is to stick to regularity. Nothing will re-shape your relationship with money more than a constant, conscious effort to be in charge.

Lastly, and very importantly, this doesn’t have to be boring. It doesn’t have to be like a constant elimination of all discretionary spending either. Money has a purpose, you need to find its purpose for you. Again, it’s 100% individual and specific to you. I like to say that money helps things happen and its absence makes things more difficult. But, in itself, it doesn’t do anything and its value to you is derived from how you use it. Plan some spontaneous spending into your budget and you will find boring and exciting happily co-habitating!

Here’s to a New Year and New You and, to use a discredited phrase, to 'taking back control' of your relationship with money in three steps over the course of 2021. Things can only get better. And, as for Blue Monday, I suggest you stick to New Order’s synth-pop version.

We need to talk...about money

183:774899227 (Gabor Balint) — Wed, 18 Nov 2020 18:26:31 GMT

Getting into the habit of a good chat and passing it on to family

How are you all bearing up in these winter times, complete with lockdown 2.0? I am sure there are lots and lots of conversations going on in your households, after all there have been quite a few ‘biggies’ in the news recently, like the reliably bizarre behaviour of the orange-haired one or the demise of the one who put Barnard Castle on the map for most of us and, most probably, about vaccines and thinking will this ever end?

One of the conversations you might not have had was about money. Although there was a ‘Talk Money Week’ here in the UK between 9-13 November, most people were unaware of this, which is a pity. It is an essential skill but, in my experience, it is still widely ‘missing in action’ for a variety of reasons. Let me explore three major ones and, in the process, perhaps help you overcome any inhibitions you might have about this.

No1: the ostriches. I know this sounds a bit strange in a financial literacy blog, but bear with me. People who wish that things just went away, burying their head (figuratively :-) , of course) and avoiding issues around money. You know this is silly: just because you don’t see something it doesn’t mean it’s not there, we are all more adults than that aren’t we? Ignoring issues today will come back and ‘bite you’ with a vengeance in the future. Money – more accurately in this area – bills, contracts, debts, commitments, etc. will not change in your favour just because you do nothing. Actually, they change for the worse.

No.2: the runners. Well, I am a runner, so I’m all for running…but not in this sense of the word. Running away from your financial commitments is the worst thing you could do. It will set in motion inevitable, dire consequences on your credit file and score, it can take control away from you, you could be unable to access basic banking and financial products and, most importantly, you could lose your home. This should virtually never be a consideration and would have to be the absolutely last resort.

No.3: the blockers. I know it is generally not easy to talk about money. You could feel you are ’under attack’ for ‘doing something wrong’. Blockers just dismiss everything and close down the conversation. The sad thing is that it’s the blockers who suffer from this. They stay less knowledgeable, unable to understand concepts and modify their actions and behaviours. They stay rooted in their problems, probably repeating bad patterns without moving towards solutions.

What do I suggest instead? Don’t bury your head. Don’t be like an ostrich. Don’t run from financial consequences, don’t dismiss other people’s views. Instead, detach your personal pride from these issues and learn. I could quote either Lenin: ‘study, study, study’ or Blair: ‘education, education, education’ and not because I’m their fan but for getting this one right (given everything they did, statistically there had to be at least one thing). There is no limit to learning. I’ve been around for over half a century (now that sounds scary, putting it that way) and still learning. It’s actually good for the brain and mental health. It also helps you develop a habit of learning, understanding and acting with more consideration, which is a really good thing. Particularly when we talk about actions with a financial consequence.

Because talking about money is not really about the money. It’s about attitudes, it’s about value judgements, it’s about priorities, desires, fears, control and responsibility. This is why it’s one of the biggest issues in relationships and families. Most people say they haven’t received the guidance or skills from their parents of schools that they think they would need to handle money-related issues. If this is you, recognise it and address it. Give it a bit of a thought and make a conscious link between your activities, goals and money. See how your activities lead to a financial outcome, how you can modify your them, how you make decisions and how, actually, most of the time you have a choice. Talk about it and pass it on to your family and loved ones. You might be surprised how positive its long-term impact will be for you all. Change your habits and money will follow.

Box: inside, outside? Where are you?

183:774899227 (Gabor Balint) — Wed, 23 Sep 2020 17:01:59 GMT

Why broader perspectives and unconventional thinking might lead to better decisions and financial outcomes

How time flies. It’s nearly the end of the third quarter of 2020, the virus is still enjoying our hospitality – even if our hospitality sector is definitely not enjoying the virus! -, we have passed the equinox and it’s time for that good old tradition every financially literate person follows: drawing up the quarterly figures of the financial position, having an overview of what we own and what we owe and how we could make the most of our situation.

It is in this last respect that the idea of boxes and related thinking and perspectives has struck me. It is far too easy to accept that ‘this is how things are or have been’, 'we have always done this one way or another' and, in the process, become blind-sided to other ways and perspectives that might actually offer better outcomes for us. Specifically, on this occasion, I would like to focus on maximising income from savings, as that is generally a very good idea but, under the current circumstances, the combined effect of economic uncertainty and historically low savings rates make it even more paramount that we think before we sheepishly follow the path of the past.

Making an effort in reviewing and deciding where to put savings and whether to fix them - and for how long - has a lot of value beyond the obvious advantage that you would most likely place your savings with the provider that offers a rate at or near the top of comparison tables. The major benefit is that you are making a conscious decision. This decision would take into consideration your future needs and ability to lock-away some of your money for some time. Just going through this mentally, you are mapping out your life, your expected income and costs and deciding what you can put away in a savings pot. This is a highly positive act, as it makes you think about ‘must haves’ and ‘nice to haves’. You are also becoming purposeful in saving for a reason or occasion and, finally, you could see it as rewarding your future self by putting money by for them.

If you have some savings already and these are fixed for a term, say a year, then you would be receiving an offer from your provider near the maturity date, showing you what they offer if you were to roll over your funds. I have had one these recently and - even though I am fully aware of the current rates - I was really shocked to see just how low the rate was. As it was a Cash ISA account (UK readers should be familiar with this; to my global audience I apologise for the jargon, just get in touch and I can explain:-)), my initial thought was: ‘Well, it’s a tax-efficient way of saving, it has been this way for quite a while, so what can I do but a Gallic shrug of the shoulders and humbly accept my low-rate fate.’

On second thoughts, however, and having found my way out of the box, I was wondering whether there was another way of looking at this. You won’t be surprised that there was. Important though the Cash ISA treatment is, it’s only one aspect of a complex set of rules that our beloved government keeps changing. As the topic of tax, finance and allowances either elicit a big yawn or strike fear into ordinary humans, not everyone is following these rules, let alone think about how they could benefit from them (if you are one of these people, this is where you get in touch and ask me to bore, sorry, help you with this). The fact is that the UK has introduced a variety of allowances regarding tax on interest income, you can check it for yourself here:

https://www.gov.uk/apply-tax-free-interest-on-savings

Assuming people pay taxes – as I do – I shall focus on the effect of the Personal Savings Allowance. For basic rate taxpayers, this allows the tax-free receipt of £1,000 per year and for higher rate taxpayers £500. Now, you don’t have to be a genius, only a little bit curious and unconventional in your thinking to wonder, what does £1,000 in interest income represent in the current environment? Well, assuming 1% interest on a savings account – which is achievable but not always without shopping around – you would need £100,000 in your savings. That is a lot of money and, because you are financially literate, you also know that you shouldn’t open such an account, as it takes you over the Financial Services Compensation Scheme limit of £85,000 that protects your deposits, so you would need to split your accounts between providers.

The main point, however, for anyone with Cash ISA accounts and less than £100,000 in savings, is that the comparison table should include not only Cash ISA but, also, non-ISA accounts, because the Personal Allowance provides the same tax benefits as an ISA. Furthermore, even if you were receiving interest income above £1,000 per year and we assume you are a basic rate taxpayer, it still makes more sense to opt for a non-ISA savings account if it offers more than 20 percentage point higher rates, e.g. a non-ISA 1yr fixed rate at 1.2% will provide a better financial outcome even after taxes than any Cash ISA 1yr fixed up to 1%.

It’s good to be free of the box sometimes, particularly if there is a financial benefit. Perspectives and broader considerations can reveal previously un-thought-of directions. Find your own and don’t be afraid to question some fundamentals from time-to-time.

Save, save, save me... asks your future self

183:774899227 (Gabor Balint) — Wed, 08 Jul 2020 10:43:17 GMT

Save and your future self (and your wallet) will thank you, not to mention your mental health

Life is good. The (apparently) most important barometer of British life, THE PUB, is allowed to be open again. Even those non-essential things you don’t need are available to buy not only through AMAZON, a.k.a. Another-Market-Added to-Zombie-Online-Networks but, also, at those dying breeds of ordinary shops. Remember them? This is where you can actually talk to a human being and receive good customer service that might just make you think about the consequences of the convenience of next-day-delivery and its impact on the world’s resources and the way people work.

There is virtually no segment of British society or economy that would not have received unthinkable financial support from the Chancellor. Markets that fell sharply have recovered, making those who were brave to do nothing during the turbulence look wise. People are going back to work, hoping that consumer demand returns and redundancies – though inevitable to some degree – will be either limited and/or temporary. It would seem a good time, then, to relax and loosen the purse strings a little and take a ‘well deserved’ break, splash out and do ‘your bit’ for the economy.

Well, I beg to differ. On behalf of the content of your wallet and your future self, I would urge you to re-consider. I think now is prime time to save, save, save, if you can. Let me explain: this is not as contrarian as you might think on first inspection. According to the Office of National Statistics, in March/April/May there has been a strong increase in savings by UK households despite virtually non-existent savings account rates and most of the economic activity of the country being on hold. Clearly, there can be many reasons to save but ask yourself: do you really need something that you could do without for the past nearly 4 months? I am not advocating asceticism or talking about those who are in genuine financial dire straits. I am talking about the vast majority of UK households that went into this virus crisis on the back of record employment and have found that, whether with or without the Chancellor’s support programmes, they could reduce their consumption and still live a pretty good life. And therein lies an opportunity.

In a consumer society it is easy to forget the habit of savings when virtually everything and anything is available on credit. Life is good, money is easy. Until it isn’t. And the worst bit about that is that you don’t know when things suddenly strike. Like this virus and the subsequent lock-down and virtual freeze on entire economies. Didn’t this whole thing shake things up to the core? Isn’t it time to try to look at things differently, starting with your own outlook and habits? Re-evaluate spending and saving? Surely one of the lasting – rational – legacies should be that we need to be more prepared for the unexpected.

So I am slightly encouraged when people ask me about what level of savings they should have, e.g. 3 months’, six months' worth or more, but this is the wrong question, really. It’s impossible to tell in advance what you will need in a future crisis, so don’t be bound by your own arbitrary target. Instead, rediscover the pleasure of saving money every single time you can. Again, I am not advocating extreme frugality, just a simple rational thought process around your habits. Think of it as spending money on your future, if you like. The opportunities are endless. Realise the difference between what you need and what's nice to have. Be critical of waste of anything: food, energy, clothes, packaging, endless upgrades of consumer goods before they reach the end of their life.

Every time you stop a little bit of waste you save money and e verything you save today will help you tomorrow. You go through jobs and life and unless you have been very unlucky or very irresponsible, you progress and carry on. Once you are able to make ends meet, see all future increases in your income as a bonus, something you could do without and save a portion of it. Depending on your personality, make charts, have a jar, reward yourself, use an app, ask a family member, be inventive, be boring; there is no right or wrong way of giving money to your future self and thereby improving your financial position.

Make savings a habit and you will soon sail past those arbitrary targets and won’t look back, feeling less anxious and more sanguine about the future. We need to move the conversation on from sheer numbers and focus it on attitudes and habits. The numbers will take care of themselves and you will find that your future self will thank you when the next unexpected happens.

Solving money problems

183:774899227 (Gabor Balint) — Wed, 17 Jun 2020 18:16:27 GMT

Where to find your inspiration and strength to avoid false choices

I don’t know if you have noticed recently how widespread the practice of snap judgement has become, increasingly driven by binary, false choices that divide and pit ideas and people against each other. Why, you might ask, am I saying this in a financial literacy blog? Well, because I almost always take the human being and their decision as a starting point, whatever the situation, and I am worried that applying the same framework to personal decisions with a financial consequence will inevitably lead to bad outcomes.

So, I think the time has come to talk about how you can find strength to overcome this false and toxic approach, what you can do to avoid it and where you can look for help. I have found some inspiration in an unusual place: the BBC World Service series ‘13 Minutes to the Moon’, the story of Apollo 13, marking its 50th anniversary earlier this year. This is actually my first suggestion: look for and find inspiration in unexpected places. The main characteristics and driving forces behind our decisions are pretty constant, regardless whether the issue to solve is a space mission gone wrong or a personal finance decision.

Secondly, be prepared. Things go wrong in life, that’s one constant. There are many, many things outside your control. If, however, you recognise these, you can actually start to think about how you would respond if something went wrong. Let’s say you work in finance, like I did. You know this is a highly competitive industry, as it probably took you quite an effort to get into it. My early conclusion in the late 90-ies was that no-one is indispensable and everyone is replaceable. I was always prepared, therefore, to lose my job and this, in turn, has played a role in my attitude to make preparations for this both mentally and financially. The same applies to virtually every job. Taking things for granted will lead you to a false sense of security. Instead, entering things with - as they say - ‘your eyes open’ enables you to be prepared for various eventualities.

Next, plan, and try to keep to it to the extent possible, whilst also retaining some flexibility. Many of you might prefer the less structured and more impulsive approach but, again, if you see plan v. impulsive as a binary choice, you are sucked into a false choice. What you do in life and what happens to you in life is virtually never binary, despite the ability of Artificial Intelligence programmers and algorithm writers to distil it into ones and zeros/yeses and nos. You might be surprised to learn that plan and impulse can actually happy co-exist; one doesn’t have to be to the detriment of the other. You might just have times and activities that call for a plan and times and activities that call for more impulse. Like people working on rescuing Apollo 13, you need to be able to go to the right place for the right information and be able to apply the right attitude.

What has really inspired me on Apollo 13 was that Aquarius, the landing module, actually became a ‘life-boat’ instead until the crew managed to solve the problem and move back into their command module. This meant that they were able to utilise something that originally was designed to perform a completely different role and re-purpose it for their new situation. How often do we face similar –admittedly less life and death – situations, when suddenly we have an external development that seems to blow us off course entirely? Here is the opportunity to be brave and find your strengths inside yourself: instead of immediately responding and taking reckless action, pause for a second and take stock of what you have. You will be surprised at the depth and richness of your experience and resources even if at first glance or originally they were for different purposes.

Lastly, make good use of people around you who can help. Apollo 13 would not have been able to make it back without enormous team work. Luckily, you don’t need a rocket scientist to help you with personal decisions and financial matters. Your strength comes from two sources: your readiness or openness to ask and your ability and willingness to evaluate responses. Don’t be afraid to learn about financial products and money, get some tuition that’s personalised to you. It’s pretty cheap and will be the best money you ever spend in the long-run, helping you understand how take better, conscious decisions, how to find resources and information and how to manage your relationship with money. Probably, you will also be surprised at the perspectives people in your circle of friends and family can offer. They will be happy to be asked and pleased at being able to help you crystallise your thoughts. I am not saying ‘the crowd always gets it right’, far from it, particularly if we believe that ‘the crowd’ equals loud people saying binary, simplistic things. No, what mean is that I am convinced that it’s better if you collect views and thoughts, work through the complexity and marshal your rational and emotional strength consciously towards decision making. Heaven forbid, for us Brits, this might even lead to being able to start talking about money matters as comfortably as we talk about the weather.

Reasons to be cheerful

183:774899227 (Gabor Balint) — Mon, 08 Jun 2020 10:53:15 GMT

An acknowledgement of the power of relativity and emotions

Don’t worry, I didn’t suddenly abandon the realm of finance and de-camp to science. Mind you, given how much ‘being guided by science’ became the vogue recently for those wanting to avoid a personal decision (particularly for politicians), it would not be unreasonable for me to find it irresistible to talk about Einstein. So, slightly hijacking that theory of relativity, let’s move on to financial literacy and perception of relative values.

I have to admit, upfront, that I tend to underplay the relative, comparative positioning of personal finance decisions and favour a ‘this is the right thing to do’ decision regardless of peer pressure or relative values. This is probably because I still haven’t been able to lose all of that ideological, naïve approach that seeps into your psyche over the first 20+ years when growing up in a place where there is a single, state-directed source of truth on everything and you are required to follow it. I would like to think, though, that I have made good use of the next 30 years in Western Europe, absorbing its more liberal, pluralistic and individual approach, developing an understanding that emotions and relative values are often integral components of decisions that are made in a variety of ways.

I was reminded of this in two extreme examples. One was someone who, having previously squandered quite a lot of money and was now at the mercy of the state, spoke with a bit of schadenfreude about people who were losing money in the COVID-19 induced market turbulence and job furloughs and was looking forward to governments introducing punitive taxes on those who were still relatively well-off. It seemed they had a perspective of ‘well, I am down, so I will take pleasure in your fall’. I found this quite upsetting in my ‘right thing to do’ mode but then realised that there is another perspective: the relative view. You see, from that perspective, the picture is entirely different: to lose money and be on furlough or pay more taxes is certainly not something most of us would voluntarily choose. Nevertheless, relatively speaking, if you retain part of what you had before, still get paid in your job, are not at the mercy of someone else’s handouts and can afford to pay the new taxes, whatever they may be, you are a million times better off than the bitter person wishing your downfall. You still have something. They still have nothing. The relative view literally couldn’t be better.

Losing some of the whole is painful, yes, but what’s left is still more than nothing and the relative perspective amplifies the spotlight on all the decisions you and the other person took to get to your respective positions. In this situation, faced with someone taking pleasure in your fall you can allow yourself a smidgen of that other unattractive attitude: smugness. The knowledge that your longer-term, consistent personal decisions have led you to a place where you can weather the storm, emerge - though not unscathed - still in a relatively good place, is a first class advert for relativism and for allowing your emotions a dance to your happy song.

The other light-bulb moment came to me as I was reading about ancient Greek philosophy, Epicurus and, also, the early establishment of Stoicism. The combination of key elements of these two offers plenty of reasons to be cheerful and provides a perfect counterpoint to the greedy, resentful version of relativity when considering our relationship with money. Combining the teachings of Epicurus with the stoic idea of virtue leads us to focus on our emotional experiences alongside our capacity for reason. Being aware of how things make us feel also allows us to replace negative emotions with positive ones, develop a balance of our desires, recognise contentment, find purpose in our actions and focus on doing things well.

Recognising how to take the relative perspective that makes you feel least anxious and most content is a step towards a better decision. This type of conscious relativity will enhance your confidence and strengthen the link between your emotions, reasons, causes and outcomes. It will also enable you to disregard the perspective that leads to toxic personal decisions with detrimental financial consequences. And that is one great reason to be cheerful, happy and financially literate.

The 'Triple A' of Financial Literacy

183:774899227 (Gabor Balint) — Mon, 01 Jun 2020 13:25:32 GMT

What exactly do I mean when I talk about Financial Literacy? Well, very often, it is you and your decesions.

As you know, I usually try to relate my blogs to some events, interactions or experiences. So it was a bit of a blessing in disguise to observe an argument recently where it seems the only constant was how two things got conflated: the actual facts of the matter and moral judgements made about them. This made it impossible to have a rational conversation about the issues in a way that recognises complexity (if you read my previous blogs you know how I generally don’t believe things can be distilled into simplistic explanations) and allows for reality to be observed, even if it’s flawed and seemingly offering contradictory indications. In addition, Mrs B mentioned after reading some of my blogs that, good though they are, I still have not actually said what financial literacy is?!?! So it seems this is the perfect time to introduce my take on these things, if only to avoid anyone conflating anything on this topic in the future :-)

For those clamouring after a simplistic definition and a small number of characters, I can grudgingly provide my definition that I consider financial literacy the display of certain ‘Awareness’, ‘Attitudes’ and ‘Application of skills and knowledge’ when it comes to personal decisions that have a monetary consequence. This is my ‘Triple A’, liberally borrowed from major credit rating agencies. Depending on whether you look for explanations primarily outside or inside yourself when things happen, you might find this either impenetrable tosh or empowering confirmation that you actually have a lot of opportunity and control over the financial outcomes you encounter throughout your life. Let me take my Triple As in order.

In terms of awareness, my point is that it’s best to acknowledge that life and things around us are not perfect and we can - and have the ability to - decide to act in a variety of ways. We carry certain behaviours and traits that we inherited from our parents both genetically and through upbringing. When we become adults, being aware of our heritage, how and what we do and how we choose to engage with the world is the same whether we deal with work, friends, family and anything resulting in a financial impact. You could be on a wide spectrum of awareness and your behaviour may vary from time to time. But if you are able to have a conscious view of what and why you are doing and are able to raise your gaze beyond the immediate, you develop your awareness in a way that will help you make better decisions. These, in turn, will have a positive impact on accepting money for what it is: the outcome of your personal choices, something that you control as opposed to the other way round.

When it comes to attitudes, this should be simpler to explain and understand. You instinctively know the right attitude, partially through your upbringing, partially through the framework of law and partially through your desire to make your life better. Let me illustrate this with a short example and I can guarantee most of you will immediately understand the right attitudes. Suppose there were two people, starting out a career, pretty even at the outset in terms of their (lack of) wealth. Both go into well-paid finance jobs and you re-visit them after a good, long stint of c. 25 years to see where they ended up. One of them has several homes, investments, virtually no debt, a family still intact. The other has no penny to their name, several failed relationships and ventures, living with a friend who has kindly taken them in. One of these people had a long-term plan for life, made sure they always tried to save whatever their level of income was, made considered decisions on borrowing for the right things at the right time, lived and enjoyed life within their means and bent over backwards to avoid catastrophes that inevitably arise over such a long-period, such as divorce, excess consumption compensating for the long hours, spending on vanity items, taking disproportionate risks and giving into peer pressure. It might be redundant to state what the other person has done (or not done) over the same time period – you see what I mean when I talk about attitudes?

Finally, the easiest one in my view: the application of skill and knowledge, i.e. the practical aspects of budgeting, savings, spending, borrowing, understanding financial products, risks and the underlying maths. This is often presented as either financial literacy itself or what financial literacy is based on. I couldn’t disagree more. Important and essential though they are, without someone displaying the right awareness and attitudes, see what happens; I outlined it in my example in the previous paragraph. Financial literacy is based a lot more on awareness and attitudes than it is on the application of skills and knowledge. Sadly and surprisingly, it is often the case that people with high levels of skill and knowledge make some of the most disastrous decisions because they have the wrong attitudes or are simply unaware of reality and substitute it with their own often moral projection of how they think it should be. Never a good recipe for any decision, let alone one with financial consequences.

So there we are, somewhat longer than usual – and I thank you for reading if you made it so far – but there is no ‘cookie-cutter’ answer to what financial literacy is. You need to develop yours and my observation is that the more of this ‘Triple A’ you display, the better your decisions and the more financially literate you are. It is the framework and the process that enables you to develop a healthy relationship with money. Let’s leave the cookie cutter to its intended purpose of dishing out some delicious dessert. In a strictly proportionate manner amongst you, of course, applying skills and knowledge :-)

The March of the Robots and Knee-jerk Reactions

183:774899227 (Gabor Balint) — Mon, 25 May 2020 11:39:37 GMT

Why you should develop and trust your own judgements on financial matters

As we slowly emerge from these unprecedented times into the new unprecedented times, it has been fascinating to observe people’s reactions both IRL - in real life; just trying to demonstrate some media savviness, with limited success :-) - and in what I can’t even call the wild west of social media, as that would be an unkind comparison. To the Wild West. Quick trigger warning: I am not that old man yet who is lambasting the entire internet and its social and anti-social networks; I am just observing that it is so diverse, structure-less, self-righteous and unaccountable that everything and anything, and its opposite, can appear convincing, appealing, true, majority-view, off-putting, misleading, false and minority-view all at the same time.

So when it comes to personal finance, this is highly unhelpful. Sure, you can find all sorts of practical spending, savings, investment, insurance, etc. tips, often with vouchers and limited time offers and emotive presentation galore. You can also find apps, technological tools, automated spreadsheets, calculators, projections, aiding the march of the robots. Have you ever stopped to think what impact these have on your ability to make financial decisions and develop a healthy relationship with money?

Following the first strand of very practical offers and money saving tips, etc. can certainly be useful to you. If you stepped back from this pattern, however, you would see that this is purely a transactional attitude that deals with the here and now and is addressing an immediate need or whim. That’s OK, if that’s what you want to do but that is not what I call financial literacy, to be honest. I have spent an awful long time in finance in three different countries observing this attitude. Most aptly described as ‘knee-jerk’, it hardly ever leads to anything sustainable in the long run – whether financial or life decisions. What it does is it removes – or at least it makes you think it removes – the responsibility for proper consideration. Now, if you read my previous blogs, you know where I stand on that.

The second strand is quite interesting. A lot of these personal finance tools are pretty cool and appear sophisticated. They also make you feel cleverer and financially savvy, which you might think is a good thing. After all, Artificial Intelligence is one of the big things at the moment and is highly likely to stay, so you may as well be among the early adopters and gain what business schools call ‘first mover advantage’ and get ahead of your peers. Well, maybe but, again, a little bit of consideration might not go amiss. In all this talk about the rise of AI and the march of the robots, have you considered who is behaving in a robotic way? Sorry to disappoint you but, yes, it’s you. By using these tools what you are doing is outsourcing your own intellectual thought process to someone else and you trust them blindly, as all you are doing is following simple algorithmic steps. I am not saying they are not useful; I am just saying that, yet again, the use of these tools camouflages your lack of understanding of what actually is going on and, therefore, instead of developing your own financial literacy skills, you are developing a dependency on someone else’s.

These things, like a lot of things in life, are complex and don’t easily translate into a social media post or 140 characters. If you are still reading this and are with me here, towards the end, I salute you and have every faith in your ability to exercise your gift of independent mind, judgement and skills. You will be much better for it and, in the long-run, you will beat any perceived ‘first mover advantage’ or any AI. After all, we are not yet at a time when the robots can build our relationships with something that is ever changing throughout our lives. Although there might already be an app for that…

Abandon All Hope! You are in a losing battle when it comes to money.

183:774899227 (Gabor Balint) — Thu, 14 May 2020 19:50:48 GMT

Why you should not always believe headlines and titles

Did I get your attention? If so, I have been able to put my recent engagement with the outside world to good use: you see I watched two pieces of broadcasting over the past few days where the headline and blustery content had virtually nothing to do with the actual information/thoughts/message that gave rise to the appearances. The first, since you asked, was Boris’s ill-timed and ill-delivered message about the next phase in the UK’s efforts to control COVID-19; having read the actual plan behind it, you could be forgiven for thinking that our PM either did not read the document or only took away a single item from it. The other was an ‘entertaining’ trip down memory lane with Noam Chomsky, as he spoke for an hour at the Cambridge Union Online but not about the advertised topic but his armchair socialist views and re-hashed Marxism which, for someone like me who has actually experienced the real experiment in Moscow for nearly six years just as the system collapsed, was quite ironic, naive and ill-informed.

But! But! Both of them attracted huge audiences and, given that I am neither the PM nor a world famous academic, this leaves me with the conclusion that - in order to attract attention - I need to create the craziest of headlines. Then, because I want this blog to be more useful than Boris’s and Noam’s briefings, I can actually tell you something that is informative and relevant to your life. So, on to money and your attitudes.

First up, the main message: no-one is out to get you, least of all money, you should not abandon hope and, instead, you should feel confident that you have every opportunity and tool in your head to manage your relationship with money. It has been very interesting to watch how some authors, organisations, media (social and anti-social) frame this: far too often as ‘Your Money or Your Life’ or ‘Would You Rather Have More Time Or More Money?’ or the endless tips for 'managing money'. Blimey, this makes it sound like there is an almighty conflict underway and this money beast needs careful management otherwise it will do something unpleasant to you and me.

Well, nothing could be farther from the truth, actually. I have to refer back to one of my earlier blogs and Daniel Kahneman’s work on studying how we make decisions. Positioning money like this constant struggle is a typical trick of the brain finding an easier substitute and making a snap judgement. It is also very helpful for those who want to appeal to your simplifying mind to scare you into a reaction to buy their book. The good news is that you and your brain are better than this and fully well capable of making a more fruitful effort to recognise money for what it is and how to deal with it.

The concept of financial literacy doesn’t have to strike fear into people and conjure up unhelpful and misleading framing and negative emotions any more than the general concept of literacy: after all, we all managed to learn to read and write and enjoy poetry, novels, books, personal expression, etc. Money is not different and if you were capable of reading great writers and poets, you would be equally able to master the skills of appreciating money for what it is: an outcome of your decisions and actions and, also, the facilitator of possibilities.

Money in itself doesn’t need to be managed. It will not take anything from you and it will not force you into false choices. The one who does that is you. Money is an outcome of your attitudes and decisions. We live in a society where an awful lot of things we do have some link to money – most often expressed as price – but you only pay or receive that price if you make a decision to proceed. It’s what you do with your own actions that determines a monetary outcome. There is a very simple way of increasing your financial literacy: looking into that mirror more often and asking yourself why and what you want to do and what the financial impact of your decision would be. This will work like a treat for most of you – apologies to the vampires, I am still working on an alternative solution for them :-)

So go ahead and look in that mirror, stop for a moment and allow your brain to catch up and make a better informed decision. I guarantee you will soon cease to see money as a fancy beast that needs careful management and, instead, dealing with it will become just as ordinary as deciding whether to wear a coat on an unseasonably cold day in May or not. And, as always, if you need any help with this, you know where to find me.

In Search of Silver Linings

183:774899227 (Gabor Balint) — Thu, 07 May 2020 16:47:26 GMT

Could something good emerge from this lock-down?

It is always nice for a financial literacy person like me to find that his personal experience and perception of reality is mirrored by no other than the Bank of England - pretty good company, if I may say so myself. You see, I was beginning to wonder about the economic impact of the UK's efforts against COVID-19 not just on the overall economy but, more importantly, its component parts...like me and my household. So yesterday I decided to re-visit my quarterly financial review - the activity that all you financially literate people conduct, I am sure, on a regular basis to look at your income, expenditure, assets and liabilities, so that you have a good handle on your on financial position - to see what has happened to the Balint household since the UK Government decided that for my name-day (yes, that exists in my culture) it would give me the present of an open-ended lock-down.

Looking through the expenditure in particular, I was quite pleasantly surprised that whilst the monthly comparison periods for January and February were pretty constant, the first month of lockdown -i.e. 24Mar to 23Apr 2020 - shows a 19% reduction in overall, daily routine expenditure and the period since 24Apr to 06May2020, points to another 18% down. Continuing with this trend to 23May2020 would put our household spending on course to be 28% below the monthly figure ending 23March2020. Whilst I believe it is a very good discipline to save money, imagine my additional joy, when I read this morning the Bank of England's Monetary Policy Report May 2020, specifically that payments data point to a reduction in the level of household consumption of around 30%, thereby making my experience pretty typical.

Now, I know these are extraordinary circumstances and you know - if you read my blogs - that I am the first person to warn against a single factor evaluation. It is, however, quite an interesting piece of information, I think, on how adaptable we are and how we can actually continue to live OK on less money than we are used to. A cursory look over the expense items reveals that the main component parts of this reduction are in the discretionary items, the incidental, opportunistic spends here and there whilst out and about, the more frequent and less purposeful food shopping, lunch at work, petrol, etc. Now, you know I am not saying you should retreat into asceticism, but, instead, asking whether there is an opportunity here that is just too good to be missed to review spending habits and overall attitudes.

One of the other most interesting pieces of news I heard today related to how the UK Government's Cycle to Work Scheme is currently seeing a huge increase in applications, bicycle shops in the UK are selling more bikes faster than ever before and the Italian city of Milan is planning to turn 35km of streets over to cyclists and pedestrians. I rejoice for several reasons: it is clearly a good financial decision for you to take up the Cycle to Work scheme; as a previous cycle-commuter, I can endorse it for health and environmental reasons (as long as both cyclists and car drivers carry on the newly found courtesy during lock-down); but most importantly for the larger implication of positive change: my search for a silver lining.

You see, a highly intelligent friend of mine observed recently that in his multilateral organisation the overwhelming focus is on coming up with various economic models, financial packages, aid, loans, etc. to go back to essentially what was there before...We are not so sure that would lead to the best solution. There is, indeed, an opportunity to go back but not to what was there before but to first principles, to modify attitudes to consumption and to find better ways that are more human-oriented than throwing money at the problem and, therefore, have a higher chance of being sustainable and useful. There might just be a silver lining in all this. Consuming less and living well but differently are not mutually exclusive with a thriving and successful economy; we just must be smarter about it. If there is one thing I am certain of, it's that we have enough smart people to figure it out. You can start with your own review and contemplation and by making a small adjustment that makes you feel better about the world. And if you need any help with this, you know where to find me.

Decisions, decisions... no easy way to say this

Thu, 30 Apr 2020 16:36:25 GMT

Money is involved, so it's simple, isn't it?

I have recently been lucky enough to be asked to be involved in someone's decision making process regarding some serious life choices where it seemed both quite straightforward and confusing to arrive at a conclusion, even though the financial costs and benefits were as clear and simple as you would ever want them to be. How can this be, you might wonder? Well, let me take you on a short mental journey.

Assume you have three choices that you have applied for and all three come back with a positive answer but one of them offers the best financial advantage. The first, immediate response would be to say: well there you are, the choice has been made for you by the purity of the finances. After all, if there is one certainty in life (apart from death and taxes to quote Benjamin Franklin or Daniel Defoe from the well reliable Wikipedia; don't judge me, I am not a historian, just a finance guy), it is that virtually every aspect of your life is somehow related to money and, assuming that the presence of money generally improves things, how could you turn down the best financial outcome?

I am glad you asked. Don't know if you are familiar with Daniel Kahnemann's work - and I don't only mean being marginally aware of his Nobel winning name but having actually read his stuff - and, in particular how people make decisions. If you haven't already, I suggest you buy a copy of his book 'Thinking, Fast and Slow' and give yourself time to digest it. In our household, I have to admit it lives on my bedside table, offering competition to Mrs B at bedtime...yes, I know, unfair competition, but who said life was fair?!?!?

What I mean to say is that there is a lot of potential downside to making snap decisions and, in particular, single dimension evaluations, ones that offer short term advantage. After all you are expecting to be around for quite a long time still after your decision, aren't you? So, wouldn't it be better to take a step back and start to make a mental effort to consider broader issues that will have a long-term impact on your life? In virtually every situation you are faced with, you have a choice. You are also blessed (OK, some time you feel like it's a curse) with a brain that, if you ask it nicely, is able to consider a lot more than the immediately obvious. In fact, it will thank you for doing this and if I could invoke a famous beer commercial, it probably guarantees a better decision (answers on a postcard, please).

So, make that effort, explore the previously unthought-of aspects of a dilemma or choice, find its component parts, what it actually would be to take one route or another, what the longer-term impacts are and where it leads you, set-up a multi-factor framework and then make a well-considered decision where money is just one component. After all, you want to be in control of money, not the other way around. I know you can do it and I also know - and can tell you from experience - that it leads to much better decisions and, in turn, much better life. You can do it. And if you can't, get in touch and I would be happy to help you - just to sign off on a long-term advertising campaign! :-)

Inflation in the time of COVID19 (with a nod to Gabriel Garcia Marquez)

Thu, 23 Apr 2020 15:47:59 GMT

Why you might be better off than you think

It was one of those seminal books that everyone was talking about (if you haven't guessed it yet: Love in the Time of Cholera) when I was young - admittedly, a long time ago - and you were supposed to be in awe and full of appreciation. I have to admit that I didn't really make my way through it, as it just did not click with me. As most people in similar situations, I did go and see a play version and that was OK. What I did not imagine was that many years later I might attempt a tenuous link for an introduction to a financial literacy blog :-)

You see, one of the main characters is supposed to have gone through over 600 affairs in his life before getting back to his first love. Somehow this piece of information entered my mind when reading about the UK government's latest inflation report. Don't judge me prematurely, I know many of you might not find that a riveting topic but this blog might still turn into a worthwhile read yet. You see, I don't know whether you are aware how many items make up the inflation basket? Have a guess. I already gave you a clue. Yes, it is nearly 600! Admittedly, it's only 537, but allow me a bit of poetic licence - there's that G G Marquez reference again. Check it out for yourself:

https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceinflationbasketofgoodsandservices

Now, why would this matter to you? Well, the list provides a long list of entertainment, particularly if you believe that it is relevant to your life choices. You see, inflation is a widely talked about indicator and used in a variety of calculations but unless you regularly buy all 537 items , it means very little to each and every one of us. I use it, instead, to see just how much better off I am than the statistical version of me. Picking out just some of the everyday items that I am sure everyone always buys, I can happily proclaim that I am not a regular purchaser of marriage licences or dating agency fees. The last time I looked, I was not in a residential care home or paying home care assistant and domestic cleaner fees, although Mrs B and my son might have other views or secret desires on this from time to time.

I know that there was a recent election for the leader of the Labour Party, so those paying the Trade Union fees probably feel vindicated and very good about themselves but, full disclosure here, that does not include me. Instead, I think I can congratulate myself on having belief in the good old British weather which, just for the lock-down, has been gloriously nice and sunny, justifying my decision not to stock up on self-tanning products. And as for the manicure, face cream, perfume, mascara, liquid foundation, lip gloss, nail varnish, body moisturising lotion, the less said, the better :-)

So, there we are, have a good look at your household expenditure and, in these strange times, realise how much better off you are by actually not buying that cafe latte (yes, it's in the inflation basket!) two or three times a day and, with your gym membership, hairdressing and take-aways suspended, you are well on the way to saving quite a bit of money and demonstrating financial literacy. I am proud of you. Now, I have to say good-bye, as I urgently need to find some essential every-day items from the basket, such as kerosene, door handles, caravans and pay the livery charges - whatever that might be :-)

Where have all the reasonable ones gone?

Thu, 16 Apr 2020 11:41:21 GMT

In search of rationality

I assume that there are very few people who could avoid the endless, wall-to-wall covering of this infamous COVID-19. One of those is a friend of mine, who has been partially successful in retaining their sanity by only reading the news for maximum one hour a day and definitely not before bedtime. Now that is laudable but my wider experience is that there are many more who don't have this amount self-control and, in a rational world, why should they?

'Rational world', huh, I hear you say, what is that? We are waaaaaay past that one! If you had any doubts about that previously, surely the current situation would be more than enough to convince you. Well, yes, I guess, somehow that seems to be the case. But, really, does it have to be this way? Have you ever wondered what would happen to the news - and your mental health - if you and others were able to apply some fundamental concepts borrowed from financial literacy?

Let's play a thought-experiment. You know how you choose 'x' when you want to solve an equation and there is an unknown? Well, most of you will, others, just bear with me. This is what you want to know, what you are looking for, what will determine the outcome, what will be your solution. Now, let's use this concept to the overwhelming majority of the coronavirus news: articles on major news websites, statistics, questions from reporters, etc.

It seems the 'x', the thing most people want to know - or maybe just what people think grabs the most attention - is the number of deaths, the damage, the suffering, etc. How macabre is that? Is that really that 'solves this equation'? And - here is another concept - is that really representative of the whole? Just how would a rational analysis of any financial or other situation stand up if one component part were to be so overbearing that all other parts were to be ignored or, even worse, suppressed.

And (sorry goddess of literacy, I know we don't start a sentence with 'and' but indulge me for effect) before I get accused and skewered for being insensitive to all those suffering from this nasty virus, let me just roll out the final financial literacy concept: balancing things out. My plea is to keep both sides of the hypothetical equation in mind: give the attention grabbing figures and negative impacts by all means but, at the same time place it into perspective of the overwhelming majority who survive or are not impacted and the herculean efforts of - again - the majority who are trying to minimise the economic damage.

I know you are all out there, the reasonable and rational ones. Until the voice of reason returns, just keep calm and carry on demystifying the world through a little bit of financial literacy. :-)