Building Financial Empathy

Financial empathy can be used in lots of other ways.

For instance, I’ve noticed that people have a tendency to think that because they do something a certain way, everybody else can (and should) do it that way too. If their path to Financial Independence includes working three jobs, they think everyone should work three jobs. If they’ve elected to cut costs by living without a car, they think everbody should live without a car. And so on. When people don’t do the same things they do, they judge them harshly.

I don’t like this attitude. It demonstrates a fundamental lack of financial empathy.

I’m not saying that you should condone frivolous spending from family and friends, or that you shouldn’t share (and advocate for) the methods that have helped you achieve financial success. But don’t fall into the trap of thinking that yours is the only way — and don’t let yourself think of others as “stupid” or “weak” when they make mistakes.

When I started Get Rich Slowly, my motto was: “Do what works for you.” By this I meant that there was no one right way to dig out of debt, buy a house, or fund retirement. Some strategies might be more effective than others, but that doesn’t make them “right”. (Dave Ramsey’s version of the debt snowball is fine example. Not optimal from a mathematical perspective, but often the best choice from a psychological point of view.)

Similarly, no two people will pursue financial freedom in an identical fashion. My path to Financial Independence involved writing millions of words about money while purging half of my possessions. I’ll bet your path has been completely different.

The bottom line? We’d all do well to heed the words of Atticus Finch: “You never really understand a person until you consider things from his point of view…until you climb into his skin and walk around in it.” Rather than rush to judgment, take time to consider things from other people’s perspectives — financially and otherwise. Doing so will not only help you better understand your friends and family, but will also help you better understand yourself.

Written by Trevor Davis

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