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The Most Frustrating Phrase in Personal Finance


  • “It depends” is a near-universal phrase in personal finance. It’s also incredibly frustrating.
  • People are hard-wired to desire certainty. When we don’t feel certain, we’re likely to stall our decision-making.
  • Good financial planning provides a cure by delivering two outcomes. 1) a plan we’re certain works for today’s circumstances and 2) the flexibility and confidence to adjust to uncertain future outcomes.

The Most Frustrating Phrase in Personal Finance

Perhaps no personal finance phrase is more frequently uttered – and draws more eye-rolls – than “it depends.”

Ideal personal finance advice is dependent on the individual it’s being applied to. As Carl Richards, says, “personal finance is more personal than finance.” 99% of general advice – including what I write here on The Best Interest – should be couched with “it depends.”

Should you budget and track every dollar you spend? It depends. Do you need that level of detail to rein in your spending?

Should you put 10% of your income into your 401(k)? It depends. We need to know much more about your “big 4”: assets, debts, income, and spending.

Is it a frustrating answer? Sure. But should we avoid using it? No way. That would be irresponsible. Good financial advice depends on who you’re talking about.

Do I Need Professional Help?

One big question I’m answering every day: “Do I need professional financial help?”

It depends! Anyone who answers differently or in black-and-white terms is either ignorant, deceptive, or both. And if you do need help, what kind? There are dozens of different services, business models, and definitions of “financial services.”

I’ll start with a personal anecdote. I’m such a nerd for investing and financial planning that I was never an ideal candidate for needing to hire a professional. I enjoyed the autodidactic hours required to be a DIYer. Case in point: writing 200+ articles and recording 60+ podcasts for the fun of it.

But do all DIYers fall in the same boat? No! Many DIYers seek out professional help as a safety net, saying either:

  • “I want a pro to double-check my math.”
  • “I need a trusted advisor as a backup for my family in case I get hit by a bus.”

Does a young couple just starting out need professional help? It depends, but often the answer is no! Instead, they need some basic recommendations:

  • Measure your money. Budgeting helps.
  • Start saving/investing ASAP. Your early years matter a lot.
  • Pay yourself first and set aside saving/investing money every month.
  • Low-cost index funds, held for the long run, are your friend.

But some people desperately need professional help. I’ve seen staunch and stubborn DIYers making $100,000 mistakes because they’d been admonished, “You don’t need professional help!” They could have spent $10K to save $100K (and saved their time to boot), but the “forever DIY” cultists led them astray. They stepped over dollars to pinch pennies.

Some people need professional help. Others don’t. It depends.

[And of course, if you do seek out professional help, ask those professionals the right questions!]

Why Do We Seek Certainty?

“It depends” is typically the right answer, especially in personal finance. But it’s not satisfying.

Why do people seek black-and-white? Why do the Sith (and Dave Ramsey) deal in absolutes?

In a 2015 article in the Harvard Business Review, Zakary Tormala and Derek Rucker wrote:

Certainty profoundly shapes our behavior. The more certain we are of a belief—regardless of its objective correctness—the more durable it will be and the greater its influence on what we do. Across dozens of studies spanning more than two decades, consumer and social psychologists have shown that people who are certain of their beliefs are more likely to buy, buy sooner, and spend more. They’re more likely to sign petitions and to vote. They’re more willing to express their opinions, endorse products, advocate for causes, and try to persuade others to adopt their views. They’re better able to withstand attacks on their own beliefs and more inclined to challenge opponents.

In short, certainty is the catalyst that turns attitudes into action, bringing beliefs to life and imbuing them with meaning and consequence.

People speak in (and seek out) black-and-white certainty because it gives us the confidence to act. It drives behavior. You know it in your heart. Just tell me what to do!

But how can we deliver financial certainty in a world of “it depends?”

[Hint: annuities are not the answer!]

Financial Planning – Working With “It Depends”

Financial planning is the answer. A good financial plan delivers a modicum of certainty and the confidence that uncertainty is frankly okay.

Building a 20+ year financial plan might involve hundreds of decision points. Roth or Traditional, expensive or cheap, a loan or no loan? Most of those decision points have an “it depends” clause attached to them.

The financial planning decision tree quickly spirals out of control. 100 binary decisions lead to 2^100 unique paths…and 2^100 = 1,267,000,000,000,000,000,000,000,000,000 (which, I learned, is 1.267 nonillion).

For most of us, facing down 1.267 nonillion options is a shackle. It’s pure analysis paralysis. How could we possibly find any certainty when faced with that many options?

I’m better off twiddling my thumbs…

Financial Adventuring…

But I don’t see it that way. Yes, the complexity of personal finance and financial planning is a challenge. But I view it the way Lewis and Clark and Sacagawea (LCS, for short) viewed their adventure into the unknown western North America. And I encourage you to do the same.

Just think about their status as LCS began their adventure outside of St. Louis:

  • 99% of the fine details that lay before them were a total mystery. But the broad strokes were vaguely understood. They had direction and a goal.
  • They were well-equipped. They had supplies, expertise, and experience. They were prepared to face new challenges on the fly.
  • They knew, even as they took their first step, that their plan was surely to change.
  • They knew that their plan wasn’t perfect. How could it be?! They were tackling the unknown.
  • Nevertheless, they began with a plan in mind. It was the best plan they could muster based on the known facts at the start.
  • And, once the plan was in place, they took that first step. They did not permit uncertainty to paralyze them. And that’s hugely underrated!

Financial planning is no different, albeit a bit less rugged. You cannot have a financial plan that perfectly accounts for 1.267 nonillion unique outcomes. But…!

  • You can understand the broad strokes of your future while knowing the fine details will change over time. You have a direction. You have goals.
  • You can equip yourself with expertise and experience. These are your tools to overcome new challenges on the fly.
  • You make the best plan you can – which includes judgment calls – based on today’s facts. But you know full well your plan will change.
  • You also know today’s plan won’t be perfect. You’re tackling the unknown future!
  • And once you’ve created today’s best plan, you take that first step and enact it.

“It Depends” Is OK

You don’t need certainty for nonillions of scenarios. But you do need a starting point that works today. You do need the expertise, experience, and flexibility to adjust to uncertainty (because it’s certain to arise).

“It depends” will always be a frustrating answer. But it shouldn’t paralyze your financial adventure in its tracks.

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