Tutorial: Why We Suck at Money (and How to Use This Book to Get Better at It)

I was told there would be presents.

It was Christmas morning, I was four years old, and the plastic tree sitting in the living room of our one-bedroom apartment looked a little thin. Television, department stores, neighborhood friends—they all made it seem like Christmas was some magical day where every kid got all the toys they wanted, no questions asked. So when I noticed nothing under our sad little tree, I looked up at my mom, who must have seen this coming, and asked, “Why didn’t Santa bring anything?”

If our lives had been a daytime TV show or a Lifetime movie, my mother’s eyes would have welled up as she searched for the right explanation. I, a small and innocent child, would have learned the holidays are not about materialism, but love, family, and counting your blessings. This tender message would be the true gift, better than any Barbie doll or My Little Pony.

My life is not a movie, though. So when I asked my mom, a resolute immigrant who had made it through a tough life, why Santa hadn’t brought the presents, she snapped, “He’s busy! You think he has time for everybody?”

Fair enough. Her explanation seemed reasonable, and I fully bought it—until later that day, when watching television, I saw someone parachute onto a football field during a game. Guess who it was?

“Busy?” I yelled. Clearly, if Santa had time to drop in on a football game, he was not busy. He was just an asshole who picked favorites.

At the time, I had no concept of money and, thus, no idea how unreasonable I was being. I had no idea how hard my single mom worked to keep me fed and clothed. She couldn’t afford child care, but I thought it was fun sneaking into her job while her coworkers took turns watching me. She couldn’t afford a bigger apartment, but I enjoyed sharing a room with her and, occasionally, even my grandma. She couldn’t afford a car, but I loved running for the bus through a field of empty beer cans and dandelions. Once, when the bus left us behind and I giggled, my mom laughed and said, “Kristin, this is not supposed to be fun.”

When she remarried, it wasn’t to an executive or lawyer or doctor. She fell in love with the guy who worked in the produce department, and then those two broke kids proceeded to raise two broke kids of their own. As I got older, I began to realize my parents had a complicated relationship with money. “Money isn’t the root of all evil,” my dad used to say. “Not having enough is.” Indeed, when you do have enough, life is simpler. You buy a car to get to work. You send your kids to day care. Santa is not an asshole. Most of us don’t want to be filthy stinking rich, we just want enough money to make life a little less complicated.

When I grew up, I wanted to get money—not just in the literal sense, but mentally as well. Yes, I knew there was more to life than money. I was grateful for friends, family, and many other blessings, but at the same time, I wanted to know what it was like to live a life where money wouldn’t hold me back or keep me from doing the things I really wanted to do.

But that’s so much easier said than done.

If the statistics are any indication, most of us aren’t great with money, but that’s putting it mildly. Most of us actually kind of suck at money. A poll conducted in 2014 showed that more than 60 percent of Americans didn’t have enough money to pay for a $500 emergency.² Of that 60 percent, about a quarter said that they would cut back on other areas to pay for the emergency. Another quarter said they would borrow money from friends—or worse, pay for it with a credit card, a decidedly costly move considering the average household with credit card debt pays $1,300 in interest every year.³

These are just a few of many statistics you’ve undoubtedly seen in headlines over the years, and there are a few reasons that explain why they’re such unflattering illustrations of how we handle money.

1. MONEY HAS A BAD REP

First, if you’re like most people, you probably have some negative associations with money. What’s the first cliché that comes to mind when you hear the word? It’s probably something like, Money can’t buy happiness. Or Money is the root of all evil. The point is, we haven’t exactly been praising money on a philosophical level.

Most of us tend to think of money as intimidating, boring, or materialistic, and therefore, it remains taboo. It’s a lot like the creepy dude in your office who says inappropriate things and keeps asking you to join his touch football team. You know he’s there, but you really don’t want to associate with him unless you have to.

The problem is, unlike your annoying coworker, you can’t just ignore money and hope it goes away. That only makes things worse—much worse. When you ignore money, it complicates your life in innumerable ways. Terrible things can happen: your car might get repossessed, you might get evicted, you might even have to change your phone number because debt collectors won’t stop badgering you. By avoiding money, you also allow it to become your master. It compels you to stay in jobs you hate, dream about traveling instead of actually going anywhere, and limit how you live your life because you can’t afford any other option.

2. THE ECONOMY ISN’T WHAT IT USED TO BE

Let’s be real, though. Part of the reason many of us have such a hard time with money is that the economy is changing. While employment rates have steadily increased since 2014, they’re nowhere near where they were before the Great Recession⁴ and wage growth is slow. This leaves many economists to believe the standard nine-to-five job will gradually disappear, while workers will embrace the “gig economy,” made up of Lyft drivers, Task Rabbits, freelance creatives, and other independent contractors. Intuit estimates that by the year 2020, a whopping 40 percent of the workforce will be freelance.⁵ Standard perks employers once offered, like pensions, are going extinct. The working class has to fight harder just to maintain its working class status. To make matters worse, we have more responsibility than ever over our finances, from saving for retirement to paying our estimated quarterly taxes. It’s enough to make you want to drop everything, put on a Morrissey album, and take a nap—why even bother trying to get your finances in order?

Giving up, however, is the worst thing you can do. In fact, we need to confront our personal finance skills, or lack thereof, now more than ever—because there’s only so much we can do about things that are seemingly out of our control (like the economy), and that’s all the more reason to focus on what we can control in order to fight a changing job market and empower ourselves financially.

3. MONEY ISN’T REALLY ABOUT MATH

However, it’s not just a complicated mind-set and a changing economy that hold us back. Many of us simply don’t understand how money works in the first place. You probably never learned about it in school. Your parents might be just as clueless about money as you are. And, more important, even if you do understand the basic math and rules behind personal finance, that doesn’t guarantee your success with it, because personal finance has more to do with behavior than anything else. Sure, a math teacher can show you how to crunch some numbers and draft a budget, but who teaches you how to actually stick with that budget? I don’t know about you, but when my favorite store has a sale, budget math is not at the forefront of my mind.

If you’re bad with money, take solace in the fact that you’re not stupid, you’re just human. While this book will teach you the basics of financial literacy, it also focuses on what actually makes a difference: your own habits and behaviors.

Money determines where you live, what you eat, how often you see your friends, where you go to college. We often don’t fully live the way we want because we’re too busy struggling to live the life we can afford. That’s where personal finance comes in. Contrary to popular belief, personal finance isn’t about being frugal or chasing money. In fact, I’d argue it’s not about money at all. It’s about not letting money get in the way of the many things you want to do, accomplish, and experience.

PERSONAL FINANCE AS A GAME

I remember the day my little brother, Draden, was born. I was elated—because I finally had someone to split the yard work with.

My least favorite yard chore, hands down, was picking weeds. The heat, the bugs, the prickly leaves: all of it was a nightmare to me. Naturally, when Draden was old enough, I outsourced this job to him. But I had to be smart about it. It’s not easy to convince a five-year-old to pick weeds, after all. My solution?

“We’re going to play a game,” I told him. He hopped up and down and clapped. “You see these little flowers in the yard? For every flower you pick for me, I will give you one point. If you get the root of the flower, like this”—I held up a little dandelion, wiry strings dangling from its bottom—“you get two points.”

Draden threw on his Barney sneakers, bolted into the yard, and grabbed at weeds left and right. He really wanted to win this game. What an adorable dummy, I thought, observing from inside with the air-conditioning and a can of Dr Pepper.

Child labor issues aside, there is something beautiful about this kind of manipulation. My brother was obsessed with this mundane chore all because he thought it was a game. Not long ago, I reminded my now twenty-five-year-old brother about this.

“Whatever.” He laughed. “I had fun.”

And that’s just it. Picking weeds was still picking weeds, but in his eyes, it was fun. Fun is a powerful, motivating concept we tend to underestimate, and it’s what gamification is all about.

Gamification is a strategy often used in business; it employs gaming elements to make boring tasks a little more engaging, motivating, and, ultimately, fun.

Typically, getting out of debt is about as much fun as picking weeds for someone. The difference is, when you accomplish the former, you get to reap the reward. When you pay off your debt, you have made progress for yourself, not your lazy older sister.

Whether you realize it or not, you’ve been exposed to gamification. McDonald’s gamifies the purchase of their food, for example, with their annual Monopoly sweepstakes. They reward you for your purchases with stickers, which make you want to keep playing the game so you can collect even more stickers and possibly earn an even bigger reward. Habitica is another example of gamification. It’s a habit-tracking app that turns your goal into a role-playing game in which you’re the main character (you even get to design your avatar). Your tasks, daily activities, and habits become monsters. Complete the task and you beat the monster, get rewarded, and move forward in the game.

Gamification doesn’t have to be that literal, though. Some companies and websites use one or two simple elements to motivate users without turning their entire platform into a game. For example, Mint, an online budgeting tool, uses a progress bar to help users track goals. When you’re on track with your goal, the bar turns green. When you’re behind, it’s red. This helps you visualize your progress, giving you a subtle but significant sense of mastery over your goal.

Some people have criticized gamification as a mindless, gimmicky marketing tool that’s all about points, rewards, and leaderboards, but when you really dive into it, gamification has more to do with psychology. The elements of gamification, when implemented correctly, encourage your brain to release the pleasure chemical dopamine, and research shows that dopamine is a strong regulator of motivation.⁶ When you feel good, you want to keep going, even when the task is boring. Just ask Draden.

In short, gamification is all about motivating users, customers, readers, and players to take action. And both motivation and gamification come down to a few basic concepts⁷:

At this point, you might be wondering why on earth we’re talking about gamification and motivation in a book that’s supposed to be about money. Well, there’s a strong connection between personal finance and gamification. But before I get into that, let me tell you about who I am and how I started writing about this stuff. Back in 2012, I began writing essays about money for a website called Get Rich Slowly. I wrote about everything from my struggle to save money to my experience investing for the first time. I would learn something new about money, break it down, then write about it so regular people like me could understand it, too. Other websites and outlets, from Lifehacker to Mental Floss to NBC News, started asking me to write about money for them, too, because they liked the way I broke down complicated concepts and made them easy for readers to understand.

After writing about money professionally for five years and, more important, struggling with it personally my entire life, I came to the realization that being awesome at money simply means feeling like you have control over it. When you feel like you have control, interesting things happen: You’re motivated to pay off your debt, stick to a budget, and save for the future.

I know a lot about money, and I think you should, too, which is why I wrote this book. I wanted to document everything I’ve learned about money, but I knew it wasn’t enough to just share the information or even simplify it. So I thought about my own experience with money and how mastering it really had to do with “small wins”—gradual accomplishments that made me feel in control and actually made personal finance fun. Being good with money basically comes down to understanding and working with your own human behavior. In other words, it’s about thinking about money differently—hacking your brain, so to speak (which sounds really messy, but you know what I mean). And that’s what gamification is all about: leveraging human behavior to reach a desired outcome.

This book gamifies personal finance so that you’re motivated to take control of your money. With that in mind, I also divided the information into three stages (because money mastery doesn’t happen overnight).

Stage One covers the basics. You’ll power up your personal finance knowledge by learning how to automate your frugality so you can save money without wasting your time. You’ll conduct a bill audit to stop overpaying for basic living expenses. You’ll learn to talk about money in your relationships. Finally, you’ll build a better budget and learn why your current one doesn’t work.

Stage Two optimizes your plan. Once you know the basics, you’ll learn how to improve your finances even more, so that your financial system works like a well-oiled machine. You’ll learn how to pick the best bank, supercharge your debt payoff, and improve your credit.

Stage Three teaches you to be awesome at money. After you learn the basics and optimize your financial plan, I’ll show you how to stick to that plan. You’ll learn how to start investing, how to make more mindful spending decisions, how to negotiate, and how to stick with your goals to reach financial security.

Most books have chapters, but being more action-oriented, this book has “levels” that you must “beat.” Each level includes actionable steps you can take to move forward with the information you learn. You’ll follow scripts for lowering your bills, complete a few exercises to troubleshoot your budget, and learn a few hacks for getting out of debt faster.

This book is also interactive. Go ahead: bend it, fold it, dog-ear it. It’s yours! It includes exercises, too. I’ll ask you about some of your own experiences, opinions, and thoughts on money—there’s no need to find a separate sheet of paper. You can write your answers directly in this book. A few other interactive elements you can expect include:

By the end of it all, you’ll no longer think of money as scary, taboo, or synonymous with greed. In fact, you’ll learn how to finally master your money, instead of the other way around. It’s my hope that this book will help you take control of money and see it for what it really is: a tool you can use to be more independent, create more options for yourself, and accomplish the goals that matter to you most.

Simply put: this book is less about money and more about you. So let’s get started!