Why Money Advice is Different for Everyone

Money plays a central role in our lives, influencing everything from daily decisions to long-term goals. Yet, when it comes to financial advice, one size rarely fits all. The nuances of individual circumstances—ranging from income levels to personal values—mean that what works for one person may not work for another. Here’s why personal finance is personal afterall.

1. Different Situations

Everyone’s financial starting point is unique. A university graduate with student debt will have vastly different priorities compared to someone saving for retirement. While general advice like “live within your means” may apply broadly, the specifics - such as how much to save or invest - really depend on an individual’s income, expenses, and financial or family obligations.

Blanket statements, like saving 20% of your income, may be unattainable for someone living paycheck to paycheck or freelancer but quite reasonable for a higher earner with recurring income. Likewise, the amount of investment and emergencies funds will vary greatly for people with better family backgrounds and have the extra cash to spare.

2. Varied Goals

Financial goals differ widely from person to person too. Some may prioritise early retirement, while others focus on buying a home, traveling the world, or funding their children’s education. These goals dictate different strategies. For instance, a person aiming for early retirement might adopt aggressive investment tactics, while someone saving for a down payment in the next few years might opt for safer, more liquid options.

3. Personal Values and Lifestyles

Money is not just a numbers game; it’s deeply tied to our values and lifestyle choices. One person might find joy in spending on experiences, such as travel or dining out, while another focuses on saving for long-term security. Financial advice must align with these personal priorities. Telling someone to cut back on what they love most can lead to frustration and burnout, even if it improves their financial metrics on paper.

Beliefs play a part too. Some people don't believe in insurance, and others don't like to invest. Maybe self-care is utmost important this year, maybe learning and growth is all the rage next. One acquaintance felt stuck in climbing the career ladder and was considering quitting to work in a field more related to her passion but for possibly lesser pay. Another took off to another country and did farm stay for a year. It's all our own choices and happiness.

4. Risk Tolerance and Behavioral Patterns

Not everyone approaches money with the same mindset. Some people are natural risk-takers and may feel comfortable investing heavily in volatile assets like stocks or cryptocurrencies. Others might be risk-averse, preferring the stability of fixed deposits, T-bills, bonds or savings accounts. Listening to financial advice must take into account an individual’s comfort level to be both practical and sustainable, similar to career and other stuff too.

5. Cultural and Social Factors

Cultural norms and societal pressures also shape how people handle money. For example, in some cultures, it’s common to financially support extended family, which adds unique responsibilities. In others, some might need to pay for their own university fees or move out by a certain age. These are not small sums to pay.

Expectations, such as keeping up with peers or living in expensive cities, also influence spending habits. Generic tips can overlook these complexities, making it less applicable for you.

6. Evolving Circumstances

Life is unpredictable. What works financially during one phase of life may not work in another. A dual-income couple without children might prioritise travel and investments, while the same couple with young kids may shift focus to childcare and education expenses. A young graduate or single will face different challenges as well.

Financial needs will evolve alongside life changes and the way you manage money will not be the same. For instance, you may give up a corporate role to start a business and the fluctuation in income could lead to a lower saving percentage.

The Importance of Personalised Finance

Given these differences, while general principles can serve as a foundation, working with a financial advisor or using tools tailored to individual needs can make a world of difference. Personalised advice considers the full picture—goals, circumstances, values, and risks—to craft a strategy that truly works for you.

In the end, the best financial advice is the kind that fits seamlessly into your life and helps you achieve what matters most to you. Do enjoy the present moment, while working towards your goals for the future!

Master Your Finances Wisely,

Value Vaulter