Why Personal Finance is a bit Like Your Wardrobe

Wardrobe Shirts

by Ryan

To say that one size fits all with personal finance is like saying one size fits all in a clothing store. We each have our unique style, taste, and clothing budget. When we come home with our new found clothing treasures we all organize and plan them differently and no two closets will ever look the same, so why would our finances be the same? If I’ve learned one thing talking to people about personal finance it’s that there isn’t a cookie cutter formula for everyone. Each budget, expense, and income statement will be slightly different because each one of us are different.

Each and every person has a completely different wardrobe. This means different clothes, different styles, some folded, some hung, some laying wrinkled in on the floor (it’s okay, I don’t judge). So how do we convert our wardrobe to finances?

Budgeting on Emotion

Some of us shop at Wal-Mart, some at Macy’s and others are even apt to do their shopping at Good-will. Where we shop for our clothes can sometimes be more important than what clothes we actually shop for. I think it’s pretty safe to say that most spending is emotionally driven, we want to feel good about what we’re doing. Oddly enough some of us feel good saving money while others feel good spending as much as possible. Your budget will directly indicate what makes you feel good, because we typically spend our money on things that do just that.

Investing in Style

Some people are comfortable flaunting their stuff and exposing themselves in public, while others are much more conservative, don’t take risks and stick to jeans and a t-shirt.

Investing is no different. Some of use roll the dice, love the thrill of penny stocks and don’t care about average rates of return for the next 30 years. Carpe Diem some say! On the other hand, there are those of us who can’t stand to think but put their money in anything besides treasury bonds, CD’s, and money market accounts. Who would risk their hard earned money on something as silly as penny stocks? Taking such risks wouldn’t allow these folks to sleep at night.

Organizing your Wardrobe

Are your clothes wrinkled on the floor, or are they neatly placed in exactly the same place every day. Do you know exactly what you’ll be wearing for the next week or do you just wake up and throw on the first thing you see?

The way you structure your wardrobe is a bit like how you structure your finances. Some people file their finances away neatly, have all their tax returns ready to go for the upcoming April and already plugged into their personal finance software.

Both fashion and personal finance aren’t exact sciences. They take experience in finding the right fit for you in order to feel comfortable in your own skin, and much like fashion, your personal finance style may change over time as well.

What’s your personal finance style, risky or conservative?

Does your personal finance style match your investing style, or is it opposite?

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{ 4 comments… read them below or add one }

Get Happy Life December 17, 2010 at 12:24 pm

Great analogy there! In my case, personal finance strategy is aligned with my clothing strategy.
I enjoy being organized, simple and frugal – the same happens to my wardrobe – I do have some pieces for special occasions, but they are not expensive by any means.
.-= Get Happy Life´s last blog ..The Only Skill You Need To Succeed =-.

Fabulously Frugirl December 17, 2010 at 9:42 pm

Great post!

My personal finance profile is organized and simple. I like cleaning it out on a regular basis, and I don’t like too many things in it. I’m downsizing my closet so that I can unload stuff that I don’t use or need on a regular basis until I get left with my “ideal” closet.
.-= Fabulously Frugirl´s last blog ..Motivation by Fear =-.

Roman Soluk December 20, 2010 at 6:15 am

My personal finance style is more conservative. Besides, I like your thoughts in this post! Very interesting article!
.-= Roman Soluk´s last blog ..10 Ways to Purify the Air in Your Apartment =-.

Miss T @ Prairie EcoThrifter December 22, 2010 at 11:22 am

Great post.

I must admit I am one to be considered OCD and do know what I am wearing for the week and I do have my papers filed neatly for the tax season ready to go. Being organized seems to keep me on track and stress free with my clothes and my finances.
.-= Miss T @ Prairie EcoThrifter´s last blog ..Death in the Family =-.

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