Introduction to Personal Finance

I don't object to money.

I don't have much, personally. Generally, I would rather have more than less. But I'm not afraid of it, to be specific.

My relationship to money is like my relationship to food. Calories, dollars: these are necessities. Fuel. Inevitabilities one makes peace with first, and the best of, later. The essential factors of growth, of life. Livelihood, on the other hand – or the means by which one acquires that fuel – is the flavor. The taste, texture, scent, appearance. The meaningful part.

It's also like my relationship to language. Money is not inherently real. It is symbolic, and its value depends on how many people agree that "I will accept anything from you as payment, so long as I am certain the next person in line will accept it as well." Something always between a commodity and a token of debt.

I'm not a rich man, but I am an accountant. Money is my livelihood. I've had enough of my own, for long enough, to understand the basics. And I've had enough access to other people's financial lives to know how much I still have to learn. In that sense, I'll be learning with you.

In this series, I intend to outline - in the sort of way I'd like to hear it myself - the absolute basics of personal finance. It's my intention, no matter your age, no matter your bank account balance, even if you don't have a bank account; that you'll find at least some of the information in this blog enlightening.

In spite of the arcane, convoluted appearance of our global financial system, there are basic, unchanging rules. Essential strategies based on those rules. Choices to be made, within those strategies, which are always in one's best interest.

Sounds pretty boring, right? Good; it's working. This was designed to bore us! The language of the market is purposefully abstract. The mechanics of consumer finance are deliberately deceptive. The financial world was designed, and is maintained, by those who found a way to divest incomprehensibly large numbers of people of imperceptibly small amounts of money.

That they do not teach you about it in school is, as they say, a feature; not a bug.

After all: the more bored you get, the less you care. The less you care, the less you know. And the less that you know - about interest rates, about your own agency in our financial system, about all this terrifically boring stuff - the less of a fuss you'll make about that $34 overdraft fee.

But here's a fact: If you spend $24 or less, overdraw, receive an overdraft fee of $34, then deposit money to cover the charge within three days? You just paid the equivalent of a loan with an annual percentage rate of 17,000%.

Seventeen thousand percent. That's like mortgaging a very average house for $60 million.

In 2020, U.S. banks made $12.4 billion in overdraft fees, alone.

But the less I know, the better. Right?