When Human Math Beats Real Math

Most of the folks who work here at YNAB know a lot about money. We can lay down a spending plan in two minutes without any help from a calculator or fancy iPhone apps. Many of us can whip up an amortization schedule faster than you can say “interest rate.” So you might be surprised to learn that we sometimes make financial decisions that every financial guru out there would say was foolish on its face. Why? Because sometimes, it’s clearly the right thing to do. Sometimes, feelings come first.

The personal finance world is full of highly technical financial—commonly cutthroat—advice. Sure, it’s true that the best financial decisions often come down to the math. But since personal finance is personal, the right decision for you might be the one that doesn't perfectly align with the numbers. Too often we have our heads in formulas and spreadsheets and forget that people are the point. So today, I’d like to give you a few examples of when human math beats real math. 

Dignity is priceless

One of our team members is caring for an aging relative who needed to cash out some of the equity in their home in order to do some painting and repairs. However, the resulting monthly payment was going to be a challenge for this relative, who is living on a fixed income.

To solve this—they took out more money than they needed for the repairs and are using the surplus to offset the loan payments. This allows the relative to enjoy their home in their retirement with a manageable loan payment.

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Generally, this kind of circular plan leads to negative financial outcomes. But the circumstances of this situation and our team member’s values made it a slam-dunk decision. This was not about making the best financial move, but instead making a move that focuses on dignity and improving their relative’s quality of life. “It’s not good math math,” they said, “But it is good human math.”

Katie’s expensive (but worth it) move

When the dignity over dollars story was shared, it quickly became clear that this was a common sentiment—many other team members jumped in to tell their feelings-first situations.

When Katie’s husband got a job in an expensive area, he commuted hours in each direction, which really cut down on his family time. After enduring this for a few months, they decided to move closer to his job, almost tripling their housing cost in the process. 

“Common financial advice would never have told us to spend this much per month on housing,” Katie said. And cutting back on other spending has been stressful. But Katie says she loved the decision to prioritize family time. She says, “Every single time we sit down to eat dinner together, I remember how much I love our decision.”

Giving up a cushy interest rate

Amanda bought her family’s home at just the right time in June 2020 with a sweet 2.875% interest rate. They loved the financing deal they got, “so it might sound pretty odd,” Amanda says, “that we are now under contract on a new house with an interest rate of 6.375% in the same city.” Why would they make a move across town when their mortgage was so cheap? Because it was the right thing to do!

Amanda found an opportunity for her daughters to attend schools that would accommodate some special needs and challenge them academically. The schools were a perfect fit, but it would require a move to a smaller home in a different part of her city.

It’s hard to say goodbye to a home you love, especially when it means a new mortgage at over twice the interest rate! But for Amanda, the choice was obvious, because it meant a better situation for both her daughters. She says, “Even though we’re taking on a much higher interest rate, the human math for our quality of life has won!”

Radical generosity

Another YNAB team member jumped at an amazing opportunity to help a family member. And I mean help in a huge way, like buying a house for her brother where he could live with a very low rent payment. This particular property was not a traditionally good investment. “We’re most likely not going to make any money off the place and only charging him what rent he can afford right now,” she says, “but he has stable housing for him and his daughter. We’re very privileged to be able to be in a position to help him out.”

When you start to look for it, decisions that prioritize people over numbers are actually quite common. And that’s the way it should be. Sometimes, you need to make decisions based on cold hard math. Other times, there are legitimate, intangible factors to consider.

Building wealth is not just about numbers increasing. It’s about living the life you want to live. When it comes to personal finances, and everything else, people are the point. 

‍Do you want a more people-focused approach to personal finance? Check out YNAB’s Change Your Money Mindset email series and interactive workbook. We’ll help you clarify your goals and priorities, and explore your feelings about finances.