What do people mean when they say they don't understand money?

[taxguru]

I've always thought that when people say that, they mean "complicated" things like APR on loans, or deductions on their payslips, etc.

But a couple of recent conversations have really got me thinking..

First one, a middle aged semi-professional bloke. We started talking about business finances, tax returns, etc., and he just glibly said "I don't understand money" so I'll need someone to do all that for me. Fair enough, pretty common for the self employed to engage an accountant and/or book-keeper. I started to prod away at what he'd do himself (usually invoicing customers, paying bills, etc), but he didn't want to do any of that. I showed him a couple of very basic templates for a sales invoice - literally just putting in a bit of text in one column, the price in the next column, then add things to it line by line. His face just went blank and he said he didn't understand invoices. I tried to say it was just the same as the invoice he'd get from a garage for his car repair, or from a tradesman working on his house, but he just didn't "get in". I started talking about bank statements and he said he never looks at them because he doesn't understand them!

Really struggling here to know how someone "can't understand" a bank statement. It's just a list of in's and out's and a running balance as to how much is in the account. Fair enough, sometimes credit card statements, loan statements etc can be hard to understand, but this was a simple current account statement. He just glazed over and repeated "I don't understand money".

I thought it could be a numeracy problem/disorder, so I left it, and we started talking about other aspects, and he was perfectly capable of understanding and dealing with numbers when it came to talking about, say, engineering terms, of nut and bolt sizes, lengths and dimensions. It really was just a complete mental block about money.

Not sure what I'm asking really.

As I say, I've seen this twice recently, after never experienced it at all in the previous 40 years of working. Yes, I've come across a fair number of innumerate and illiterate people and worked with them to support them as best I can, but really never had this "blindness" about money before from people who are otherwise functionally numerate and literate.

Could he have been illiterate or have undiagnosed learning difficulties? From your description he understood what you meant but couldn't read what you showed him.

It's an extension of saying they don't understand numbers because it's seen as a positive personality type.

People who understand numbers and money are boring, nerdy and uptight.

Therefore people who don't are cool, exciting and easy going.

He might have dyscalculia. I do. It's like dyslexia but with numbers. You can learn but it's just really hard. My brain just doesn't compute numbers.

I spent a few years working in flooring so I cam calculate the square metres of a room and the coverage of a pack of flooring to how many packs is needed or draw a cut plan to carpet a house and do a hand written quote but don't ask me to say my 4 times tables or what 12 x 12 is because I can't work it out. My brain just isn't wired for it. Can't read a map either.

I can do money easily enough though. Its just how it manifests for me. I also couldn't understand 24hr clock or tell the time on a regular clock until I was in my 20s.

Thanks for that. The guy's "trade" is engineering/technical drawings, so I can't image he has number blindness or dyscalculia as it's very "number heavy" with him labelling drawings and creating scale drawings. He seemed fine and confident with numbers generally, he just seemed to go completely blank when it came to money!

That's why it's thrown me so much, even more so being the second time recently I've seen it. I've seen lots of people struggle with the usual complicated things like payslips and loan APRs, compound interest, etc., but that's entirely understandable and it's more than the basic numbers and not something from daily life.

Some people have really negative emotions and experiences attached to trying and failing to do maths - usually from school.

In the past I had a role working with professionals to teach specific numeracy skills, that they had to pass.

So many were resistant, insisting they just couldn't do it, they were stupid, they always failed at maths.

It took a lot of work to try and find ways for them to be successful at first very simple problems, working up to harder things so that they could believe that they could in fact do maths, and eventually become competent at this particular set of skills.

Sometimes it's more about being afraid to try, because they believe they will look stupid.

I think part of it is how you're introduced to money.

Most kids are taught to manage money at no more a level than "I have £1 so I can buy £1 of stuff".

My parents didn't give us £1, they added £1 to our "balance". If you saved up for something, they would add £1 for every £10 you saved.

Simple and really effective.

Is it the combination of numbers and words?
He can clearly do numbers.

Invoice, disbursement, bill, receipt, statement- they all have very specific purposes but are broadly similar to other things. They aren’t use much in everyday life but are taken for granted by those who use them, so hard to explain.

income expenditure expenses returns vat tax revenue

A single sentence can have several such words in.
You Need to decode them, process the meaning then make sense of the whole, while the person talking to you has a moved on to the next sentence.

I have dyscalculia, and I can understand mathematical (and financial) concepts well enough, but when I look at actual printed numbers written down they get all jumbled up. I’m the same with music - could never learn to read music despite years of trying.

It’s odd because I was an early reader and a great speller and am proficient in languages with different alphabets - for me it’s some information processing thing to do with symbols that don’t relate to words.

I can understand invoices and bank statements but if you asked me to tell you the numbers involved I likely couldn’t read them back accurately.

ETA: bizarrely I can keep numbers straight in Excel spreadsheets and am very keen on budgeting and long range financial forecasting - but I could not do what your friend does re: measurements and weights and dimensions, as I also struggle with depth perception and distances and spatial awareness. I suspect there is something about the ways in which numbers become concrete rather than abstract to people, that probably comes into play.

Or could he have been a former Chancellor of the Exchequer?

Or Liz Truss with a fake beard.

Or current!

I think money is quite emotionally fraught - if you've ever been short of money then it can trigger fear based on literally survival instinct - the thought that you might not be able to feed yourself or maintain shelter for example or you might be inviting danger (angry creditors).

Then it's also wrapped up in responsibility and morals (debts, supporting dependents, responsible vs irresponsible spending) and self-worth (especially in terms of pay for work) and that makes it more complicated on top.

As you say, he didn't have issues processing numbers, so unlikely to be a learning issue. But a lot of people find managing money stressful and acute stress can put you into a very irrational place. Similar to how if you have a spider phobia, you are unlikely to be able to let the spider crawl onto a piece of paper and take it outside, even if you can do this easily for a ladybird, for example.

You can know rationally that this spider is many many times smaller than you and cannot hurt you in any way, you can be physically capable and know the mechanical process of how to take it outside, but you still can't override the brain function that is turning you into a wibbly mush if you even think of getting close enough for it to touch you.

That kind of thing can also happen around money - it might not be a conscious thing. I think I had this a bit until I started to learn more about budgeting and see it differently more like a resource rather than some kind of measure of whether or not I was a worthy person.

This seems a bit mean. I struggle with numbers and when it’s been ‘discovered’ by colleagues in places I’ve worked it’s actually quite humiliating. I’d love to ‘understand numbers’.

There may also be the fact that people kid themselves they aren’t good with money because they stick their head in the sand about over spending. SIL is firmly in this camp. DH tried many decades ago when she was complaining about being hard up to assist her with financial know how. He spent a lifetime of teaching and gave up, she was so reluctant. We are all now in our fifties she has very little to show for a life where apart from a couple of years she has always earned a really good wage. She was earning 50k back when DH and I got married in 1999, she also had accommodation for free and food included and a company car, fully paid mobile phone and a clothing allowance. Some of those times were tax free as classed as offshore or in other countries. She worked as an assistant for the mega wealthy for around 25 years, people on the Times rich list.

I think he was trying to shut down the conversation because he has no interest in doing his own billing/book keeping

Maybe it's more he chooses to outsource it than he doesn't understand it. I might say I don't understand cars, but I can drive one but I choose someone else to maintain it.

Or I don't understand this recipe for tandoori chicken. I do and I could make it. But I choose to outsource it to the takeaway.

......people have talents in different areas. Some people have empathy whilst others understand numbers....

I find anything to do with numbers and maths (that isn't basic arithmetic) very hard and it makes me worried thinking about it. I can understand a bank statement, but trying to make head or tail of pensions, mortgages, accounts, invoicing, spreadsheets etc is very difficult and I tend to avoid it whenever possible. I even hate trying to divvy up a restaurant bill. I was good at maths up until secondary school, then it all went downhill.

It’s odd because I was an early reader and a great speller and am proficient in languages with different alphabets - for me it’s some information processing thing to do with symbols that don’t relate to words.

@Bunnyhair It's interesting that you were an early reader, I was too. Was reading simple stuff by 3 and consistently reading at 4 years ahead in reading levels at school. Same with spelling although my grammar was never fantastic.

I’m afraid I’m the same as him. I need finances to be very straightforward otherwise my brain won’t compute. I am very bad with maths and numbers. I’m always in awe of Martin Lewis’s understanding of finance.

I agree. I’ve also pretended to be bright and breezy about not understanding numbers because I’d rather people thought I was an airhead who didn’t care than that I was so thick I couldn’t understand things most people learn easily by the age of 7.