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By Shaun Somers

Before you start getting concerned about my ability to count, the numbers in the title are in that order intentionally. It's something that my son said to me recently while playing a board game, and it brought to mind some truths about personal finance.

My 2yr old and I were playing the children's game Cariboo, which is essentially a number/colour/word/picture recognition game.  You pick a card and then find a matching compartment; then hope that when you open that compartment that there's a small ball.  The game is quite fun for a game aimed at very young kids.  

4 Flowers, or maybe 5

He had pulled a card telling him to find a picture of four items.  He looked at the flowers and started counting: "one, two, three, five, FOUR!!"  I knew it wasn't that he was just making a mistake, he can count to 20 easily.

What he was doing was really wanting to open that box and to do so there had to be only four flowers.  I know I have said at times that breaking the rules is ok in life, and I do believe that.  When it comes to your finances though, you need to be very careful.  

Lots of times we see an item or experience that we want to spend money on, and when calculating whether or not we can afford it we count 1,2,3,5,4.  We'll rationalize that it's actually not as expensive as we think it is; or that even thoughit's a bit too much it's a worthwhile extravagance somehow.

People in debt do this all the time.  When thinking about the amount they owe, they will mentally count 1,2,3,5,4 and feel like they're doing ok.  Unfortunately, when they do eventually face the total dollar figure (maybe with the help of a financial coach), they have to admit to themselves that it's actually more like "…4,5,6,7,8…" or more, and the problem is worse than it would have been if faced earlier.

Have you been miscounting the cost of purchases or not facing up to the amount of your indebtedness?  If you did so in the past, what was it that finally got you to realize it and change your behaviour?



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