Good Math or Girl Math?

I can’t help but laugh when I read this article in yesterday’s Sunday Times invest section, “Counting on good math to combat girl math”. The editor said that her friend attended the recent Taylor Swift concert in early March 2024 for free. However, her explanation on what “free” meant, was that although she had already paid over $200 for the tickets way back in July 2023, she did not spend any actual money on the day of concert itself, and hence she attended the concert for “free” ;p

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This reminded me of a buzz phrase last year, when there was a viral TikTok trend of this hashtag #girlmath, of which the underlying meaning was the use of excuses to justify indulgent purchases.

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Perhaps, we all indulge in girl math from time to time, like how the editor mentioned that if she resisted buying $4.50 bubble tea today, it would mean she was $4.50 richer and she could happily spend it on something else another day. Well, the sad truth is, her bank account continues to hold the same amount, with no extra inflows just because she stopped herself from spending some money.

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As funny as this girl math logic can be, it can be dangerous when it comes to bigger ticket purchases – what if, you say you saved $500 because you bought some flight tickets during a sale, but then you justify spending an extra $500 on accommodation because you had a $500 “saving” – then it wouldn’t be a $500 saving already, would it? The $500 had flowed out, so there is no actual saving after all..

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Therefore, as part of this 195th week of our #SundayTimesRecap series, let us learn more about girl math – not to use them to justify our own indulgent purchases - but to be aware on how we can avoid nonsense logic and build real wealth for ourselves:

?1. Separate emotions from money decisions. In Girl math: If a dress costs $300, and you can wear it 3 times, it means your real cost is only $100. But Good math says: $300 for a dress means it is a flat $300 cost, regardless of how many times you wear it. The thinking behind this flawed logic is that the woman really loves the dress, but it is too expensive, and she can only afford a $100 dress. So, she tries to justify that it is not expensive if she can wear it at least 3 times, and then it can be “worth it”. We must avoid personal bias and consider finances holistically when it comes to spending decisions.

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2. Financial discipline is a consistent effort in tracking expenses and growing savings. In Girl math: if you go to a store and you don’t buy anything, it means that you have grown your savings. Good math says, only when you put aside a portion of your income and not spend it, then your savings grow. Therefore, set a budget, know how much to set aside monthly for necessities, then spend within that budget, so that you do not have to touch the savings you had initially set aside. That is how your savings can grow over time.

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3. Men can fall into the same mental accounting trap too. While girl math stereotypes women who are seen as impulsive and emotional, less able to handle money and unable to understand “cold, hard” finance, the men can sometimes justify their car purchases by saying that his car is “free” since he plans to use it daily for more than 10 years and it is his preferred choice over the inconvenience of not having a car, and having to rely on other methods of transport. A man can also say his Patek Philippe watch is “free” because he is merely looking after it for the next generation. Hence, girl math is really an expression of mental gymnastics people execute when they try to justify their spending.

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Overspending is a negative financial habit, and it can be made worse if we try to justify it with unsound logic. Everyone should spend within their means. And at the same time, cultivate a strong savings habit, by putting aside income earned into a few categories – for emergency funds in case of job loss, home repairs; for insurance in case of illnesses; for investments to take care of retirement income. You can even save for future entertainment expenses, so that when you really need to treat yourself to your favourite singer’s concert, you can spend that extra budget without worrying about compromising your financial goals.

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With this knowledge of differentiating between girl math and good math, I invite you to join my webinar, “The Lifetime Income Streams”, on Wednesday 24th Apr 2024 at 8pm, where my teammates and I will share several lower risk investing strategies that can build your wealth based on good math, and at the same time, these strategies can help you create assets that give you a monthly income for life. You will feel more confident in managing your money matters as most of our attendees can testify.

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Register for the zoom link – select “Invited by Victor” - here: https://www.thelifetimeincomestreams.com/tlisvip.

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To reach me over my personal Telegram chat, click here: t.me/victorfong

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