Relativity - Minneapolis Cherry Spoonbridge

Financial Relativity (Your Experience is Not Mine)

What is Relativity?

In physics, the basic definition of relativity is that physical phenomena are highly dependent upon the position (motion, etc) of the observer.

I was in Minneapolis recently for work. It was a super windy day with 40-50 mph gusts. It was the worst airplane landing I had ever experienced with the plane violently rocking back and forth and up and down right up until touchdown. The wind made the trunk lid slam into my head as I was putting my luggage in the trunk. I headed to Trader Joe’s to buy my imports. As I was checking out, the lady said: “Isn’t it a lovely day? Every day is a lovely day when you don’t live in Duluth!” Hilarious, right? Except I sort of didn’t get it because I’ve never been to Duluth. I’m assuming this is similar to us (in Anchorage) saying in the middle of winter: “At least it’s not Fairbanks!” (which is probably lost on YOU, dear reader!).

This whole scenario got me thinking about relativity. Though I was physically in Minneapolis,Β my experience of the area relative to the woman that lived there was a mere blip on the radar. As an observer to this joke, I was able to appreciate its delivery and, based on context, it’s basic meaning. But what if I was visiting from Duluth?

Financial Relativity

We continually emphasize how personal finance is personal. It’s different for everyone. My thoughts and experiences may be similar to your own or maybe you can’t relate at all to my line of thinking (even if your numbers are similar!). Relativity in personal finance is an important part of the equation. You can calculate, with simple numbers both your financial position and your financial direction. ButΒ calculating your relative position to a financial phenomenon can be more tricky. Let’s start the discussion assuming that my numbers are exactly the same as yours. On paper, our positions and directions are exactly the same. Now let’s look at some phenomena that will mess up our equal positioning.

Childhood Wants:

  • I have heard many people express a desire to give their children what they never had as children. I wanted for very little as a child and my parents (to their credit) did a pretty great job of teaching about money while making sure I felt secure (and not spoiled). My relative position on giving to my children is pretty neutral on this front. I hope to do the same. I want to give them knowledge and opportunity and financial confidence, but I also want them to learn to work and earn and value that earned money. Maybe you feel more passionately about making up for your childhood for your children. You are very sensitive to your kids having the “in” thing that you never got to have. Or you want to make sure that your kids don’t have to miss out on adolescence working insane hours like you did.

Debt :

  • Β Though our finances look identical now (we’re pretending, remember?), you maybe had to fight through debt to get here. Our relativity toward debt is completely different. We’re sick of our mortgage debt, but the interest is low and it really doesn’t impact us all that much. The experience of clawing out of that debt has changed you. Your relationship with your finances is different than mine because of that.


  • We’ve had our share of minor health issues, but we’re also relatively healthy. We often take that health for granted in our future plans (we’ll work more! we’ll travel the world! we won’t slow down until we’re old!). We don’t have a fear of health constantly plaguing our plans. Having to navigate how much energy you can allot each day to things is exhausting. And not knowing how you’re going to feel is hard to calculate in future plans. Health relativity is a big factor.

Now let’s assume our finances aren’t the same.

You’re a year away from financial independence OR you alone make a salary over $100,000 OR you are still facing a huge amount of debt OR you make half of what we make. Money gets relative really fast.

When we were replacing our windows, we spent HOURS painting and measuring and cutting the trim. A lady we knew said: “Just hire my guy to do all that for you. He only costs $50/hour and you could get out of the work!” For this lady, saying $50/hour was the same as me saying $10/hour. I can see hiring someone for a really time-consuming task for $10/hour for as long as it takes (maybe… I still probably wouldn’t do it… but bear with me here…). But at $50/hour, that’s more than I make! My time is currently worth less than $50/hour. If you work for the national minimum wage, hiring someone for $10/hour would be out of your mental thinking.

Finances are relative

Our past experiences are part of the equation. If you feel like you missed out on things in your childhood, you may have to be careful about overcompensating on your own children. As we start making more money, hiring someone to paint boards for $50/hour may start to seem normal. The term “lifestyle inflation”Β is merely another term to describe how your relative position changes when you see more money coming in. We have to be cautious of that as well. Also, spending habits are born from your past experiences and while it is easy for me* to say: “Stop buying your morning coffee and Google ‘Latte Factor’,” that might just kill you. Calculating your relative position to different financial phenomena can help you predict the impact of those phenomena on your finances.

Now I’m interested: What city would you guys use in the same joke as the Duluth one?

*I don’t drink coffee. So it’s easy to say that’s obviously the first thing you should cut out! πŸ™‚


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  1. That’s true, it’s all relative!

    Here in Charlotte when we had a couple cold days in the winter, my wife and I would say at least we aren’t still living in the Midwest where they are still buried in snow.

  2. thejollyledger

    We just happen to live in the best place on earth (she says modestly), so it’s always a great day!

    • MaggieBanks

      Even more reason to insert a Duluth! πŸ™‚ So, to you, everywhere else is Duluth?

      • thejollyledger

        Yeah, I guess it is! I mean Duluth has never been on my radar, but now that I know….it might be my go to. Poor Duluth.

  3. This is so true! I find that people’s perception of debt is so different from mine (and it is all relative). To a friend $6k in credit card debt was nothing because she had $20k but for me I felt like it a huge weight! It was hard for me to express this to her because she had so much more than I did (and seemed to care less about her debt than I did about mine). For me the key was not to let her perception cloud my vision of my debt.

    • MaggieBanks

      Yes, and amount of money skew quickly! 6k is still valid feeling like a huge weight. You should be entitled to that even if your friend has a larger debt!

  4. Kim from Philadelphia

    Great post! I hope you favored your Trader Joes visit!

    I can’t stand super hot, humid weather, so whatever spot in the South that has terribly humid and super hot weather is what I’d insert. Southerners, help me out here? Atlanta? New Orleans?

    We’re financially better off than our parents, but we’re trying diligently to satisfy all their needs and some wants. We try to align our money with our values (thrift store sneakers yet trips to cool places like Vietnam and Paris)

    • MaggieBanks

      I am WITH you on the kids front. That’s the balance we try to strike as well. And yes, Trader Joe’s is ALWAYS worth it, even if the trunk crashes into my head. πŸ™‚

    • Having lived in both, I’d say they’re both equally hot, humid and disgusting in the summer. However, I’d give New Orleans the edge over Atlanta, but only by just a nose.

      • MaggieBanks

        Note to self: do not take my poor Alaskan children to those places in the summer. I would have to peel them off the sidewalk.

        • Note to self: how did I end up in Atlanta? At least we’ve moved to our early retirement home in the mountains (yeah, a BIT cooler, but only a bit!). Great article, you’re a great writer!

  5. Wow – you were in Minneapolis! We live in Minneapolis! Too bad we didn’t know you were going to be here, I would’ve been happy to meet up for lunch. The Spoonbridge and Cherry in your picture is where I proposed to my wife 25+ years ago! Do you get to the Twin Cities often?

    • MaggieBanks

      I do, actually (well, at least 2 times a year)! Next time I’m headed you’re way, I’ll be sure to let you know!

  6. This is such an important topic! Both because it’s so easy to compare ourselves negatively to others, and because it’s so easy to feel like we’re failing because we’re not doing what others are doing, when relatively completely applies. (This topic has been very much on my mind, actually, though not in these terms — see Wednesday’s upcoming post!) πŸ™‚ The same level of frugality is not always wise to implement, for example, and that could be because of another area of relativity: time. If someone has the time to be frugal, that’s very different from someone who doesn’t (:::sheepishly raises hand:::). πŸ™‚

    • MaggieBanks

      We’re always on the same page, as usual. I can’t pretend to understand anyone. We’re all so different!

  7. The 3 factors you mention vary so much and have a huge impact on our relative position, and I agree that it is so important to recognize the impact of those factors on our tendencies and habits. I know a lot of people who had lots of toys and plenty of money as kids, who are leaning toward minimalism. And I know people who had very little and want to be more generous with their kids. Neither is right or wrong, and the best thing is to know why you’re doing something so you can recognize blind spots and, more importantly, your bigger goals. Great post!

  8. The context in which another person ives, will determine indeed if paying 50/hour is a lot or not.

    Next to personal, it is also relative finance. We all have a different current situation and a different goal. With 1000K someone might be half way where another person might have reached already FI… That is what I like about the different blogs.

    For sure, it does not make the things easy, but brings a lot of thoughts.

  9. Hey, Maggie. I’m from Charlotte, so I sneer a lot at the Raleigh folks. And the worst city I’ve been in for sweltering heat is Charleston, SC. On one of the days we were there, Mrs. Groovy and I ducked into a real estate office to escape the heat. We didn’t feel good about feigning an interest in the local real estate market, but we were desperate. And I love your thoughts on financial relativity. A lot of our friends and family are floored that we’re retiring this year. But they all have kids in private school or college. And what they spend in just tuition and fees is more than our annual household budget. Great food for thought. Thanks for the post.

    • When I was in New Orleans, we would frequently take “air conditioning breaks” by ducking into the closest store/bar/etc… for the same reason.

      • MaggieBanks

        Yeesh. I am not sure I could physically handle it now that I’ve lived in Anchorage so long. Even the summertime in Portland (where I grew up) kills me! “It’s so hot! Why’s it gotta be so hot!”

    • MaggieBanks

      I have never been to SC, but not sure my little body could handle it now! And I agree. Some things are “worth it” for some people while some are just not. Who are we to argue what is and what isn’t?

    • Mr Groovy! Great to see you out here!! Like minded early retirees, you and me!!

  10. Growing up in KY, we mostly just made fun of Indiana (Hoosiers). My Granddad was from Corbin, KY (birthplace of KFC) and after visiting that place, it was my go-to city for “at least we’re not living there.” πŸ™‚

    Finance is SO relative. You hit the nail on the head making that point.

    I agree that sometimes my free time is worth more than money (to a point) and I’ll happily trade some of my money to someone if I can get my free time in return. In the future, I’ll be doing a lot of that stuff myself, I’m sure, because I’ll have time. However, I still haven’t gotten a yard guy again, and that takes me about 1 hr a week to do, but only costs $20/week. I don’t know why but I just don’t think it’s worth it. Maybe it’s the hr of music and “exercise” outside as I’m weed eating and mowing I don’t want to give up, but it seems so cheap to get someone else to do it, and yet I still do it.

    • MaggieBanks

      Some things are worth the trade off and some just aren’t. If you don’t fill the extra time with something worthwhile, it’s never useful to hire out something you could do yourself.

  11. My husband is from Duluth, MN, and it’s a special kind of cold. Wind whips off of superior, it snows all the time, and it’s probably got temperatures similar to Alaska. I don’t know why his parents put up with it.

    • MaggieBanks

      I’m sure it gets way colder there than Anchorage does! Even Minneapolis does!

  12. That’s why it’s so important NOT to compare your financial situation with other people… because we are different. Rather, encourage each other on this so called quest for financial independent. That’s why I love the PF community. πŸ™‚

    • MaggieBanks

      Amen, Tawcan! We can’t pretend to “get” eachother because even if our finances are similar, we are not at the same point. Everyone can learn from each other and we can all get better together!

  13. Oh personal and relative! So true, my husband says he wants to give our kids in life what he didn’t have (dental care and stability) whereas that is just normal for me. That is why the metrics often discussed erks me a bit, eg I’m a millionaire but it depends on where you live. You have to do what is right for you and your family, aligned with your values. I try to live by that but it ain’t always easy.
    In Australia, there is a pretty big rivalry between Sydney and Melbourne but honestly both are lovely places, it is more about sports fanatics than geography πŸ™‚

    • MaggieBanks

      Ha! Not about weather, like I’m sure this is (and definitely is for Fairbanks)! πŸ™‚

  14. Haha, I have friends who live in Duluth. Maybe I will send this to them. Especially since they are most likely moving to the Twin Cities in a few months. Or maybe I will wait and send it until after they move. πŸ™‚

    Thanks for writing this — I think it is so smart, and the topic is really important. I feel like there can be a sort of assumption sometimes in the pfsphere that it’s just all about math, and you just have to calculate your numbers and then you can change your habits and change your situation. But it’s a lot more complicated than that: people have so many other factors in their lives that impact their priorities and the choices they make. Wanting to create a certain kind of experience for their kids is such a great example, and not one that would have occurred to me. I think it’s really important to remember that it’s about far more than just math.

    • MaggieBanks

      I bet your Duluth friends would love to hear they are moving to the place where they are the punchline! πŸ™‚ If everything were about math, money really would be easy. But it’s not that easy. There isn’t a one-size-fits all answer to finance.

  15. β€œAt least it’s not Fairbanks!”

    Bahahahaha!! That made my day. πŸ™‚

    BTW; I’ve still got a house up there for sale! Sure you don’t want it? We just replaced the water holding tank with an above-ground one so that it doesn’t try sinking off to China again! πŸ˜€

    • MaggieBanks

      Sorry Lindsay, I just couldn’t ever live there! πŸ™‚

  16. Rue

    Relativity and perception are some of my most favourite things. (odd, I know) You’re so right about how it applies to finances – everyone is different and more importantly everyone sees and prioritizes different things. I think it’s fascinating how differently people will interpret the same situation. In Vancouver we would probably say better here than back East. The worst we can say about our weather is that it rains too much.

    • MaggieBanks

      And everyone SHOULD prioritize things differently. Something you may find frivolous, may be very important so someone else. Back east, eh? πŸ™‚

  17. This is a great point. Reading financial advice and people’s FIRE journeys can be inspirational, but it can also be depressing and defeating if we assume all of someone else’s choices and preferences should apply to ourselves. I’m reminded of a friend of mine who (I found out) has a trust fund — small by trust fund standards, but about the size of my entire net worth. He would probably laugh at the notion of my declaring FI, but I suspect he also spends 5x what I do annually. It’s all relative.

    • MaggieBanks

      Agreed. And talking to my friends with significant debt is something I can’t fathom. Every calculation includes med school loans, etc. My perspective will never understand that one.

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