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Why Learning Maths is an Essential Part of Organising Your Finances

From Yann, published on 31/03/2018 We Love Prof > Academia > Maths > How Can Maths Help You Manage Your Money?

Did you ever wonder why maths was so important in school?

Mathematics and other scientific disciplines seem to be national curriculum royalty, with a good grade in GCSE maths being championed by many universities and workplaces. Make sure to study hard for maths revision GCSE.

But what are the uses of math in real life?

Are mathematically-minded people necessarily more intelligent?

Are they more successful?

You could be incredibly talented in subjects such as music and literature but be stumped when it comes to maths.

However, learning maths will give you an advantage in managing your finances.

So, let’s find out how good knowledge of maths can help you understand money and improve your budgeting skills!

Whatever your age, you’ll have noticed that when it comes to maths, there are two types of people: those who love it, and those who hate it.

If you still hate maths long after graduating and have nightmares about never-ending polynomial long division or all the theorems you have to memorise, we assure you that it doesn’t have to be like this.

French screenwriter Olivier Peyon made a documentary named ‘How I Hated Maths’, which explored our perception of maths and the common distaste for the subject.

However, in the report he worked to simplify certain problems, using his creativity rather than, as he called it, rigidity, to find an answer.

Mathematicians are always the first to say “don’t believe in any authority, just check your answer for yourself”. Maths exercises at school and in everyday life we use numbers for proof.

Maths as we know it and the idea of freedom shared among mathematicians is a bridge to starting the discussion of budgeting.

Financial freedom begins when you escape the grasp of your money, and this can only happen by controlling your budget.

So how should you look after your money and budget using maths? Can supplemental maths lessons help?

In the film Moneyball featuring Brad Pitt, director Bennett Miller tells the true story which is captivating, to say the least. At the centre of the film is a software with precise data and statistics which causes chaos in the market for baseball players.

Billy Beane, the general manager of Oakland Athletics, hires a young graduate to help him in his search for an IT programme containing the details of each and every performance of every US baseball player.

This was big news when it happened. At the time, Oakland was the equivalent of a champion’s league team in football. The software allowed them to hire under-valued athletes for a cheaper price.

Mathematics is inescapable in day to day life, so use it for your own benefit You find it in sport, IT, and technology. Maths really is everywhere! ¦ source: Pixabay – Photo-Mix

Sometime later, Oakland beat the historic record of matches won in a row by a club.

Whether it’s at school, in sport or in your day-to-day life, maths really is everywhere!

Managing your budget, saving money, and requesting a loan are all to do with maths. With each aspect, there are estimations and allowances to make, tax to calculate, interest to add, the list goes on! This is exactly why a good command of maths is useful for finance.

School teachers teach you maths as a child, and you carry those skills with you for the rest of your life.

Learn Maths to Boost Your Understanding

Maths doesn’t only help you make sense of how numbers relate to each other, but it also can help you make sense of and manage your financial situation.

We start to develop our maths skills from an incredibly young age, and the basic knowledge of numbers and values gives children the tools to go further, discover calculation and geometry.

Maths plays an enormous role in day-to-day life. Each and every business needs maths to avoid a state of chaos. With maths, you can construct buildings and build roads as well as efficiently manage your personal budget.

This starts from infancy, where babies are able to recognise differences in value. This gives us the tools to tell the difference between a £1 coin and a £20 note as well as eventually manage the money in our bank accounts.

And what about arithmetic?

Addition, subtraction, multiplication and division. These are the basic skills which come under the title of ‘arithmetic’, and the ones you will use most once you leave the education system.

To know where you are with your money each month, you should set a budget. To do this, you should work out how much money you need for your accommodation, the weekly food shop, summer holiday spending money, and how much you need for clothing, amongst other things.

Maths is more than essential when it comes to your money, as it helps you avoid overspending and having to ask to borrow money. Without mathematics, you risk not being able to put enough money away for the future or agreeing to a shoddy interest rate at the bank, for example.

How Maths Can Help Gambling Addicts

Two researchers from a polytechnic school in Milan have been giving maths lessons to gambling addicts to help them understand the risks they are taking.

In 2012, the annual Health Survey for England concluded that over 60% of adults had gambled in the past 12 months.

But there is more to this.

Researchers explain that the understanding of probability is an effective way of avoiding addiction. Learning about logical thinking and risk is a recommended escape route for gamblers.

The hard facts of maths can shock and bring people back to reality Understanding risk can minimise the trouble caused by gambling ¦ source: Pixabay – fielperson

By taking maths lessons, you learn to make sense of the chance you have of winning a game.

For example, you have as much chance of winning the lottery as you have of choosing a red football blindfolded from a pitch of 600 million white ones.

Knowing that around 3 in 5 people have risked their own money in the past year by gambling, you should be able to appreciate how maths is useful in assessing risk.

And, as we keep mentioning, maths is everywhere!

Maths vs State of Mind

If you find maths useful in managing your money, having a negative state of mind can destroy this in just a few days.

You may be brilliant in your maths lessons, however, if you act impulsively, you risk harming the health of your finances.

If you spend all of your money on anything, you are living above your mean

Impulsivity is a psychological issue.

A negative mindset can harm progress when it comes to study skills and maths revision.

If you don’t know why you are buying something, then there is a problem.

If you regret a purchase the following day, there is a long-term danger of needless spending becoming a habit.

If at the end of the month, you are struggling financially even when you are able to use maths to understand your spending habits, then there is a problem.

Even maths teachers can have money problems. Why? Because when you neglect the psychology of spending money, you ignore the need to control your spending.

Let’s take advertising as an example. Are you under the impression that adverts and campaigns don’t affect your spending habits? Do your friends and colleagues also insist that they are unaffected by advertising?

In reality, advertising continues to develop and play a part in our lives, even if it is unwanted, and this is for one simple reason.

Adverts play to our egos and flatter us in order to influence our behaviour.

Maths gives you the hard facts of situations, meaning you can measure where you are focus on facts and be realistic about your spending ¦ source: Pixabay – stevepb

So how should you avoid giving in to temptation and better manage your finances? The best method is to approach your learning of maths with a positive and open state of mind.

The part of your mind that manages your money grows with small gestures. This starts by taking ownership of your actions and establishing self-control when it comes to your spending.

By maintaining a good frame of mind, you will be able to help yourself better manage your finances with maths. However, even if you have a good command of maths but a negative mindset, inevitably you will be at risk of falling into difficulty.

Unsolved Maths Problems

Mathematics is an infinite discipline, are there remain many unsolved math problems.

The Clay Mathematics Institute of Cambridge, Massachusetts have 7 ‘Millennium prize problems’ with a reward of $1 Million for whoever produces an answer to any of them.

That’s $1 million for each unresolved mathematical problem! There are 7 prizes for 7 problems on important issues that have never been solved.

How about that for good management of your finances?

Of course, we are only jokingly suggesting that this is a way to avoid financial trouble.

But what if learning maths could help you get out of debt?

Understanding mathematics and having a positive mindset helps you intelligently manage your money.

There are two very simple ways to ensure healthy finances in the long term:

  1. Don’t spend money you don’t have and live within your means
  2. Invest early enough to ensure a good pension when the time comes for you to retire

It’s true that freedom begins when you are no longer a slave to the money, however, don’t forget that freedom comes with education and applying the skills you learn.

So, get out your textbooks and get to work!

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