CREAM is Overrated

“But I’m still depressed, and I ask: What’s it worth?
Ready to give up, so I seek the old Earth.” - Inspectah Deck, C.R.E.A.M. (Cash Rules Everything Around Me)

“Money can’t buy happiness.” You may say it’s common knowledge, but one look at typical personal finance advice, you wouldn’t get that impression. Whether it’s influencers, Reddit advice, or even regular discourse with friends, most people only focus on the numbers. Post-tax income. Savings rates. Investment returns. On and on.

Take a few seconds to think about it, and it runs against common sense. It also runs counter to the best practices of financial advisors. The best ones all factor aspirations, values, and feelings into the plans they provide clients, not just the cold math of savings and compound interest. A few advisors even get certified to do therapy alongside giving financial advice, showing the intimate connection between managing money and how we feel.

So how did personal finance advice get so out of whack?

In this post, we’ll talk about why focusing on the numbers in personal finance is so seductive, what it gets wrong, and why it matters. For brevity, let’s call it the CREAM (Cash Rules Everything Around Me) approach, named after the famed Wu-Tang Clan song. We’ll end off with how to do things differently.

CREAM Is Good

Let’s first give credit where it’s due. Some people know nothing about money, so the CREAM approach gives them the Finance 101 they need to get started. This idea makes sense and needs no further explanation.

The popularity of CREAM goes beyond that though, finding supporters in even seasoned experts of personal finance. There’s something irresistible about reducing managing money to rules, flowcharts, and spreadsheet math.

For one thing, the benefits are straightforward and verifiable. $1 invested today can become $10 by the time you retire, so why not save and invest all you can? Not only is this claim magical in itself (free money!), you can verify it with some simple math: compound 7% growth over that 35 years, and you get ~10.6. You can then cross reference that figure with S&P 500 returns and see that this type of growth isn’t unrealistic either. In a world of deepfakes and AI hallucinations, there’s nothing fake about compound interest.

For another thing, tracking your progress is easier than ever. Almost all of our transactions are now tracked digitally through bank accounts and credit cards. With some basic setup, you can see your spending, investments, and net worth free of charge. You can also easily download this data yourself and track them on your own spreadsheet.

Finally, it’s easy to push on social media or websites. If you can ignore the messiness of individual circumstances, you can give blanket recommendations to everyone. This is perfect for responding to anonymous people on Reddit, creating content as an influencer, or writing static content. You don’t know who you’re talking to, so you have to be as general as possible. What better way than sticking to the part which applies to everyone – the math?

These of these factors lead to CREAM being the dominant understanding about personal finance. People may recognize that money isn’t the end-all-be-all to life, but they end up keeping this idea in a separate box. Personal finance to them is all the “responsible” and “objective” stuff related to the math of money, not the emotional stuff.

This approach can work fine if you’ve never wanted something you had difficulty affording. It’s also OK if you never have anyone else to consider besides yourself. For the rest of us though, sticking to CREAM is quickly going to run into problems.

CREAM Is Bad

To understand why, let’s start with the definition of personal finance. Academic word-smithing aside, we can all agree on a few things. First, personal finance is about managing money – tracking it, moving it around, etc. Second, the point of managing money isn’t to manage money; the point is to do something with it: spend it, donate it, even stare at it (I’m not judging). Money is a means to an end, not an end goal.

This is where CREAM fails us. Stare too hard at the numbers, and you forget that numbers aren’t the point; getting what you want is the point.

As the age old business saying goes, what gets measured gets managed. The dollars and cents get measured, but what about your feelings? Do you track how many days you woke up hating your job? Do you remember how much you beat yourself up on a guilty purchase? The likely answer is no. When you look back on your finances, the only report card you see is dollars and cents, and that’s why you use it to judge your success or failure.

Going too far down this path is its own brand of toxicity. Pity the people who stick to a job they hate for the money, the people who beat themselves up over unused Netflix subscriptions or a 3$ coffee, or the people who feel terrible about wanting more than the bare minimum for big events like their wedding.

Fortunately, this doesn’t describe everyone. Our feelings unconsciously drive what we do, so many of us can find a healthy balance on our own. Some of us can even laugh at our rationalizing, calling it “Girl Math” or something similar. As long as you’re not actively bankrupting yourself, this is a healthy approach to both money and life.

Things get a bit more complicated though when you add someone else. All of a sudden, someone else is judging your choices, and you’re judging theirs. Many times, one person thinks an expense is warranted, while the other does not.

In the CREAM world, there’s only one right answer: more money. If you’re spending more, it’s bad. If you’re spending less, it’s good. This leaves no room for compromise. The person who thinks the purchase isn’t justified is always right, while the other person is always wrong. Of course, both people disagree on what expenses are justified, so sticking to CREAM results in a tit-for-tat argument which gets people nowhere.

Escaping this death spiral starts with accepting a simple truth: any money decision doesn’t require a justification beyond “I want it.” The only question is how much you want it vs. everything else.

CREAM Is Not Enough

But wait, you say. Feelings can be fleeting and irrational. Are you saying we should just manage our money on vibes alone?

Not quite.

Money math is still important. Tracking our finances keeps us attached to reality, and saving for a future where we don’t have to work is just common sense.

The point is to see the forest through the trees. Getting what we want is the point of personal finance, and sometimes what we want can only happen now, not in the far future when we’re ready to retire.

There’s a finer point here too about tracking how we feel. It’s true that our feelings change often. It’s also true that we’re bad at remembering how we felt in the past and even worse at guessing how we’ll feel in the future. The focus on CREAM protects us against our own stupidity and the world’s uncertainty to some extent, but it’s not enough. Moreover, the solution isn’t even complicated.

It’s as easy as tracking feelings over time alongside your numbers. Just assess how you feel along a few standard axes of personal finance (your career, spending, etc.). This way, you give emotional context to the numbers you see in your history. Let’s say you see your income steadily increasing over time. If you see that your happiness with your career is improving over time as well, then you’re in good shape. If you see that you hate your life more and more though, it’ll color the numbers in a different light.

Not only will this information help you make better choices, it’ll also make conversations with your others easier. It starts your discussion with the end goal–what you want–and it lets you work backwards together from there. Starting from the right place usually means ending in a better place.

Final Thoughts

As we’ve seen, the CREAM mindset has its time and place, but using it for everything related to money will quickly run you into trouble. It takes looking beyond the numbers and into how we feel that we can actually “win” at personal finance by getting what we want. This doesn’t mean ignoring the numbers, but it does mean valuing how we feel equally to the numbers. At the end of the day, we aren’t robots, so it’s better to get ahead of this by being emotionally intelligent with money rather than try to bury it.

From this perspective, valuing how you (and your partner) feel could be the most rational thing you do.