Personal Finance Ability Scores

I played Dungeons and Dragons in school, university, and for a few years here in Japan. For anyone who isn’t familiar with it, basically each character or creature in the game has their own attributes (strength, dexterity, intelligence, charisma, etc.). Some characters are better than others at certain things.

In personal finance I think we can also assign attributes to people. Some people are better at some of them. Some people have weaker attributes, some stronger. But as in D&D, you can improve your attributes over time.

I think the main personal finance attributes are:

• income
• frugality
• knowledge
• discipline

All four of these are important. You could almost say that you need to be okay in all of them to have good finances. Of course, great scores in one or more will really help, but a bad score in even one of these can devastate your chances of success.

INCOME

Income is pretty important. It’s a baseline that determines where you start the race.

A low score in income might mean that you struggle to pay the bills. An okay score means you can pay for the essentials and still have a little bit left over. A great score means that you have much more income than you need.

FRUGALITY

Frugality is basically a multiplier for income. It determines whether you can retire early on a low income, or waste every dollar of the $400 million you earn.

A bad frugality score means that you spend money on things that are neither necessary nor important to you. An okay score means you have control of your spending. A great score means you know exactly what is important to you and have locked down your spending on anything else.

KNOWLEDGE

Specifically, knowledge about money and investing. This only helps if you have a certain level of income and frugality. If you do, then knowledge helps you manage, keep, and grow your savings.

Lack of knowledge can lead to making mistakes or being taken advantage of. A decent level of knowledge means you will have some sensible strategies for your money. A great knowledge score means you know exactly what to do with your money and how to react to changing circumstances.

DISCIPLINE

In a way this is the key to everything. Discipline allows you to increase your income, resist the urge to spend money, and learn new things.

Poor discipline will see you waste opportunities, fail to implement plans, and give up when things get hard. Okay discipline means you can get things done. Iron discipline makes you an efficient machine, doing what needs to be done immediately.

​In Dungeons and Dragons, character ability scores range from 3-18 (some characters have bonuses or penalties that can raise or lower them). 3-7 is bad, 8-13 is okay, 14-18 is great.

Based on this framework, I think my current scores (not the ones I started with) might look something like this:

Income: 13 (my wife’s is slightly higher, so together we are in a good place)
Frugality: 15
Knowledge: 15
Discipline: 11 (+5 bonus when it is something I am interested in)

Ten years ago those scores would have looked very different.

How about you? What do your scores look like? Did you ever play D&D?