The New York Times has a great article we can all learn a lesson from. In How a Financial Pro Lost His House, financial adviser Carl Richards tells the story of how he got caught up in the go-go enthusiasm of the mortgage bubble and wound up buying more house than he could afford.

It’s an honest, introspective look at the types of feelings that were swirling around during those times. It’s easy to look  back and say the people that over-bought were stupid and deserve any hardships they encountered later on. But it overlooks one key element of decision making: our emotions. In my review of Jonah Lehrer’s book, How We Decide, it was pretty clear how our emotions can railroad our decision making.

Did Richards deserve to go through the turmoil and anxiety he went through? Sure, maybe he did. But the image of him standing in the dark looking back at his family in the house he couldn’t afford, wondering if he would ever get through it all…it’s hard to be so cold.

Let’s take a look at some quotes:

I have a friend who is going through a tough time financially. He has a high income, but is burdened by debt from a few real estate deals that went south. He continues to take fairly expensive ski trips. That would seem irresponsible in his situation, and maybe they are.

But I now realize that it is not that simple. Maybe those trips are keeping the guy alive, or saving his marriage or keeping him sane enough to work.

I have another good friend who borrowed against his house to pay for a therapist. Unless you were walking in his shoes you might think that was stupid, but it saved his life and changed his career. It ended up being one of the best investments he ever made.

The process of making financial decisions is about more than building a spreadsheet to calculate the answer, because life rarely fits cleanly into a spreadsheet. Our decisions often appear irrational until we understand the whole story.

This reminds me of my post on how financial responsibility can ruin your life. There are certain times in life where the best financial decision isn’t always the right decision for yourself. For example, if you want to have a baby and it’s your last shot, you should do it even if the math doesn’t quite add up.

You better come up with a solution to make it work, but I don’t believe you should sacrifice these types of “living life” experiences in the name of “financial responsibility.”

Then Richards goes on:

But it’s not that simple. At times I’m absolutely clear about what makes sense. Then ordinary life choices arise, and things can get cloudy. Should our children play sports that cost money? What kind of family vacation is O.K.? How much is enough?

These are issues we all battle with on a daily basis. I like that Richards isn’t hiding behind his title as a financial adviser and is telling it like it is. It may not be pretty, but at least he’s being realistic instead of just spouting off all the different financial maxims people “should” be adhering to in an ideal world.

We don’t live in an ideal world.