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What’s your rent? How much do you spend on groceries every week? How much do you contribute to your 401(k)? No, wait! What about your 409(k)? 409?…there’s a personal finance unknown…

Odds are, you have a pretty good idea what the easy answers are. You know your rent and how many bananas you eat every week.

But do you know about those cavities that are going to pop up next year? Ouch! Do you have an Outlook Event for “Furnace Catastrophically Fails?”

My point is: the knowns are fairly straight forward. But the unknowns in personal finance are the biggest sources of stress, loss, and negative outcomes.

Budget: the basic place to start

Budgeting is Step Zero of personal finance. Without a budget, you might not know where your money is going. Is your net worth growing, shrinking, how fast or slow, on pace compared to where it “should” be?

If you’re a frequent reader, you know the phrase that I have tattooed on my forehead: you can’t manage what you don’t measure. Measuring is an act of knowing.

Budgeting and tracking turn your personal finance unknowns into orderly knowns. And once you measure, then you can manage. In fact, I like budgeting so much that I bothered a bunch of other financial writers to let me know how they budget.

A simple and common downfall in personal finance is the overdraft. You have $70 in your Checking account and you use your debit card to buy $100 worth of blog-recommended books–so educational! Well, unfortunately, banks don’t like it when you spend more money than you have, and they penalize you for it. They charge you an overdraft fee.

Budgeting can completely eliminate this issue. If you know you only have $70 left, perhaps you choose to buy fewer books. Better yet, you choose to just go to the library. It’s probably a wise choice.

It’s the state of not knowing that leads to overdrafts in the first place. But there are bigger fish to fry.

You can predict the future

I peer into my crystal ball, and I see elves. Reindeer too. Wait a second…why does this crystal ball have fake snow floating around in it?

Christmas is coming. Or, whatever holidays you celebrate that might involve a spike in your spending. Since you know your holiday will be here eventually, why not begin preparing for it now? Christmas is actually kind of easy: we know it’s coming, and we even know the specific date.

There are other life events that we know will happen eventually, but we’re not sure on the specific dates. For me, a perfect example is replacing my car. Ideally, I’ll drive my 2012 Toyota for another 8+ years. But I’m aware that eventually it will kick the bucket, and I’ll probably buy another used Toyota at that time–a ~$15K purchase, we’ll say.

So I’ve been asking myself: should I spend ~5-10 years to slowly save that $15K, or would I rather urgently figure it out right after my current car dies? Clearly, the methodical saving plan would be less stressful and less risky. The “urgent need” plan has stress and negative impacts associated with it–what if I simply don’t have the money saved up for another car?

It’s another example of a personal finance unknown (in this case, the need date for the money) leading to a negative result. And why? Because long-term planning is difficult as-is, and it’s made harder when you’re lacking specific details. But it’s certainly not impossible. Just think about stuff that might eventually happen!

I use YNAB to help me plan for this in my budget. I’m already saving little bits of spare cash for home maintenance, car maintenance, and routine medical bills. In many ways, this is an extension of the emergency fund, except I’ve got a bit more control.

The emergency fund covers completely random events that I never saw coming–I’ll talk about these “black swan events” later. Comparatively, I use YNAB to help me save for the known unknowns–they’ll happen eventually, but I don’t know when.

Here’s a challenge for you: what are the top 3 future expenses that you know will happen eventually, but you’re not sure exactly when?

Student Loans

How many 27-year olds are sitting there–reading this, maybe?–and saying to themselves, “I know so much more about student loans now than I did at 17, when I actually signed up for them.” Why is that? How is that?

How can we have a paradigm in which millions of teens are signing up for five or six figures of debt, but then only understanding the magnitude of that debt after they’re years into paying it off? You know who thinks he knows that answer? Uncle Dave!

Ahh, Uncle Dave. While it’s nice to receive the occasional “Happy Birthday” or ALL CAPS MESSAGE from your Aunt Ethel, we all know that the true purpose of the Facebook comment section is for typo-riddled political arguments between tangential strangers. Where else can your Uncle Dave call your boss’s wife a “Russian pawn?”

Every time I see a Facebook story about student loans, I see someone’s Uncle Dave chime in and say: “In America, when you sign up for a loan, you pay it off!”

This argument has me very interested. I understand that Uncle Dave is a bastion of patriotism and moral standards, but I think he’s missing the forest for the trees here. So here’s my strawman decimation of Uncle Dave. To wit:

First: plenty of American organizations seem to sign up for debt and then fail to pay it off. Perhaps the 2008 crisis or General Motors’ bankruptcy would remind Dave of that? And plenty of American citizens get themselves into debt, and use bankruptcy as a way out.

You see? Dave’s a little mixed up. Bankruptcy exists so that people aren’t haunted by debt into their graves. But, as lawmakers would have it, it’s very difficult to file for bankruptcy due to student loans.

In fact, bankruptcy is so American that President Donald Trump has done it–not once, but six times! I assume that’s why I see people writing things like, “This President is completely bankrupt.” I mean, failing to repay a debt is seriously American!

Second: this isn’t a financial argument, but Uncle Dave’s opinion follows the illogical American (human?) tradition of turning up one’s nose at younger generations. First, the Flappers gatsby’d their way into the Great Depression. Then the hippies reefer’d the country straight downhill after the babies boomed. My millennial peers are all ultra-violent video gamers–seriously, I’ll fight you.

And if this category of teenage behavior starts with “dancing, smoking weed, and Grand Theft Auto for PlayStation4,” it’s only logical that Uncle Dave ends it with “borrowing $100,000 for the education that you’ve been trained into believing is mandatory.” Wait, that doesn’t really make sense…

Uncle Dave does have one point. In America, we do allow people to get themselves into huge amounts of debt. And I do agree that people should try to pay back what they’ve borrowed–but we should make sure to offer help.

But the point of this article is: how can we educate those 17-year olds that borrowing $20K is significantly different than $60K or $100K? How do we better inform people about the repercussions of their financial choices and shine light on the personal finance unknowns?

Uncle Dave’s argument skews towards, “Stupid kids. Don’t be so stupid.” But the real argument should be, “How in the heck do we let kids sign up for this deal? Who has got their Best Interest (ooo!) in mind?”

Uncle Dave’s Retirement

While Uncle Dave thinks he knows how to verbally kick some milliennial ass, the sad truth is that a lot of Uncle Dave’s peers are in a similar position to millennials. But instead of finding themselves in student loan debt, many Baby Boomers are finding themselves woefully unprepared for retirement.

The problem is easy to understand. When you start getting a steady paycheck, you finally have the money to buy the stuff you’ve always wanted. And then you get married, buy a home, and have kids. It’s easy to spend money on a spouse, a house, and–what’s a word for “kids” that rhymes with house?

Anyway, the point is this: there are a lot of places to spend money in life. And if you’re not looking into the future, the prospect of retirement savings can be an invisible dot on the horizon. Invisible and unknown. Or, as Roger Waters might say:

You are young and life is long and there is time to kill today. And then one day you find ten years have got behind you. No one told you when to run, you missed the starting gun.

It can be pretty disheartening to find that you’ve missed the starting gun. After all, there’s no better time to start saving than when you’re young. But what happens if you don’t know that? What to do when ten years have got behind you (or 20, or 30…) and you’ve got no savings to show for it? Talk about a source of stress and negative outcomes! What’s another ten years of work when you’re 65 years old? Gee whiz.

Beware of black swans

While you should steer clear of swans–they are vicious, vicious birds…like a Canada Goose with gigantism–the black swans I speak of aren’t real animals. A black swan is a completely unforeseen event, typically one that leads to significant consequences. Did I already mention 2008?!

How could someone have planned for the 2008 financial crisis and crash? How would they have seen it coming? Some of you readers worked and invested before 2008–did you see it coming? Or did it attack you like a vicious, vicious swan?

While 2008–or the next stock market crash–might not have been the black swan that took you down, I do think that black swan events frequently lead to personal finance downfalls. Your car catches fire. Your house catches fire. Your dog catches…a fight…with…a vicious, vicious swan. The vet bills can be outrageous!

But how do we shield ourselves from something that–by definition–is unpredictable, unforeseen, and incredibly infrequent? What do we do when emergency strikes? Why, we tap into our emergency fund! Quick excerpt:

An emergency fund is a pile of money, plain and simple. Some people suggest it should be at least $1000, enough to cover a sudden car repair or new water heater. Others think it should be 3-6 months of living expenses, in case you lose your job and need to find another. Either way, the emergency fund money just sits there in your bank account. You aren’t spending it. You aren’t investing it. It provides a tiny bit of interest (probably), but provides no utility (most of the time). But—and this is a HUGE but—when an emergency fund is needed, its importance cannot be overstated. It might keep your children warm when the furnace dies mid-winter. It keeps the family fed and clothed when the factory lays you off. It’s the buffer between smooth sailing and impending disaster. It’s a safety net when life throws you the worst kind of curveball.

When a vicious, vicious black swan comes biting your way, pull out some of your emergency fund and slap its beak off!

Known personal finance unknowns

A black swan’s unpredictability makes it an “unknown unknown:” not only do you not know about it, but there’s no way you ever could have known about it. But there are plenty of ideas that are known, yet you and I might not know about them. These are known unknowns.

For example, plenty of people look at their first credit card as “free money.” In fact, they might still see it as free money while they make their minimum monthly payments. But once that payer sees they’be made $1000 in payments for a $400 TV, then the realize the harsh truth that is a 19% APR.

Plenty of people know the dangers of credit card debt–the knowledge is out there. But for this unlucky Panasonic-owning VISA customer, it was a personal finance unknown. Next thing you know, you credit card simply gets declined.

Similarly, there are common uncertainties that cloud investing and taxes and all sorts of personal finance topics. What’s the difference between a 401(k) and a Roth IRA? Should I take a raise, even if it bumps me into the next tax bracket?

I’ve asked questions like these before. And I see them asked every day on Quora and Reddit. And I think it’s phenomenal that those questions are being asked, so long as people are turning their personal finance unknowns into knowns.

Financial education > personal finance unknowns

I’m not an expert. But I know what it feels like to not know, then seek an answer, and finally to close the loop. I really like closing that loop. I write here as part of that process. In another shape and form, I call it “boat-building.”

Like many people–many of you, too, I’d guess–I have a fear of the unknown. Did I turn the oven off? Will I overdraft my checking account? Could a bevy of swans kill a full grown man?

But financial education is the key to alleviating many of the personal finance unknowns that I describe here today, or the many other unknowns that I haven’t touched on here. Unfortunately, personal finance education is not a part of many common educational curricula. Instead, one has to find information on their own–thank goodness for the Internet!

Personally, I’ve learned a lot scouring sites like NerdWallet and the tomes of Reddit’s past. There are millions of people just like you–just like us–who are trying to learn by feel through murky personal finances. What do experts think? How did prior success occur? What are the most well-respected books on personal finance?

Homework: what don’t you know?

If you’re looking for a takeaway today, it’s this: think hard about your personal finance unknowns, and find a way to figure them out one by one. Google is your friend, and there are lots of people out there willing to vet what you’ve learned. Heck–run it by me! I love to field questions.

In my opinion, 95% of personal finance information is pretty easy to pick up on, but takes a little bit of homework. It’s neither rocket science nor common sense. It’s somewhere in between. The remaining 5% tends to be so obscure that it probably won’t matter to you anyway.

If you spend a few hours a month attempting to fill the gaps in your personal finance unknowns, you’ll be amazed how much you know one year from now. I can certainly attest to that.

Thanks for reading today’s Best Interest. Consider filling in your personal finance unknowns by subscribing–you’ll get new articles emailed straight to your inbox (no spam or junk). Watch out for that swan!

-Jesse Cramer