Is Personal Finance Your Personal Nightmare?


So you don’t really enjoy planning a budget? Is personal finance not necessarily your cup o’ tea?

Well, I have good news and bad news for you. Let’s start with the bad.

The bad news is that just because you may not have a hankering to do something, doesn’t mean you shouldn’t do it. Just because you don’t like (maybe you even hate!) planning a budget, doesn’t mean you shouldn’t do it. Frankly, in this day, you can’t afford not to budget. Sorry for sounding so cliché, but that’s the bare-bones truth.

Consider the person that doesn’t enjoy exercise. Does that mean they shouldn’t exercise? Heck no! It may mean they need to find some type of exercise that is doable for them over the long-term, on a consistent basis.

So it is with personal finance; and budget planning comes in there as the most important of anything you do regarding personal finance. It is the foundation. It is your rock. It is the tree from which all personal financial fruit blossoms and grows. It is vital.

To stick with our exercise analogy: if you want to get really lean, really buff, really trim, then you hit the gym and you exercise. You also really need to focus on your diet and the amount of rest you get. It’s a multi-pronged attack to get to an elite level of fitness.

So it is with personal finances. But you don’t necessarily need to be elite with your finances. (Although I would make a strong argument that “average” with your personal finances these days wouldn’t be such an achievement – most everyone’s not doing so hot!) You can choose to be “in great shape” financially.

Let’s say you decide to “get in shape.” Does that mean you’re going to have to use the multi-pronged approach (exercise, food, rest) of the elite athlete? Nah. But which one would you most certainly focus on of the three? It’d be the exercise. Granted, you’d see some results from addressing eating habits, or from getting better rest, but the highest return for the time spent would definitely be found with exercise.

So it is with planning your budget. Personal finance is indeed personal, so I’m going to talk to you a bit about the “Good” news I mentioned earlier.

You don’t need to spend hours a day budgeting. You don’t need to even spend a half hour a day budgeting. I don’t want you even spending a few hours per week budgeting.

You’re not one of the weird ones, remember? You don’t like this stuff. So – like the person that prefers not to exercise, you’d prefer to do just about anything else when it comes to budget planning. The trick is to do it like a band-aid — fast.

You need something simple and easy to manage your money. You need something bare bones – stripped of all the bells and whistles (that aren’t used too often anyway, even be the weirdos) commonly seen in personal finance software.

You can budget quickly and efficiently if you just follow these few steps:

1. Track what you spend.

Don’t wait more than three or four days between recording what you spend. It gets infinitely harder to be faster when you’ve waited a long time to record something.

I can hear it now as you look online at your debit card transactions:

You: “Wal-mart. Honey, what’d we buy at Wal-mart last week? The total comes to $84.52.”

You: “Okay…I’ll just uh, put it under miscellaneous…”

This happened to me just the other day. We had a charge for $6.17 from the university and I could not for the life of me remember what I had bought on campus for six bucks. (It came to me about a week later – it was a T-shirt).

Having long delays between entering transactions just makes it tougher and more time consuming. Do it consistently, not more than every three or four days.

2. Do your budget planning monthly.

It doesn’t need to happen more often than this, but it certainly shouldn’t happen any less often. Treat the month as its own new “budget” in a sense. You just ask yourself, “Okay, I have X amount of money in Y category. How much do I need to add to it this month to get the balance that will be needed?” It’s as simple as that (so why Quicken and Money don’t offer this functionality is beyond me).

Do this! Your money will thank you.