I want to share a couple of quick stories about two people and their very different approaches to money.
While their approach to money management might differ, they share one important principle. In fact, every financially successful person follows this principle.
Do they both use the same financial management tool? Ok, I love to talk tools, but that’s not it. Some people use napkins to jot down a quick budget. If you’re a regular reader of our blog, you’ll know that many of the most financially engaged people use spreadsheets. Others use apps. Use a tool that works for you.
How about their money management workflow? Nope. There’s not a “right” workflow for everyone. I love talking to people about their money workflow, and there’s much to learn about how others manage their money. In fact, I’m regularly inspired by the workflow others use, and I’ll incorporate bits of their best practices into my own financial workflows, but workflows are personal. What’s right for me might not be right for you.
Financial success with this one simple rule
So the secret principle that unites the most financially engaged? There’s a hint. Engagement. Yes! The most financially engaged people are engaged. They are in the game. They’re opening their mail. They’re paying attention. They’re noticing, observing, and watching their money.
It’s not an obsession. Far from it.
Carl Richards recently shared a fantastic radio blog about the way he and his wife manage their personal finances. Carl is a big Tiller fan, but that’s not the point. I love their story because they stay engaged by looking at their total spend, each month, and discuss it together. It’s not the nitty gritty detail. In fact, they don’t fuss with categories. They’re only looking at the big picture: how many total dollars did we spend this month. It’s fodder for a great monthly conversation as a couple. They’re engaged, and it works for them.
The second quick story is about my mom, Dinny. She is the opposite. She digs into the details. For decades, my dad has been the one to manage their finances. Recently my mom started to take some of that burden from my dad.
She uses Tiller to view all of their accounts, and she’s constantly looking to see what subscriptions they can turn off, what charges she doesn’t understand, and how she might reduce the home insurance bill, which looks large to her. She’s in the details, and it puts her in control in a very productive way.
What makes us uncomfortable can help us grow
What do Carl and Dinny have in common? They’re engaged in their finances! Their workflow couldn’t be more different. Dinny is at the 100-foot level. Carl is at the 35,000-foot level. Both are paying attention to the things that matter to them, and both sleep better at night because they understand and are in control of their finances.
Being engaged doesn’t mean having the answers, but it does mean asking questions, paying attention, and digging into the numbers.
We are wired to resist the things that make us uncomfortable.
“I don’t want to open my bank statement because I don’t know how I’m going to pay off that credit card bill.”
That’s a natural response, but it’s also a downward spiral to financial doom.
What if we instead said:
“I am opening that bank statement because I want to know about the credit card bill I need to pay. Opening this bill doesn’t make the problem better or worse, but it will keep this front of mind, and it may give me a fresh idea for how I’m going to achieve my goal of getting out of debt. I’m not going to beat myself up for this because that’s counterproductive. Instead, I’m staying engaged. I’m opening my mail. I’m even going to forgive myself, and I’m going to believe in myself too. I know I can figure this out. Maybe not today. Maybe not next week, but if I stay engaged, I can figure this out. I can reach my goals. I can do just about anything if I stay engaged!”
So that’s the rule. You have it now. Your daily financial elixir: stay engaged. Do this and everything else will come more easily.
What can you do today, for five minutes, to keep engaged in your money?
Great. Now close this browser and get to work! Go get ‘em!