I want to share an approach to money followed by every financially confident person I know.
It’s not the tool they use to manage their money. Some use apps. Some use paper. Most use spreadsheets. Use the tool that works best for you.
How about their money management workflow?
Nope. I love talking to people about their money workflow, and how they 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. There isn’t a “correct” workflow for everyone.
One simple rule for financial success in 2023
So the secret principle that unites the most financially confident people I know? Engagement!
The most financially engaged people are engaged. They are in the game. They’re reviewing their expenses. They’ve thought about their budget categories.
They’re paying attention. They’re noticing, observing, and watching their money.
In financial planner Douglas Boneparth’s recommended newsletter This is the Top, he writes:
“Most people have no idea where their money goes or how much they need to support their lifestyle, which is why they panic at the threat of disruption to their income. But when you’re organized, you can make the most of what’s coming in, avoid costly mistakes, and have a greater sense of control when things change.”This is the Top
Some people prefer to engage with their finances at a high level rather than looking at the nitty-gritty details. They review their total spending each month. They don’t fuss much with categories. They’re only looking at the big picture.
Others, like my mom, are the opposite. They dig into the details.
She uses Tiller to view all of her accounts. She’s constantly looking to see what subscriptions she 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
Either way, financial confidence and success requires engagement. Being engaged doesn’t mean having the answers, but it does mean asking questions, paying attention, and digging into your 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!