Training wheels: Why I spend less time managing money
Posted
May 09 2008, 09:52 AM
by
Karen Datko
Rating:
This post comes from Trent Hamm at partner blog The Simple Dollar.
When I first went through my financial meltdown, I was almost obsessive about my various accounts.
I checked my credit card and bank balances daily, kept careful notes on every penny I spent, and planned and plotted every single expense. The giant budgets and debt snowballs and investing plans I created were amazing in their detail. I spent hours with Excel, calculating my financial life and seeing the implications of every little move I might make.
Over time, though, something fascinating happened.
I stopped checking my balances every day. I slowed down my use of Excel, opening it only to answer a specific question I'd come up with or to model something for The Simple Dollar. I didn't sweat every penny on every receipt anymore.
In short, I began to trust myself. I had seen the results time and time again of my good financial behaviors: My account balances went up and my debts went down. Eventually, I began to trust those principles, and that trust led to a reduced need to keep running the numbers and micromanaging everything.
The transition was much like taking the training wheels off a bicycle.
Finding balance
Back in the bad old days of crazy spending, I was like a child who couldn't balance a bicycle. Eventually, I realized what I needed to do, but I needed some help learning the right balance -- I needed training wheels. Then, after some practice, I took the training wheels off. I knew intuitively what behaviors to use to keep my balance, and the constant reinforcement wasn't worth the time anymore.
I'm not saying that the training wheels of budgeting and careful planning are wastes of time. They're not. The experience of carefully tracking my balances and creating various debt-snowball models brought me a deep understanding of what the good and bad life behaviors are.
Budgeting tools were more useful in teaching me good behaviors than revealing any deep financial truths. I already knew I was in a lot of debt and wasn't in very good financial shape. The planning and daily effort showed me that making wise shopping decisions resulted in more money in my checking account at the end of the month, and that many months of this behavior resulted in breathing room if bad things happened.
I encourage everyone who is in debt trouble to gather as much data as possible and pay attention to everything very carefully at first. Riding the bicycle of financial freedom can be hard, and if you find yourself continually crashing, it's worthwhile to strap on the training wheels.
But if you find yourself continually spending far less than you earn, and budgeting begins to feel like a less effective use of your time, don't be afraid to back off a bit and unhook those training wheels. Once you've incorporated the principles that work for you into your life, you'll find that you can go along just fine without that support, riding into your future with the wind at your back.
Other articles of interest at The Simple Dollar:
"Is an all-cash lifestyle useful for kicking the debt habit?"
"Taking the leap into entrepreneurship: Where is that financial safety net?"
"The life map: Connecting your daily activities and spending to your lifelong goals and dreams"
