The Simple Economist’s Guide To Cash Flow Planning

I think it would surprise most people how little time my family devotes to planning our spending. Most of our processes are currently automated and we really only discuss money during occasional unique situations. When we teach financial classes people often ask us about the specifics of how we manage our money. They want to know details about how we spend, budget, prioritize, and automate. The process seems daunting at first, but with a little bit of set-up, it almost runs on its own.

cash flowMany years ago we put together a little system and we have been using and tweaking it for years. At this point, we only spend a few minutes each month planning, talking, organizing, tracking, and thinking about our money. Almost everything is automatic. Saving, Giving, Investing, Tracking, and Planning are all done automatically. Setting up the simple system was really about thinking through three basic concepts: Prioritize, Automate, and Commit- then Repeat. That’s it. Money doesn’t have to be very complicated. We have simply chosen to organize our money so that it is in line with the important parts of our life. Continue reading The Simple Economist’s Guide To Cash Flow Planning

Broken Systems: Why We Continue To Fail

Failing at something is not very fun. Failing at the same thing over and over is maddening. But almost everyone I know, myself included, has a certain area of life (or more likely areas) where we constantly fail to live up to our own expectations. We tend to have great intentions, but rarely meet even our own standards. When we try to make changes in our lives we often look at the specific symptoms of our problem, yet fail to account for the broader context to the challenges we face. We like to focus on individual items, but we must understand that our lives are built around systems.

Businessman Filing InformationWe all have systems in our lives. We have a connected set of activities and routines that we perform on a daily basis. Whether we analyze it or not, we have systems for many things in our lives. How you get ready for the day is a system. There is a constant set of actions you routinely do to prepare yourself for the day. They may be quite efficient and thought out, or it may be rushed and anxiety inducing. Constantly leaving the house late and feeling stressed getting ready is likely a symptom of a failed system rather than a preferred outcome. Often, our intentions are good. We may even have a nice goal in mind. But we rarely take the time to set up full systems that put us in a position for success. Continue reading Broken Systems: Why We Continue To Fail

Giving Away All My Books and Reading More

I truly enjoy reading. A great book is an awesome way for me to relax, be entertained, or learn something life changing. I enjoy reading other peoples’ work much more than I do writing my own. And I like books. Or, at the very least, I enjoy the content that they contain. One of the few problems I’ve had with books is the space they occupy. At various times in my life, the physical collection of books I’ve owned has taken up shelves upon shelves (or later boxes upon boxes) of space. I don’t really bask in the aesthetics of a large library or book store, but I enjoy having access to my favorite books at a moments notice. Traveling and moving are the times when I typically notice the volume of books that come in and out of my life.

book clutterI enjoy reading but I’m not a big fan of clutter. For some reason, books were one of the last vestibules for me to give up when relentlessly evaluating the objects I own and store at my house. So, I decided to give away almost all the physical copies of books that I own. The mental decision was much easier when I realized what I enjoyed was the content in the text and not the bound collection of paper on my shelf. There are only a few books I really want to own and that I will constantly reread. For those, I have a special place that contains just a handful of books. I’ve also been slowly purchasing digital copies of many of my favorites over the years to complete my small collection. And I have a library card. Where I live, that is a pretty incredible, often underutilized, resource. Continue reading Giving Away All My Books and Reading More

Get Off The Couch & Do Something: Battling Inertia

I’m Guilty. The articles that are often the hardest to write are the ones that make me look in the mirror. And I’m guilty. I’m guilty of letting inertia get the best of me. I would like to think that I’m pretty good with my time, energy, and effort- but often I find that I can get lazy. Or at least inefficient. I find that I tend to do the same things over and over. I get quite comfortable with my routines and the products and services that I use most often. I don’t even dislike change. However, the minimal amount of effort that change requires often necessitates a battle with inertia. For anyone who hasn’t thought about science since 4th grade (myself included)- Inertia can be described as resistance to any change in the state of motion. In essence, we tend to keep doing the same things over and over unless an outside force changes our direction.

lazy manAs humans, we have a tendency to gravitate towards comfort and consistency. Even if things are pretty bad, we’ll continue to do them due to laziness or fear of change. It is even worse when things are ok but could be a lot better. I tend to fall in that second category. I get complacent when things are going well but could be better. When I’m saving and spending with plenty of margin I don’t worry about change. When work is going well I don’t think about honing my skillset. When my life and marriage are good I don’t often think about better.

Inertia happens all the time in areas of our personal finance. We often continue to make inefficient decisions with our money and fail to take any action. Here are some of the more popular activities where inaction can be expensive. Continue reading Get Off The Couch & Do Something: Battling Inertia