There just isn’t any way around it. No matter how you earn, invest, slice, dice and spend your money, one financial fundamental will hold true: you have to track your finances to achieve and maintain financial success. PERIOD. It’s the plain and simple truth—no exceptions. Don’t cry….yet.
Something I (really) like to (hear myself) say is, “When it comes to money, calories and golf, we take a F-load of gimmes!” If you don’t track your personal spending and income—yes, like with a computer—then you will likely fail to uncover the essential information required to achieve enduring financial success. Unless, of course, you make more money than you know how to spend…and if that’s the case…stop reading this blog and go buy another island.
I assure you that you can’t “use your gut” or “feel” your way around this. Annnnd yeeeees, I agree, this is not uniquely groundbreaking advice. Still, the reason we have to do the “tedious” work of tracking our finances, is to glean the information we need from the results of this work. This information helps us identify things like net results, spending habits, quality income sources, and a host of other stats which enable you to better run your financial life.
Don’t freak out yet. You can likely outsource the tedious part, and then hire a psychic to interpret the results. See…easy.
Now to illustrate my point a little, let’s pretend you’re relaxing in a hot tub at some swanky ski resort in the Alps. A respectable looking Swedish hipster hops in next to you and randomly asks you to invest your hard earned money in his business…what questions might you ask? Obviously, you’d first inquire, “Well, what does this business do?” and “how much money do you charge for the product?” Easy for hipster dude to answer.
But then you follow up with, “Ok, but does it actually make a profit as well? How much does it cost to create the product?” etc, etc. And let’s say the Swede’s answer to those questions was, “I don’t know dude…we never really bothered to keep track of any of that shit…money tracking is so boring!” Then you would be like, “You’re an F-ing idiot, get out of my hot tub now.”
If this reaction makes sense to you, then why in the world would you expect your parents (or perhaps a stranger, or a bank even!) to give you money for your business, or house, or (insert good investment) if you don’t do the same?
Ironically, the bank will give you some money for the house, but it won’t be as much as you want. And the only reason they’ll agree to do it is because they reserve the right to kick you out and sell the house if you screw it up. Banks are smart.
Anyway, I really do credit much of my success to consistent money tracking. There is actually a widely accepted term for this process…it’s called “Bookkeeping.” Yeah, yeah, I know…beekeeping is for businesses. Well guess what? SuuuuurPRISE! You are running the most important and influential business in the world: THE G-DAMNED BUSINESS OF YOU!
(Ok I’m calming back down now.)
The truth is that, initially, most of my knowledge about running a business resulted from me hiring myself to run the business of ME. Seriously, I gave myself my first job of “running a business” fresh out of college and up to my eyeballs in debt.
It was this experience that I eventually drew from to run someone else’s business, and then to start my own business. And then invest in real estate and be able to make sure it all wasn’t just a house of sub-prime-loan cards, waiting to crash down around me!
So, you’re now saying, “Cool Joe, but the title of your post indicated you would provide a solution for the problem of me not liking to manage my finances. Is there some way around this crap?” Good question, and no there isn’t any way around doing your bookkeeping. BUT it’s so important, that if you won’t do it, you need to find someone else to do it. Here are some options…and i’m being serious….
1. Marry someone that has good financial skills
2. Pay me, or someone like me, to do it for you.
You might think i’m joking, but i’m dead serious. I actually believe that you should consider your financial future when selecting a mate. (I can see your eyes roll from here.) I’m not saying it’s the ONLY thing to consider, or that you should forgo love and all that! But, if you are not good with money, I would highly prioritize that in your mate selection process. (Yeah..your parents were right about that.)
If you can’t get your head around that concept, then you should seriously consider paying a service to do bookkeeping for you. I know it seems like something only the “rich and famous” do, but having a financial coach will likely save you everything you spend (on them) and probably far, far more!
If you don’t track to your income and expenses, you WILL OVER-SPEND on stupid crap. And unless you have enough income to greatly outweigh that excessive spending, you will suffer significant consequences. It’s the plain truth of math.
Similarly, if you don’t count your calories, you will eat more calories than you burn, unless you outweigh the calories with exercise or a fast metabolism. When you take in more than you burn, you will gain weight. It’s just math again…and human nature. We like to lie to ourselves.
So stop cheating yourself, and start your damn bookkeeping today! (Sorry, I get excited.) I use Quicken. And as of writing this (on 4/30/19) I am not getting a fee for saying that. I literally have used it for over 20 years now.