I love personal productivity sites like 43folders and Getting Finances Done. I enjoy creating ‘systems’ for managing my finances, organizing my life, and “getting things done”. (If you haven’t read Getting Things Done: The Art of Stress-Free Productivity, may I suggest that you do so? It’s a great book.) But, I’ve come to the realization that I usually enjoy creating the system more than I enjoy working the system. Why? I tend to create elaborate “systems” which require more effort to maintain than I’m willing to give. So, as a warning, be careful of the number of “systems” that you try to build into your personal finance structure. Get rid of the superfluous ideas that are not working, and focus on creating simple, easy-to-use, no-brainer “systems” for managing your finances.
First, you need a budget that you can setup, modify, and actually use. Elaborate, fifty-page, multi-screen budgets only work for a select few. Create a budget can and will actually use. (I use YNAB Personal Budget) Find a budget program that will work for you. If you spend too much time creating the budget, manipulating the numbers, and worrying about every single detail, you will “burn out” and lose your drive. In my opinion, it’s better to have an A- budget and A+ results than to have an A+ budget with D- results. In other words, don’t over-complicate the process.
Second, you need some kind of bill organization system. Primarily, I receive two types of bills. I receive the majority of my bills online via email. I highly recommend having as many bills sent this way as possible. (If you want, you can print a copy of the email for your records.) The rest of my bills arrive the old fashioned way, via the post office. Over the past few years, I’ve developed two, super-simple methods for dealing with both types of bills.
Click here to read about my Super-Simple Bill Pay System. This system works especially well for online bills.
Click here to read about my system for dealing with paper bills (and paperwork in general).
There are tons and tons of techniques for building better “systems”. The problem is, after creating their systems, few people do the follow up work of actually using their systems. Don’t over-complicate things. Create reliable systems that work for you and use those systems to manage your finances. Remember, this is personal finance. You do not have to use another person’s system, unless that system fits your lifestyle. I enjoy using online services to manage my bills. You may prefer to use pen an paper. Find what works for you… and then don’t forget to actually DO something with the systems you’ve created.
Planning is essential, but useless, when not coupled with execution.
Please take a moment to check out this week’s Carnival of Debt Reduction over at the No Credit Needed Podcast. I enjoyed hosting this week’s carnival and there are some great articles about debt reduction and finding motivation. The carnival is available in a text format and an audio format!
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