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This is a guest post from J.D. Roth, who founded the blog Get Rich Slowly in 2006. Roth wrote Your Money: The Missing Manual and is the “Your Money” columnist for Entrepreneur magazine. His latest project is a year-long course on how to master your money, which explains how to slash costs and boost income so that you can pursue early retirement and other goals. This article is one piece of this course.
In nearly a decade of talking to people about personal finance, I’ve seen that one of the biggest barriers to financial success is how little attention is given to the work. The authors of The Millionaire Next Door found the same thing: In that book, they write that two-thirds of the millionaires they survey admit to spending “a lot of time” planning their financial future. People who prioritize their finances have greater success; those who ignore the job often struggle.
This isn’t surprising, of course. Whenever you dedicate time and attention to something, you get better at it. Would you expect to be able to play “Stairway to Heaven” without practicing the guitar? Could you fly an airplane without long hours of instruction? To do something well, you’ve got to work at it — and that includes money management.
At a minimum, commit to:
- Make an appointment with yourself — and keep it. Just as you’d make an appointment with a doctor or a mechanic, schedule a regular time to review your accounts and pay your bills. I recommend blocking out an hour on Saturday or Sunday morning. Keep the appointment every week. Treat it as a priority.
- Develop daily habits and routines to make things easier. Spending a few minutes every day to record transactions, for instance, can reduce the workload at your weekly appointment. Plus, this constant diligence helps you become more aware of how you’re handling your hard-earned dollars.
To make sure my financial life runs smoothly, I spend a part of every Monday morning looking over my accounts.
On the first Monday of each month, I check balances and pay bills. I also enter data into Quicken (I like to do this by hand), which allows me to generate financial statements. Most importantly, I review my spending to be sure it hasn’t strayed too far out of budget.
On other Mondays during the month, I perform an abbreviated version of this routine. I check to see whether there are any bills that need to be paid. I make sure there are no strange charges to my credit cards. I peek at my investment accounts.
Throughout the month — all day, every day — I collect receipts as I buy goods and services. If it’s unclear what the receipts are for, I jot a note to myself so that I’ll remember on Monday morning. I also make sure that I return my checkbook and wallet to the same place every time I return home.
Scheduling a weekly appointment with yourself and developing daily habits are the minimum you need to manage your affairs. These things are simple, but they’re important. Turning these actions into habits will set your mind at ease. If you don’t do them, you run the risk of losing touch with your finances.
If you’re serious about your financial future, you’ll look for ways to spend even more time taking care of business. When I became serious about saving, I made time to read about business and personal finance every evening. I know others who take online courses about getting out of debt or earning more money. Others attend seminars about couponing and home economics.
The more time you spend managing your money, the better the results you’ll achieve.
This is a modified excerpt from “Be Your Own CFO”, the 120-page guide included with the year-long “Get Rich Slowly” course. The guide includes tips for boosting revenue and cutting costs so that you can maximize profit in order to achieve your dreams, whether those are to retire early, send your kids to college, or travel the world. Want to know more? Buy it now.
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