Personal Finance System

My life is built around systems… that’s just how I’m wired. For Dr. Budgets, I have systems for managing potential clients, new clients, and coaching clients. I also have financial systems around the money that flows in and out of the company. On the personal side, I have systems for tracking my time, loading the dishwasher, paying the bills, and automatically saving. Which brings me to the topic of this post… having a good personal financial system. I’m currently working on a book that covers this topic in depth. The release date is anticipated in 2021 and will be announced in our newsletter (click here to subscribe to our newsletter). Until then, here are 5 benefits of having a good personal financial system:

Save Time & Money.   Once you get past all the hard work of creating and setting up your personal financial system, the time you save will more than repay you for your efforts. In our household, my wife doesn’t have to look at our finances at all. She knows which credit card to use for which type of purchase, and then all our credit cards are paid in full automatically from our joint checking account every month. In the rare event our bank balance drops below a certain balance, she gets a text alert so that we can quickly determine why that happened. Our savings are also automatic, not only with a set percentage of my wife’s paycheck saved into her 401(k), but also a predetermined amount that is automatically transferred from our checking account to our online savings account every month. All in all, our personal financial systems save us time because we don’t have to manually pay bills or make transfers every month. In addition, they save us money in bank fees because we never get hit with overdraft or late fees.

Achieve Financial Goals.   Our personal financial system is designed in a way that automatically funds our financial goals. Money comes out my wife’s paycheck into her 401(k) without us ever seeing the money in our bank account. We also have multiple savings accounts for different goals, such as a house down payment, home improvements, travel, and even Christmas gifts. By funding our financial goals automatically, we don’t have to think about it. When it comes time to travel or buy Christmas gifts, the money is there waiting to be spent. 😊

Create Guilt-Free Spending Money.  When we spend money on travel, it is both guilt-free and interest-free. Since we have a pool of money waiting to be spent on travel, we can do so without charging up the credit card. We can spend the money guilt-free knowing that we are spending it exactly as planned. This concept can also be applied to big purchases, such as a car purchase or major home improvement. It can also be applied to day-to-day spending like dining out or entertainment. The key is to determine how much you want to spend on something, then create a personal financial system around it so that you can automatically achieve your target spending amount.

Less Financial Stress.   If a couple experiences tension around finances because they have different spending styles or lack of communication, a good spending system can help! My wife and I each get an amount of money transferred to our individual checking accounts each week. I liken this to an adult allowance – it is a fixed amount on a fixed schedule received automatically into personal checking accounts that can be spent on anything. There is no need for us to consult with each other before we make a purchase because the money is ours to spend however we wish. If I want to save my money to buy an Apple Watch, I can do that. If she wants to go clothes-shopping every week, she can. Having our own personal spending money is very freeing and eliminates potential financial friction around money.

Financial Peace of Mind.   Imagine having a good personal financial system that allows you to save time and money, make steady progress toward achieving your financial goals, spend money guilt-free, and minimize financial stress in your relationship. Would that lead to a sense of financial peace of mind for you? As I mentioned, I’m wired for systems, but I know that having a good personal financial system can bring peace of mind to just about anybody.

As always, we’re here to help if you need assistance in creating an individualized spending plan and system for your financial life. If this gets you excited to start working toward achieving your financial goals, click here to schedule your complimentary consultation! Or, if you would like to be the first to learn when my book is released in 2021 click here to subscribe to our newsletter.