Wednesday, September 4, 2013

write, do it for your finances

Sometimes I do stuff like not update my blog for a month.  Then days like today happen, where I need to write and write, to make sense of my thoughts, and I remember that I’m a writer.  While not everyone has an inclination to write, I’d agree with the many people who posit that some kinds of writing can help everyone gain clarity.  I also had another epiphany about personal finance.  To recap my life: I have a tendency to realize things that were obvious to most everyone else years earlier and make a big deal of my ‘discovery’.  But I did have some thoughts about harnessing (minimal!) writing to get/keep your financial life on track.

One of the things working really taught me was how helpful and important it is to prioritize -- not saying I truly learned how to, just that it became painfully obvious it was a necessary (but not sufficient) condition for success.  If you can believe it, I don’t think I ever truly prioritized between work.  Sure, performance on a test was more important that how I did on a single homework, but really, it was just all stuff that I had to get done.  And so I put time (oh so much time) into all that work.  You probably realized this sophomore year of college (because nobody’s freshman year is that hard academically, right?), and have more experience working smarter, not harder, than I do.

I’ve been nerding out hardcore with some papers and lectures (mmm finance PhD), thinking about how incredibly interesting the question of how to get people to invest (period) and how to invest better, is to me.  How much I care about America, collectively, getting its shit together and has a healthy financial life.  Which brings me to why I think it’s so important to write down your goals!  I’m trying to wrap my mind around what’s most important to do and learn in my first year of grad school, because there a million and one seminars to attend, papers to read, etc, and I can’t do everything perfectly so I need to be on point for what’s critically important.  I’m totally the same when it comes to finances!

Do you have any financial goals? Short-term ones like keeping groceries below Y for the week, longer ones like saving $X in the next year, and of course, how you are going to leverage your money to have a better life.  What are you going to achieve, and how is money going to get you there?  I have a few (personal) goals: to max out my Roth every year in the next five years, and to rebalance my assets according to my chosen allocation every year.  I’m doing this so I can keep growing my balance sheet, putting in minimal work, staying true to the basic investing principles I believe in.  I have financial goals for my future husband and me as a unit, as well.

Writing down your goals matters, because you cannot write down something that doesn’t exist.  There are so many small decisions you make every day that affect your finances -- like whether to go out for food, whether to buy something, how to entertain yourself (expensively or not).  It’s complicated to look at very transaction individually without a broader picture.  Also, hard.  The key is to be deliberate about everything - I don’t know if there’s truly anything that is a terrible purchase, as we all have different tastes and values, but you will never know if you’re spending money just cause and with no real benefits unless you think about, or write out, broadly, what matters to you.  Then each individual decision is no longer a big deal -- you don’t have to internally debate the importance of every small task (and waste mucho time and energy) if you have your overall vision set.

This post brought to you by Bonnie McKee’s ‘American Girl’ which has been powering me through, on a loop, for the last two hours.  Anyone else dig the song?  Or the idea of writing down your goals being a freakin’ clarifying experience?  Anyone firmly in the ‘nay’ camp for writing?  What have you found to be helpful to stay on track?  Are you on track or somewhere else entirely?

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