An easy exercise for reducing financial friction
Get money off your mind and go enjoy your life — a sneak peek from Chapter 3 of You Don't Need a Budget.
Money should be easy. That’s been my mantra in financial education for years. Any approach to money management should get money off your mind, so you can get on with living your life.
Budgets don’t do that. They bombard you with money stress and financial decisions, add tasks to your plate, make you do math when you’re trying to have fun, and plague you with unhelpful progress reports and personal assessments.
In You Don’t Need a Budget, the first step I recommend for stepping away from budget culture is dropping the personal budget. Instead, you can automate your finances to get money off your mind.
Here’s a sneak peek at what you’ll find in Chapter 3 — an exercise to help you automate the most vexing parts of money management and a quick list of ideas for automating your finances to get your creativity flowing.
Make money easy
Did I ever mention my original outline for the book included a money management method called EASY Money, and yes that’s an acronym that lends itself nicely to four distinct sections of a book? (You might recognize it if you’ve been reading this newsletter for a while…) I abandoned that approach, though, when I realized it’s just another prescription nobody needs.
But I didn’t lose the intention behind that original idea. The E (earn) became an opportunity to talk about our cultural relationship with work and worth. The S (save) expanded into a more useful conversation about financial goals. The Y (yield) became my conscious spending approach. And the A (automate) became my mantra to get money off your mind.
And, it’s still about automation.
Here are three questions I encourage you to answer to suss out the financial decisions that live rent-free in your head and find ways to put them on auto pilot.
What's a financial decision that frequently causes you stress?
What makes it hard?
How could you automate it to remove the need to decide?
9 ways to automate your finances
Now brainstorm automations that would reduce friction or take this decision off your plate. Here are some ideas to get you started:
Reverse your budget (i.e. "pay yourself first").
Direct deposit your paycheck.
Set up autopay for bills.
Schedule transfers from checking into savings.
Set calendar reminders to pay bills.
Set a reminder to save for and buy birthday/holiday gifts.
Use a password manager for your financial accounts.
Document processes you might repeat in the future.
Set a weekly money date to review your financial goals.
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These 9 points still imply that you have a budget and always know what's coming in and going out as well as related deadlines. You either know everything by heart or have at least a very simple list. Frankly speaking, I would be stressed out to no end not having my Excel budget where I see at one glance what happens when.