“We never do anything well until we cease to think about the manner of doing it.” – William Hazlitt
The allegory of the centipede makes the point nicely: asked how it knew which of its hundred feet to use when, the creature found itself unable to move. I am frequently asked what I think is the best way to do recordkeeping, file your financial information, which is the best software to use, should I do it by hand or use Quicken or Microsoft Money or Excel, do I have to use Quickbooks, etc, etc. My answer is the same as Nike’s: Just do it!
It’s not that I don’t have opinions about the best way to do it. (Anyone that knows me knows I have opinions!) It’s just that when someone asks me that question, its not usually because they’re trying to refine and make better a system they are already using. The people that ask me that question aren’t using a system at all, and they’re waiting until they have a perfect system to start using it.
If you recognize yourself in this post, my suggestion is to pick the easiest system you can think of, do it consistently and with reverence for 3 months, and then evaluate how it worked.
Don’t know where to start? Here are some ideas. Pick one:
- If you’re starting from scratch, get a little notebook and write down everything you spend. Everything. Then, twice a month, total your spending in some broad categories. No more than 12.
- If you’re using financial software (Quicken, etc.) but you still feel you aren’t doing it right, or you don’t KNOW your numbers, make acommitment to update it once/week. Once updated, write by hand, on a piece of paper,your monthly spending in each of your major categories.
- Try the old fashioned coffee can approach. Dole out at the beginning of the month into separate envelopes your monthly spending plan for groceries, eating out, entertainment and any other area of discretionary spending. If a month is too long, use a paperclip and post-it note to identify the 1st – 15th and 16th-31st spending.
Ok, now that you’ve picked one, just do it, don’t think about how you could do it better, just do it for 3 months. At the end of 3 month, let me know what you picked, how it worked, and how you’re going to make it a little better for your next 3 months.
Consistently, and with reverence!