Last week, we talked about a crucial step in creating a financial system: identifying the correct problem. Now, in some cases this is dirt simple: “I’m in credit card debt and I want to get out” or “I need to start saving for retirement but I never seem to have any money left over.” Maybe they’re more complicated — “my spouse and I always fight about money” — but you’ve sat down, talked it over, and figured out that you each just need a little money that you can call Mine Not Theirs. Now that the problem is identified, we can start looking at possible systems.
Good news: generally, there’s no need to come up with a system out of thin air. Money — even credit cards — have been around long enough that people who geek out about finances have come up with some good systems for handling it. Credit card debt? It’s really hard to beat the envelope method. Need to save for retirement? Pay yourself first, start slow and ramp up. Need money that’s yours and not your spouse’s? Check out Yours/Mine/Ours. Find a financial expert, blog, or book, and talk/read until you find something that resonates.
Alright — so you’ve found a system, or maybe a few systems, and you’re trying to figure out what to do. You’re probably hesitating — will this system work? For me? Is it the best system? What if I don’t like it? What if it’s hard?
That’s lizard brain talking. It’s natural for it to resist change — after all, back in the early days of homo sapiens, foolish change might mean death. In the case of money, though, it’s your lizard brain that’s being foolish.
True, the system might not work. It might need tweaking, or it might not be the right system. So it’s fine to do a little research, maybe ask a financial geek with experience. The key to remember, though, is this: every system is an experiment. Nothing is permanent. You don’t have to make a choice and then follow through forever. Rather, pick a system and get started. Not sure if it will work for you? Well, there’s only one sure way to find out! Once you’ve got some experience with a system, you’ll have a much better idea of what kind of tweaks it needs or whether you need to try something completely different.
Picked a system? Great. Stay tuned next week for the next step.