Since last summer, I’ve been developing a financial system to deal with money efficiently and with minimal work. The system has several constants: my income, rent/bills, investments and my savings goals. All of this is allocated into budgets automatically through transfers and mint.com. The rest of my expenses are allotted within the constraints of my constants, all following the simple (yet surprisingly seldom followed) tenet that I won’t spend more than I earn.
I’ve tried to optimize every aspect of the system with the intent of minimizing work while maximizing payoff (brilliant, I know). However, as I’ve added tighter levels of control, I haven’t taken into account that the inputs and outputs might change. I’ve been under the false assumption that everything will stay constant. Mixing my obsessive attempts at optimization with many slight changes in my situation has led to a huge backfire and converted all of my expected benefits into anxiety and work. This didn’t turn out well for my mental state of being, and no one wants to be near me when I have a meltdown.
The important thing that I realized is that these systems are meant to help. As I tried to build in more control, I ended up letting the system take over my life. It’s been very helpful to take a step back and turn it off. I feel so free! Don’t worry though, I’ve left many of the automatic parts in place, so I’m still saving some money and not spending it all on beer and French fries.
Once I move into my new apartment in August, I will rebuild my system and include regular checkpoints to evaluate my base assumptions. The easiest way for me to do this will be to use automatic Google calendar reminders every three months. I think this will work a lot better, and I’m happy about my realization that I don’t need complete control to have an effective system.