The very fact that you stumbled across this blog and this post says that you probably have an interest in improving or learning more about financial planning and money management. Too often I hear about husbands or wives who are not involved in the financial future of their families.
I sometimes watch Til Debt Do Us Part or the Suze Orman Show and listen to people who have no clue as to what comes in and what goes out. I then look at my life and wonder, am I obsessed with my finances? I know exactly what comes in, I have a budget, I track my net worth, I monitor my investments, but am I obsessed? Is being obsessed a bad thing if it leads to positive outcomes?
Here are a few ways to be obsessed with your finances.
Track Your Finances
Know what you have in terms of assets (cash, stock, retirement, real estate) and know what you have in liabilities (car loans, student loans, mortgages, credit card). It’s very simple. You track these consistently so that the value in your assets is growing at a reasonable rate, and the value in your liabilities is decreasing. I track my net worth through Fidelity, but there are several online tools that will aggregate this data.
Perform Better On The Job
This one activity brought the greatest return. Your career performance is the greatest determinant on if you will be wealthy. Rather than focus on small cost cutting measures, channel that energy to doing better on the job.
Personally, I always do what is expected of me, at a minimum, and try to do more. This one simple activity has opened up career opportunities, chance for advancement, and subsequently, higher salaries, bonuses, and stock options.
Cut BIG Expenses
Forget clipping coupons, making coffee at home, and water saving tips. Those savings are peanuts related to the savings you would incur if you negotiated your next contractor, negotiated your car, shopped around for car insurance, balanced your retirement portfolio to an age-appropriate risk level, refinanced your mortgage, sold your car and bought a cheaper car, etc.
Create A Budget And Stick To It
First thing I did was create a monthly budget. With what I knew was coming in, I was able to plan on our expenses. We knew what house we were able to afford, what cars we could afford, cell phone plan, insurance, house, etc. Once you have a budget, stick to it.
Improve on your strengths
Forget about weaknesses, particularly on the job. Get your weaknesses up to a fundamental level, then forget about them. Channel that energy on improving your strengths. If you’re analytical in nature or a strategic thinker, do more things that will improve that talent.
Grow your assets
Make sure your assets are properly allocated according to your age and level of risk. If you have a long horizon before retirement, invest aggressively. If you’re close to retirement, don’t chase returns; invest conservatively.
According to my own self-assessment, I’m probably a little obsessed with my finances. However, I don’t consider myself extremely obsessed because I don’t let finances get in the way of my priorities…faith and family. When I’m at home with the children, my focus is on them. When my wife have some time alone together, my focus is on her.
It’s a delicate balance, and there have probably been times when I put finances over my other priorities, but no one is perfect. I do my best to be aware of my actions and how it affects the people around me. For me, the end goal for my obsession is financial security.
If you ever notice yourself thinking about finances more often than not, you’re probably too obsessed with your finances. If you’re creating multiple tracking spreadsheets, you’re probably too obsessed. If you trade stock and track the market everyday, you’re probably too obsessed.
On the opposite side of the spectrum, there are families who don’t pay any attention to their financial future and ultimately put their families at risk for a financial disaster. It’s a delicate balance, but its your duty to find your happy medium. So, go..be obssessed with your finances! It will payoff in the end.