Hey, remember that time that GameStop stock took off and everybody was freaking out about how it was going to change our financial systems *~forever~*? Did you attempt to buy some of that stock when you heard about it? Are you kicking yourself for not getting in on it? Well, I think you should fight those impulses, because your finances should be boring.
What Do I Mean by “Your Finances Should Be Boring”?
This post is inspired by this quote I found in The Boglehead’s Guide to Investing (I’ll review it soon):
You want excitement? Get excited about your career. Get excited about your family, your community, place of worship, favorite causes, sports teams, hobbies, or anything else you want to feel passionate about. Get excited about earning and saving money, but be very dispassionate when it comes to investing. Once you have enough money, you can spend your time being excited and passionate about any blessed thing you want.
Taylor Larimore
This fits with my philosophy on money: money is a TOOL. And we should figure out how to use that tool to live the life that we want. This means NOT living our life solely to accumulate money. (Unless that’s what you really want. But I think if that’s the case, you might need to examine why that is…)
But I think managing money should be a one-time effort sort of a thing. Take the time to figure out your financial goals, make a budget to reach them, and then walk away! Yes, you’ll have to periodically evaluate your savings and check in with your goals. But you won’t be reinventing the wheel every time. Let it be boring.
Benefits to Boring Finances
There are payoffs to having boring finances!
Time Efficiency
By taking the time to make a plan and making regularly-scheduled check-ins, you become more efficient with your time. But you also end up with more efficient finances. When you have a prioritized list of goals, it’s much easier to dedicate your resources to the things at the top of the list. Anything at the bottom of the list, you can rest assured you’ll get to, at some point. And anything that isn’t on the list at all? It’s not important! So don’t spend your time or money on those things!
Financial Efficiency
As you get further in your financial journey and start managing not only savings, but also investments, it’s really easy for emotions to get caught up in your decisions. But if you have made up your mind that you finances are going to be boring, you’ll find yourself making more sound financial decisions. There have been so many studies about how to maximize returns in the stock market. Over and over again, economists realize that the people who invest in low-cost index funds and ride out the shifts in the stock market are the ones who see the most gains.
Even if you’re not to the point where you’re investing yet, getting to a boring, “set it and forget it” mindset with your finances will help you build financial stability faster.
Emotional Efficiency
Fun fact: the old adage, “money can’t buy happiness” is both true and false. It’s false in that, yes, money can buy goods and services that will boost our happiness. However, there is a point at which every additional dollar brings us less incremental happiness. There was a famous study that showed that that figure is $70-95,000/year.
And the truth is, the more money people have, the more money they think they need to have to be content. You can fight that by making your finances boring and pulling them from the focus of your life. Instead, focus your energy on what actually brings you joy in your life.
How Do You Make Your Finances Boring?
From my perspective, there are three components to making sure your finances are boring as all hell.
Make a plan
This might seem like an intimidating step, but rest assured: there is no wrong way to do this. (Well, if your plan is to finance your life with credit cards, that might be a wrong way…) Ok, lemme revise that: don’t stress about getting this perfect, because life is long and you have a lot of time to learn and adjust your plan.
But just get one down! What do you want to accomplish with your money this year? In three years? In ten? Write it down! And start trying to figure out how to get there. BOOM. There’s your plan.
And if you are still avoiding taking this step, invite a good friend over (erm, to a zoom meeting) and take 20 minutes to brainstorm at the same time. Misery loves company, after all!
Automate as much as possible
Full disclosure: I’m only just now getting to this point in my financial journey. Despite working up to having a healthy buffer in my bank account and a good emergency fund, it tends to freak me out to have my bills on autopay. BUT. It’s a great step to making your finances boring! If you don’t have to think about paying bills, your finances will only occupy the time that you schedule for your regular check-ins.
Check-ins
Speaking of check-ins… schedule them! I check my finances monthly. It consists of recording my monthly spending, making sure all my bills are paid, and updating my personal balance sheet. Then, I don’t think about it until the next month. Once your finances are in a stable place and organized enough to be ignored, you’ll find the peace of mind that comes from having boring finances.
