Adulting 101: New Decade, New You – 2 Steps to Take Now

KCS Wealth (Byline: Katrina Soelter)

March 7, 2020

As humans, our brains can only take so much change at one time. Our willpower is a depleting resource. This means that new habits are best taken on one at a time if they require us to engage actively to create the new habit.

Fortunately, there are 2 easy steps you can take now to start 2020 off with positive financial habits – and they do not require daily or even weekly engagement!

Step 1: Figure Out Your Organization System

Having a system to keep track of all of your important financial documents is foundational for a healthy financial future. By setting up some sort of filing system, you will make the rest of this year (and your life) much easier – trust us.

The easiest way is either a physical or virtual “filing cabinet”. Do you have a desk? A closet? Get some small drawer that can hold file folders, go to the Container Store and indulge in cute folders, and then start labeling:

  • Tax Documents
  • Investment Account Statements
  • Bank Account and Credit Cards
  • Deductions!
  • Miscellaneous Financial Stuff

Now when you get your mail, simply stick the envelope into the appropriate file. If that’s too hard, pile it up and go through it once a week. You don’t even have to open the envelope right now. Just get it in the file.

See? We told you it wouldn’t be hard. Time for a reward!

Step 2: Set Up Tracking for Your Expenses

Often, people come to us and tell us that they just don’t know where their money is going and don’t really know what is happening with their spending. Sorting through to see where you are spending money is an extremely helpful tool that will serve you well for the rest of your life. This one is going to take a little more time, but it’s well worth it.

The single biggest financial factor that you have control over is your spending. The best way to know what’s going on with your money is to track your spending.

We here at KCS use eMoney software with our clients, which has a “spending” tool that allows our clients to link up their bank accounts. It automatically sorts the expenses into categories so everyone can quickly see what is being spent where.

If you’re not a client of ours, that’s ok – you can give us a call! Or, there are several services out there that clients of ours have used with success, including:

  • Tiller Money
  • Mint
  • You Need A Budget
  • Excel Spreadsheets
  • Quickbooks
  • A handwritten journal (by far the most work intensive option)

We see success with a version that requires some action on your part but mostly automates the categories, so you can see what is going on easily. Choose the one you like best (or if you don’t want to do the choosing, just pick one from the list to start with), sign up, and link up your bank accounts.

This should take 1 to 2 hours (depending on how deep you dig into the details of your spending once it’s all linked up).

Then, set a time on your calendar to look at your expenses every month. Make sure it’s a time you can actually make and will not resent doing it (like the third Monday of the month) and connect it with an activity you enjoy (like napping, cooking, seeing friends, drinking wine, eating chocolate – you know, the good stuff in life) so that your expense overview time is rewarded when it is done. This step is crucial to actually feeling on top of your spending and knowing where your hard-earned money is going.

By combining these two steps, you will feel much more organized and at peace moving into 2020 and beyond. Plus, neither step requires you to use your willpower daily or even weekly in order to maintain that sense of control. New habits – check!