Stop Thinking About Managing Your Money

The other day, I heard something that got me thinking.  It went something like this:  “We talk about behavior change as a difficult lengthy process that involves goals, work, and rewards.… Well, we change our behavior all the time”.

For example:  almost every day, we get up off our butts, walk out the door, and drive our cars.

That’s a change in behavior (from sitting to driving) that we don’t usually think about.  The behavior of driving is wickedly complex and difficult.  But it doesn’t require explicit goals, step-by-step plans, or well-structured rewards.   Ideally, managing money should be like that.    I’m intentionally being provocative here, and trying to look at “changing our financial behavior” in an unusual way.  Here’s the metaphor:

We don’t drive because we enjoy depressing the gas and brake pedals.  We want to get somewhere, or maybe we want to enjoy the ride itself, looking out the window.   We don’t sit on the couch and suddenly exclaim:  “I want to press the brake pedal on my car!”

Nor do most people say they want to create a budget, or log into their bank site to pay bills. Why? Because it’s boring and difficult.   Budgets and paying bills are like pedals on a car – they have no purpose on their own.   Overall, financial planning is unimportant  –  financial planning is just the car.  The only reason most people do it is because it a) gets us somewhere or b) allows us to enjoy the ride along the way.

What would it look like to treat managing money like a driving a car?

For 95% of Americans, driving is part of the fabric of our daily lives. It’s just something we do – even though it is complex, challenging, risky, and there are lots of other things we’ve rather be doing with our time.   We do it because it is an integrated part of how we live – how we do all of the other things we want and need to do each day.   Money management should also be part of our life’s fabric, in a similar way – by making it routine, and by making it an obvious step we take to meet our other goals.

Clearly, there’s an element of training that’s required to get there.  Driving and managing money takes time to learn.[1] As with driving, money management “training” should limit the amount of thought and effort needed in the future to act, and build up self-confidence to act in the future.  That means learning how to avoid unnecessary work, building habits,  automating as much as possible, and celebrating our successes along the way.   For many of us, this includes setting up our phones with our favorite personal finance app (HelloWallet comes to mind…), automating bill payment, tracking our spending via habit or automation, and seeing our small financial steps succeed.

Where we put our focus is vital.  Thinking about the task (driving, managing money) is a recipe for frustration.  Look to the real goal instead.  If there’s doubt on how to get to the goal, then map out the route (establish the mile-markers needed for saving money on time, etc).   Make a concrete plan on how to make it happen and handle obstacles along the way – it’s not a plan for how to drive or how to manage money; it’s a plan on how to reach your real goal by way of driving or money management.

It also means being honest about structural problems.   I wouldn’t blame a person who can’t start the engine of an old rust-bucket.  I also wouldn’t blame a person for being in financial difficulty if they have crushing bills with too little income.  That’s just the reality for many of us.   But, I would look for a way out.  That might mean drastic measures (bankruptcy, moving the family to get a better job) or it might mean something less drastic (selling the second car, sending the kids to a cheaper school).   No amount of pounding on the car’s hood or on the family budget is going to solve these issues on their own.

The metaphor can’t be stretched too far.  But, when you find yourself thinking “I hate budgeting” or “I don’t know how to track my expenses”, you’re exactly right.  That’s not the point though.  If you think about budgeting, or expense tracking on its own, you’ve already lost.

I’m not saying that managing money isn’t difficult.  It is. But so are many of the other things we do in our daily lives – like driving a car.




[1]Good cars and good financial planning tools avoid as much of the work as possible. Driving an automatic car is inherently easier to learn than driving stick.  Good tools can structure the problem and environment to make the job easier – I talked about that some in two previous posts.   But, here, I assume you’re stuck with the tools (car, financial situation) you’ve got.