5 Tips to Remove Stress From Your Finances: Tip 1- Healthy Tracking vs Unhealthy Tracking

In this video, Matt Blocki from EWA shares the first tip for reducing financial stress, which is tracking finances with balance. He emphasizes that excessively tracking finances can lead to stress and reduced happiness, while inadequate tracking can also be problematic. Matt suggests focusing on tracking savings and net worth and highlights the importance of setting up an automated reverse budget to simplify financial management. He encourages individuals to strike a balance in their tracking efforts to maximize their time for more meaningful endeavors.

Video Transcript

Hi, this is Matt Blocky with Ewa. Today, we are talking about five tips to remove stress out of your finances. First tip we have:

Tip 1: Tracking On removing stress out of your finances forever is around tracking. So, I think with everything financial planning is not a black or white conversation, a lot of times it’s artwork. There’s lots of paradoxes that exist in financial planning. One, for example, is being the best saver in the world doesn’t necessarily mean you have the best financial plan. Maybe you’re accumulating assets for a reason that you don’t even know why you’re going to accumulate them, and you end up with five times more than you need with no plans for an inheritance. And you look back at your life and figure, well, I could have been more present today or more spend more time with my family today with different career decisions, etc. That’s just one example, but today we’re talking about tracking. So what I found is there’s a sweet spot. If you do not try tracking, let’s say you know between a one, two, a three, there is going to be a lot of stress there because you’re going to wonder am I on track, how is my budget. With no tracking stress levels are going to be pretty high, happiness levels are probably going to be at a one. However, at the same point, if we get to a seven tracking, I think our happiness levels are going to be really good. But if we overly track our finances, and I’ll explain what that means, our happiness levels start declining because now we’re spending so much time within Excel sheets that we lose time with friends or family.

Strike a Balance Host: Let’s talk about what does it mean to strike a balance with tracking. Some of the most successful individuals that we’ve worked with, they track their savings and they track their net worth. Tracking your savings is something that’s very important in tracking because what we review as what’s called the money temperature. Whatever doesn’t get saved ends up getting spent. So if we track every dollar that gets spent, the question is what was the purpose of that? Is that going to cause change? It’s going to cause more stress than change. However, if we decide at the beginning of the year here’s what we’re going to save into what accounts and just accept the fact that if we do just that, we’re going to be completely okay, we’re going to be completely on track, and let go of the every purchase. Then not only we’re going to strike a balance between time and maximizing time you have in other endeavors, but you’re actually tracking what matters. So if I were to choose one thing to track, it would be looking at, you know, money coming in the door, what’s getting saved, and just accepting the fact that you have control of the money temperature. Whatever doesn’t get saved will get spent. This would be the one thing I would recommend someone track.

Daily Basis Host: Now, on a day-to-day basis, there are things I recommend to do, such as look through your banks, look through your credit cards once a month, make sure the transactions are all transactions that you made. Set up an automated reverse budget where if you have a paycheck, make one account fixed where every corresponding expense such as a mortgage, a car payment, anything that’s fixed comes out of that. And then put the rest of your paycheck in a variable account where this pays off your credit card and this alone will remove the need to track to wonder is there money there for this purchase, is there money well, you know, this is going to happen. The fixed account should cover expenses and it should cover savings, then whatever is left, you’ve empowered yourself without the need to track. This money is meant to be spent. I hope you found this tip helpful. I hope this frees up your only non-renewable resource, which is your time, and we can focus really on what matters.

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Playlist

5 Tips to Remove Stress From Your Finances

5 Tips to Remove Stress From Your Finances: Tip 2- Evaluate How You Trade Time for Money
5 Tips to Remove Stress From Your Finances - Tip 3- Establish Your Top 5 Values for Decision Making
5 Tips to Remove Stress From Your Finances - Tip 4- Talk About Money
5 Tips to Remove Stress From Your Finances - Tip 5- Hire, and Know When to Fire, An Advisor

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