When looking at your money, there are often two basic approaches. Either you take a big picture view of the entire money “forest” or you only watch the individual budget item “trees.” In reality, you have to do both to be a good money manager.
The common saying that I don’t see the forest for the trees is easy an easy analogy for families who budget every detail, but don’t really understand their money habits. While tracking and analyzing spending is good, you can easily get so lost in it that it can become counter productive.
The key is to take a more middle-of-the-road approach. Set up a budget and track your spending. Regularly compare how the actual and budget match. At least every six months, sit down and determine if your current budget is realistic.
All of this is great and very much detail oriented. But really, none of it has any meaning if you don’t understand what the “forest” is in your money life. What exactly do you want money for? Sure, we all need food and clothes, but go beyond the basics. Really spend some time looking only at the big picture.
If you tend to be the type who easily gets lost in the details or day-to-day, take a day to plan with your family some important money goals. Then take them and post them where you all can see… on the refrigerator, the office desk, or even your bathroom mirror. The important thing is to keep the big picture goals in the back of your mind at all times.
Money is truly a part of most of what we do; we just don’t often stop to think about it. Thus, the only way to achieve these long term goals is to think about them often. Apply them to all your day to day money logic and budgeting details.
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