How Difficult Is Managing Your Finances?

[Singuy]

I just heard a radio commercial for a regional bank with the first line being "it's NEARLY IMPOSSIBLE to manage my finances with a 2 year old and a 4 year old". At the end the disclaimer was "sponsored by a real customer of Regional Bank".

They must have done poll studies on this and find the first statement to be relatable or else it'll be an ineffective advertisement.

So how difficult is it to manage your finances?

[Nutria]

Managing finances isn't hard. Finding the will to manage finances can be as hard as finding the will to lose weight, exercise, etc.

[Thrif-t]

I will say when my kids were little I wasn't really into managing our finances, it was more a set and it forget it for a good number of years. There just wasn't time with working and taking care of a family. It wasn't until the kids were in elementary/middle school that I started to get "into" everything because I had a little more time.

[Smallsteps]

I do not think it is that hard to manage finances it just takes the commitment. I find that so many ads use phrases that imply it is not your fault everyone is in the same boat etc.
Financial ads are the worst in insinuating that it is just too hard not that a person has ignored the issue. most financial articles insinuate that as well.

[phantom]

Before I had my daughter, I managed my finances in a very active manner. I maintained a GnuCash document that I updated at least every other week. I always knew exactly how much money was in every retirement account, and I always knew exactly where every dollar we spent went. I kept a small buffer in my checking account because there was always plenty of time to move money out of savings when I needed. Manually updating numbers, and thinking about the state of my finances was a relaxing, almost meditative experience that brought me a great deal of satisfaction.

Then my daughter was born and my money management "hobby" went out the window. I had to give myself more of a buffer in my checking account and automate more of the bill paying. I can only say I know exactly how much money I have where about once a quarter, and a lot more spending gets categorized a "miscellaneous" than before. If I hadn't developed some good spending and savings habits before having a kid, I can imagine being totally overwhelmed at this point.

[Nutria]

I always knew exactly how much money was in every retirement account

Why? It's retirement, for God's sake, decades away.

[rob62521]

Why? It's retirement, for God's sake, decades away.

Because you never want to take your retirement for granted, even if it is aways away.

[disneysteve]

Why? It's retirement, for God's sake, decades away.

Do you not keep track of your retirement accounts? I do. I always have. The same as for my non-retirement accounts. They're all part of the same spreadsheet I maintain for all of our financial holdings.

[Nutria]

Do you not keep track of your retirement accounts? I do. I always have.

"I always knew exactly how much money was in every retirement account"

That's a tad more excessive than recording your retirement account balances once a month or quarter.

[kork13]

I'm grateful that I built my money management habits years before we had kids. After DS1 was born, and even more so after DS2 was born, I've had very (very) little time to focus on our family's finances. Gratefully, our finances have mostly been on relative autopilot for 90% of the last few years, except for the occasional re-evaluation & adjustments as needed (only spending maybe 2-3 hrs per quarter on it).

Frankly, money management can be difficult and time consuming at times. I think if I were to only now be trying to get my finances under control, I'd likely struggle tremendously. Many days, I feel like I never have enough time to take care of everything. If I didn't already have my finances under control, I'd be a mess.

But once you have things settled, it really can be a "set it & forget it" type of situation. I have all of my income, savings, bills, and other money things almost completely automated, so the money comes in & goes out without any input from me. Only time it needs more attention than a quick check is when significant changes happen in income or expenses.

[Like2Plan]

I found it was even more important to manage our finances after our DS was born. There were new immediate and long term spending and saving categories that had to be managed.
Like Kork13, we have always done the set it and review it once a year method for savings goals. Most savings categories were automatically funded, so it only took a few minutes to monitor the progress each month.

[phantom]

Why? It's retirement, for God's sake, decades away.

I was speaking a bit hyperbolically. But, retirement savings was and still is a big part of my financial picture, and having a clear, accurate picture of how all my balances were trending made planning and bouncing ideas around easier. My husband and I frequently wonder things like "what if one of us stopped working" or "what if we spend $X on a new car right now" or "what if we want to buy a rental property," and when having those conversations, we like looking at where we stand in the moment rather than where we stood several months ago.

Do/did we need the level of detail and accuracy that I was maintaining? Certainly not. Did I enjoy doing it and find it useful? Totally!

[msomnipotent]

I can see both sides. If you are starting from scratch and don't have someone to give you detailed advice, it can take a long time to learn what you need to know. Even if you know to have a 401k, IRA, EF, and college savings, you still have to figure out which companies to choose, what funds, and what fees are reasonable. Then again, the people in my family that are not doing well are the type to say that it is too hard and give up without trying. They are also the same people that complained that they can't pay their credit card bills because of "this economy" years ago when everyone was griping about it, even though their paychecks didn't change.

I have read that retirement funds are supposed to be "set and forget" just because the more you look at it, the more you are apt to change things from short term fluctuations. I think my husband learned something when his set and forget 401k was losing money every month due to fees he didn't know about. I glance at everything a few times a week just to be sure no one hacked our accounts, but I do a review once a month. I usually only change things once or twice a year.

By the way, I just tallied up our savings and retirement plans and we added almost $17,000 to our savings in two months. You know, not that I'm bragging or anything.

[Nutria]

IMy husband and I frequently wonder things like "what if one of us stopped working" or "what if we spend $X on a new car right now" or "what if we want to buy a rental property," and when having those conversations, we like looking at where we stand in the moment rather than where we stood several months ago.

I do something similar, but for job loss, having line for all our budget items, and then columns for our current two-job scenario, if DW loses her job, I lose mine, or we both lose them. Then the spreadsheet compares that to how much cash and equivalents we have on hand.

[Fishindude77]

In my contracting business we were required to submit personal financial statements to both the bank and the bonding company on a routine basis, started doing this in my late 20s. This kind of forced me to understand my personal finances better. Now it’s pretty much second nature and not difficult at all.
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