5 Reasons People Struggle with their Finances (3 of 5)

3) Lack of Systems

I recently spent a couple hours with a client opening, sorting and organizing mail that had accumulated over the past year. She had so much anxiety about just opening the mail that it was easier to let it pile up. While this may seem extreme, it’s not. I’ve seen this over and over in a variety of ways in my 20+ years of being in business. People arrive with shoe boxes full of receipts & bank statements because they need to file their taxes or have a court order and must provide financial documentation. Prior tax returns have been filed with incomplete information, leaving money on the table (or with the IRS in this case) due to incomplete or undocumented expenses.

We live in an AMAZING time where technology makes financial tracking and reporting so much easier. While bank feeds and AI (Artificial Intelligence) certainly remove the data entry burden be careful not to be lulled into believing that it’s 100% accurate . I’ve spent many hours wading through client accounts correcting entries that have been incorrectly entered or classified. In addition, banks are not error free; I’ve had client deposits be deposited to other people’s accounts. Without a system to review financials those funds would have been gifted unknowingly to some random person. Systems, in my world, are the key and what I believe financial tracking is all about. A healthy financial system reduces anxiety, frees up time, and provides complete and accurate financial statements.

… and what to do about it:

There are a variety of financial tracking applications for mobile and desktop users. Find the one that best fits your needs. A few examples are Personal Capital, PocketGuard, Quick Books Online, YNAB and Wally. Once you’ve chosen your preferred platform & program, link your accounts and set a rhythm for managing your money. If this feels completely overwhelming then I recommend seeking assistance in setting up your systems. The idea is to invest some time upfront in designing your systems so they are easy & effortless moving forward.