When I did do personal accounting, it didn't do diddly for me in that regard. Is accounting going to teach you how to negotiate a raise? Is accounting going to show you the best companies to apply to or how to represent yourself in an interview? Is accounting going to win you a lover or turn that lover into a significant other?
No. Emotions are the key to all of the previous things, either mastering them or expressing them. That's where one should focus their efforts.
Maybe I'm thinking about it differently then. Accounting has been absolutely instrumental on my path from $20k/year to 6 figures (in 4 years). Without it, I'd piss all my money away because I have no idea how to handle these kinds of sums mentally and emotionally.
Accounting keeps me in check so I can use my money in ways that make more money instead of fritting it away.
My current understanding is that my lifestyle costs a certain amount of money, these days around $50-60 per day. Rounded up that's $2K a month. My paycheck rounds out to $6K a month. So I have $4K surplus to play with.
In my estimation, cutting that $50-60 a day that I spend on eating out and such isn't really worth it. Dropping my $300 a month car payment for a new car isn't worth it. What is worth cutting out is the hundreds I can sometimes blow on things like unnecessary clothes or electronics purchases. These things add nothing to my life, I usually use them once and forget them.
Spending freely on eating out and buying drinks for my friends and pretty girls at the bar brings way more value to my life. And, paradoxically, it can be a more stable expense. Expensive restaurants just aren't as good as my favorite ethnic spots. My local haunt has cheap drinks and a more fun clientele than the high-falutin spots downtown.
There's a point of diminishing returns on everything you can possibly spend money on. Most of us blow way past that point without even thinking. But if you keep this point in mind, then you can get phenomenal bang-for-your-buck in places that nobody could ever think would be affordable. I took two two-month long trips to Colombia staying in hostels for not a whole lot.
That's good that you have that surplus. I think that's the real reason you can be as relaxed as you are about planning your finances.
I have a much smaller surplus, and of course you're welcome to argue that I should be behaving differently in order to increase it.
But really, spending an hour a week doing my finances (I use YNAB) does not affect my earning potential in any significant way. I don't think it makes any sense to argue that I should stop doing it, and spend that time trying to get a better job. I can do both! That time spent gives me the reassurance I need that I can carry on paying my mortgage, feeding and clothing my family and taking them on holiday, and also that I can very probably meet any unexpected expenses that arise. This is a great feeling, well worth an hour a week of my time.
>My current understanding is that my lifestyle costs a certain amount of money, these days around $50-60 per day. Rounded up that's $2K a month. My paycheck rounds out to $6K a month. So I have $4K surplus to play with.
First you say you don't believe in accounting, then a few posts down you decide to suddenly do some accounting. I'm confused.
I built an accounting app for personal use. My perspective draws from that experience. Of course I can do some rudimentary financial calculations and budgeting if I put my mind to it. The point is, I just don't. The figures I gave are the natural set points, not budget targets. If I just let go and do whatever, that's what I spend.
If I went from $100K to $300K, my personal spending would go up, but not dramatically. I've already found points of diminishing returns for most of the things in my life that I've found that's worth spending money on. I'm sure I could find ways to spend it, but the sort of mindless spending on stupid crap that most people do, I seem to be immune to it.
No. Emotions are the key to all of the previous things, either mastering them or expressing them. That's where one should focus their efforts.