It's all about the data if you want to be all about the Benjamins

I'm a data-nerd, and I'm an optimizer.  Here are two examples of my nerd-dom outside of personal finance:

  • I have worn a pedometer for the last 4 years (my latest one is a Fitbit model) and keep track of my daily physical activity to make sure that I am hitting my fitness goal of at least 10,000 steps per day.  (I hit it about 6 out of 7 days a week on "normal" weeks.)
  • I also like to keep track of my vehicle's gas mileage so that I can adjust my driving techniques to keep the mileage as high as possible.
The Fitbit One

The Fitbit One

When it comes to personal finance, I'm probably your average* data-nerd.  I learned the Rule of 72 when I was 12, I check my accounts on Mint.com almost daily, I use spreadsheets to run what-if scenarios for investment plans, and my favorite bedtime reading is a good personal finance book or blog.

*Average is probably a relative term. But I think I'm average compared to other personal finance bloggers. 

I would have to say that one of the biggest keys to our family's financial success has been data.  Before my husband I got serious about tracking our expenses, we didn't really know where our money was going and as a result ended up wasting a lot.  He would go to the bookstore and eat out for lunch most days and I would let trips to Target for "just one thing" turn into 10 things.  We didn't have any concrete financial goals and as a result didn't feel like we were getting ahead.

But then we decided to start doing three data-oriented things that have helped us get to where we are today and will serve us well into the future.

  1. Automated tracking of our money.   I used to record all of our expenses in Quicken.  Then I learned about Mint.com.  Instead of wasting time poring over receipts and trying to reconcile my balance sheet in Quicken with my bank account statements, Mint does all of this for me whenever I login to the site.  Just. like. that.  I can now devote my financial accounting time to more important things like investment research.   I know some people are worried about their personal data getting hacked, but Mint's parent company, Intuit (who also owns Quicken), owns TurboTax.  Intuit files taxes for millions of Americans every year, so I feel comfortable using their Mint.com app.  I see this as the fundamental base for anyone's financial success.  Know where you've been to know where you're going.
  2. Monthly budget meetings.   We started meeting at least monthly to discuss the outcome of the previous month's budget and to agree on the budget for the upcoming month.  This meant discussing not only where we spent our money, but also how much we put into savings and gave away in our church tithe.  These monthly discussions provided a scheduled time to discuss overspending, make adjustments for unexpected expenses, and celebrate sticking to our budget goals.
  3. Attach dollars to dreams.  We started discussing what each of us would like to do if money was no obstacle.  And then we figured out what it would take to achieve those dreams.  Those conversations are how I decided to get out of the rat race and achieve my dreams of owning real estate that pays me and being my own boss. We calculated that it would take $1 million to make that dream a reality at age 35 and then we made plans to achieve it.  My husband wants to travel to certain places, and I want to travel to others.  So we will develop a plan to do that using his salary.  It may not sound very "dreamy" to crunch the numbers about how to achieve a dream; but if you don't, I can almost guarantee that your dreams will stay just that.

Do you have any other data-oriented tips for financial success?  Please share below!