I love systems. I’m not exaggerating when I say I try to systematize every single area of my life. I have a system for grocery shopping, a system for writing, and even a system for showering.

Systems are foundational to my success. Any time I start to notice areas of negativity in my life, I just have to find where I’m not following a system. Once I get back on track, my systems allow me to put the right decisions on auto-pilot.

Systems give me the freedom to pursue my goals. Systems allow me to explore new avenues, generate new ideas, and help new people.

It seems counter-intuitive, but systems are the greatest source of flexibility in my life. By ensuring I don’t have to make decisions about the little things, I can free up my mental capacity to do the things that matter to me. I can pursue my Hearthstone interests knowing full-well that my systems are working in the background.

The Importance of A Money System

We’ve already established that I have an obsession with systems. While my love affair may be unhealthy, that doesn’t mean systems aren’t important. Especially when it comes to your money.

Having a money system is the number one most important thing you can do for your finances. A money system ensures you can reach your long-term financial goals while still enjoying your life today. Systems remove the stress you feel around money and replace it with peace of mind knowing everything is good to go.

My money systems have allowed me to book a spur-of-the-moment trip to Norway and buy my loved ones amazing Christmas gifts, all while staying out of debt and investing for my future. Talk about freedom and flexibility.

Set it up once, use it forever

The beauty of systems lies largely in their simplicity. The more complicated you make a system, the less likely you are to stick with it.

Because of that, it’s important to make sure your money systems are both automatic and easy to maintain.

An automatic system is one that works in the background. It looks something like this: you get paid on the 1st of the month. On the 2nd, your bank automatically transfers 10 percent of this to your savings account, and another 10 percent into an IRA. On the 5th of the month, your bank pays all your bills for the entire month. Then, enough money to cover all your fixed expenses is transferred to a separate checking account. You log on to your bank’s website on the 7th to see how much you can spend this month.

Here’s the beauty: you didn’t touch the money at any step in the process. When you check on the 7th, you know that you can spend that entire balance down to zero. Completely guilt-free. Your system has already taken care of saving, investing, bills, and fixed expenses for you. All that’s left is for you to enjoy your life. Incredible.

Even better, next month the cycle will repeat itself. Your system works in perpetuity. You never have to stress about money again, the robots are handling it for you.

If you take the time to set your system up in the beginning, you can use it forever to live according to your Hearthstones. You'll hit goals you didn’t think were possible.

First-order negative, second-order positive

Setting up a system requires something called second-order thinking. It’s a fancy name for something that sucks now, for a massive payoff later. Think about going to the gym in January so you’re ripped by June, or flossing now so your dentist doesn’t yell at you.

People tend to only think about first-order consequences. We look for the path of least resistance, the thing that will hurt the least right now. This is a terrible way to go through life. It will lead to you doing so many things you regret. Things that move you further from where you want to be.

To set up a successful money system, you need to think about second-order consequences. Setting the system up initially is going to suck. It will take work and thought. It might even require you to switch banks or open new accounts.

It’s way easier to ignore a sound financial system in favor of doing it the way you always have. But that won’t move you closer to your goals.

A solid financial system will save you so much stress down the road. It’s better to power through the tough times getting it set up now than deal with constant stress forever.

Find The Best Way To Do Something

The beauty of establishing a financial system is it allows you to find the absolute best way to do something. An automated system is so much better than having to remember to save for retirement or leave enough to buy groceries every month.

When it comes to financial systems, there is a right and a wrong way to go about it. The right way is to leverage technology and automation to lift the burden off your shoulders. The wrong way is to continue stressing about your money, forgetting to pay bills, and incurring massive fees.

More work upfront means less work down the road

Setting up a money system takes work. If you’re like the average person, you’re probably operating with one checking account and one savings account, both at the same bank. Maybe you have an employer-sponsored retirement account.

That way may seem easier, but it’s only leading to stress, confusion, and overspending. A solid system is the bedrock of peace of mind when it comes to your money, and a solid financial system takes time and work to set up.

In all the work and research I’ve done, a good financial system needs multiple parts, all working together in the background to give you your ideal life. You need checking, savings, fixed expenses, and retirement accounts. They also tend to need to be at multiple banks. Yikes.

Luckily, I’ve done the groundwork for you. I’ve created an exact template you can use to create your own financial system. I even tell you exactly which banks you can use to get everything working seamlessly.

To get access to my Ideal Money System Template, subscribe to my email list and I’ll send it right over. You can find that link at the bottom of the article.

Be intentional

We’re intentional about the food we eat. We’re intentional about the clothes we wear, the cars we drive, and even the movies we watch.

Yet so many of us aren’t intentional when it comes to money. We spend mindlessly or carelessly, forgetting to take bills or goals into account.

Developing a good financial system requires you to be intentional. You have to slow down and think about where you want to end up, then work backward to determine how your money can get you there.

It isn’t difficult, but it does take work. You have to snap yourself out of your current pattern of spending before you can create a new one. Your new system will provide you the financial freedom you didn’t think was possible. You just have to get it set up.

Educate yourself

I’ll assume that since you’re reading this post, you’re interested in improving your financial literacy. That’s a great start, and something you’ll need to continue as you build and maintain your money system.

Your system will only be as good as your knowledge. You’re setting up a money system not to avoid having to learn, but to avoid making poor decisions in the heat of the moment. Your money system provides you the freedom and flexibility to make better financial decisions. You’ll still need to know what those better decisions look like.

An automated system takes the stress off your shoulders. You know your needs are met and you’re working toward your goals. But an automated system doesn’t free you from having to know what’s going on with your money. You need to understand how it’s working so you can make sure it’s working for you.

Find other people who resonate with you

On your journey toward a financial system that works for you, look for like-minded people. If you want to retire at 40, the system of someone who’s planning on retiring at 62 just isn’t going to work for you. Someone huge into buying rental properties will have a different system from a perennial renter. That doesn’t make their system bad, it’s just the wrong one for you.

Look for people with similar beliefs and goals, and ask them how they’re managing their money. Chances are, you’ll pick up some ideas and tips you hadn’t thought about.

Even if you can’t find other people exactly like you, that’s okay. People with slightly different goals will have important insights into a good money management system.

It’s also important to bear in mind that most of the talk about individualizing systems to you is just marketing. It’s an attempt to get you to buy one financial product or service over another.

The truth is, most people need pretty much the exact same system for their money. The system I outline in my free template will work for the vast majority of people.

You may want to tweak the percentages to better align with your specific goals, but the automated flow of money through the correct accounts should be exactly the same.

Let the experts handle your blindspots

A great thing about systems is they get you most of the way there. You could adopt the system I outline and never worry about your money again.

But there’s a good chance that a time will come when you need to deviate from your system. Even the best system will need the occasional tweak. Things come up that you weren’t planning for (like trips to Norway), and you need to adapt. Or maybe you decide to buy a house or move to a new city way sooner than you were anticipating.

Large decisions can have massive personal, financial, and tax consequences. When it comes to those types of decisions (I’m talking houses and cars and taxes and moving), it’s best to let the experts handle your blindspots.

Financial advisors and accountants can help you handle all the financial and tax implications of some of the bigger events that happen in your life. It’s best to reach out to experts and let them fill in the gaps in your knowledge. I can’t tell you the number of people who ended up in bad situations before they walked through the doors of my VITA tax site. Had they come to me before trying to handle things on their own, they could’ve saved themselves hundreds and sometimes thousands in fees and penalties.

Experts are an important part of the financial system. Let them handle the things that fall outside the scope of your money management system. I promise the price is worth the peace of mind.

Conclusion

A personal money management system is hands down one of the best decisions you can make for your finances. Setting up an automated system to handle bills, saving, investing, and goals will take so much weight off your shoulders.

By sticking with a system, you create freedom. Freedom to pursue your passions. Freedom to live according to your core values. And of course, freedom to spend your money on a life that excites you.

Interested in my template for a fully automated money system? Sign up to get the guide!

It includes step-by-step instructions for setting up the exact system I use for managing my money, including the exact banks and accounts I suggest.

I know this system works. I sleep easy at night knowing all my goals are met, and I have the money to spend on pursuing my dreams.

So if you’re ready to stop stressing about your money and start making it work for you, grab that free template below!