Daily Due Diligence (D3)

Author’s note: While recently counseling a soldier I discovered the conversation of investing was completely overridden by an ignorance of the “basics” –  monthly budget adherence and awareness of where their money was really going.  Hence the back to the basics discussion of daily (okay, weekly or monthly) due diligence was born.

Feast or Famine:  Finances are a significant part of everyday decisions.  Often, our money is only given intentional thought during urgent times of the year – taxes, holidays or vacations – paired with the moments when life forces us to evaluate our finances emergently – a family emergency or a flat tire. The suggestion is daily due diligence (D_3^TM), working on a piece of our finance puzzle regularly.  Just as a diet or exercise requires daily effort, the thought that our finances do too should not seem shocking.

Case in Point: How many have created a household budget only to it file away? The price of gasoline can change daily. However, the budget we created once upon a time does not reflect this.  Our budget should NOT be a static document, but one that mirrors the myriad of life events.  How many financial counselors have experienced the answer; “I really don’t know how much I spend on__________.”?  If creating a budget is the universal starting point when taking control of our finances, then the flexible classifications should be as accurate as possible.

The task of D_3^TM could seemingly be an unwelcome addition to our already full daily lives.  A simple suggestion for making this necessity more manageable follows:

Track one item of significant expense a month.

First month’s challenge: How much do you actually spend on groceries?  What is our household definition of groceries?  Is this only the food our family consumes or does this include shampoo and dog food?  In our budget, where is our daily cup of commute coffee located? Is it categorized groceries, eating out or not at all?  Saving our receipts (even a cash purchase) for one month and totaling is not hours of contemplation. If groceries are already an expense that is a realistic number within your household, then try tracking total gasoline expense. The results may be surprising.  Psychologists have long espoused the theory that “awareness of a behavior can create change”.

The impetus for simple D_3^TM is to override the common feeling of “my money controls me/my decisions”, and replace them with “I control my money.”  D_3^TM has the potential to open discussions of spending within a household, teach our children the beginning basics of money handling and most importantly, create a feeling of control, ownership, and peace of mind.

In future articles, I want expand on some D_3^TM techniques.  Please share your suggestions and thoughts on regular financial maintenance.

Guest Contributor: Heather Baker, AFC^®, FINRA Foundation Military Spouse Fellowship Program Assistant