Prescriptive Vs. Responsive Money Management

When we’re trying to rework our finances, it’s tempting to start with the ideal – the ideal budget, the ideal savings rate, the ideal retirement contribution amount.

While there can be a lot of wisdom gained from following such a prescriptive approach, there is another way too, especially when the ideal plan fails.

We all have some financial milieu that is our “normal.” That collection of how much comes in, how much goes out, how and when you pay your bills, how much and how fast you spend on everything else, how much debt you carry, credit you have, and so on.

Because of this reality, anyone, whether they’re starting from a mess or a well-oiled machine, can make improvements without a new overarching prescriptive plan.

We do this by taking a retrospective, responsive approach instead, by evaluating our current state and identifying specific actions or “treatments” to tweak, refine, replace, and so on.

It’s an approach driven from evaluating and responding to your current specific reality, not from laying out a new ideal to follow.

This distinction is important because so many people struggle with money simply because following the perfect plan, doing all the “right” things, becomes overwhelming to keep up with. It feels inflexible and eventually fails. Or requires a level of tracking, monitoring, and inputting that becomes unsustainable.

And, ultimately, the factor that matters the most for financial success is long-term sustainability.

Persisting for the long game is the most important variable, and the game is a long one.

Think Monopoly, not Checkers.

This is why following a financial approach that works for your personality and circumstances is key.

Some people want to lay it all out across a detailed collection of spreadsheets in Excel. Others just want a bills checklist on the refrigerator and automate everything else. The same prescription doesn’t work for everyone.

But a rhythm of evaluating what needs attention, and then carrying out appropriate adjustments, is workable for pretty much everyone.

Layer those tweaks and changes over time, and you can build a pretty strong financial house.

If you’re feeling unsure where to start, where to go next, or are just overwhelmed by the idea of making over your money life, this responsive approach can be much gentler and easier to implement, because it’s more targeted and narrow in scope.

You don’t need to lay out an ideal comprehensive plan and struggle to follow it, starting and stopping over and over. Just find a place that’s high priority for fixing up and take a targeted, scalpel approach to improving it.

Make one small change at a time, revaluate, retool, retest, repeat. That’s the game.

Much like the best diet for weight loss, the best approach to money management isn’t one-size-fits-all. It’s simply the one you can stick with, so don’t be afraid to reverse the usual advice.