The following is a guest contribution by Kim Palmer.
As much as I love the idea of tracking my money and sticking to a budget, Excel spreadsheets tend to make my eyes glaze over. All those lines and numbers remind me of some of my least favorite economics classes in school. They hardly get me excited about reaching my big money goals, which is what I think a good money management system should do.
As I was searching for better system for myself, I came across an entire community of people who were on a similar search in the business world. So-called creative entrepreneurs, or people earning money from their artistic pursuits, were building new and more intuitive ways of tracking expenses and other standard business tasks.
My ‘aha moment’ came as I was reading Jennifer Lee’s The Right-Brain Business Plan, which lays out a creative and visual approach for setting up a business. What if we applied this right-brain approach to personal finance? Would people like me, who would rather doodle on a sketchpad than tinker with a spreadsheet, find budgeting more enjoyable?
My Visual Budget Map
I soon discovered than I am hardly the first person to come up with the idea of combining art and money. Even websites like Mint.com take a visual approach, with colorful charts and graphs to help people monitor spending. But I still couldn’t quite find what I was looking for, which was a goal-focused, visual way of budgeting and organizing my entire financial life. So I created it myself, and ended up launching Palmer’s Planners, a line of money planners designed to help people navigate goals and life events, on Etsy.
Right-brainers, it turns out, like focusing on the big picture, and don’t like to get bogged down in details, especially when those details signify limits, as budgets tend to do. That’s why starting with a vision board of our big money goals and dreams can work better than starting with a spreadsheet.
Making a vision board is easy; you just collect images of what financial success looks like to you from magazines and catalogues and paste them onto a piece of poster board. If you prefer a digital approach, you can do the same thing by searching for images online and pasting them into your program of choice. Now that you have those big goals in mind, the next step is figuring out the budget that will help you reach them.
But we’re not talking about a traditional budget. Sticking with the right-brain approach, I prefer to create a visual budget. So instead of opening up a spreadsheet, get out some markers or colored pencils. Draw large circles for the biggest and most important expenses in your life. For most people, that will be food, housing, and transportation. Draw smaller circles to signify the lesser expenses, from household costs and debt payments to luxuries such as entertainment. Then, use colors to create more detail: Circle the absolute necessities in red, important needs in blue, savings in green, and luxuries in purple.
Now that you’ve mapped out those spending priorities, you can see how it compares with your actual spending. This is where we can’t ignore the numbers anymore, but that doesn’t mean it has to be painful, especially since we’re already done most of the work. Free online tools from your bank or Mint.com can make it relatively painless to see just where your money is going. Then, you can compare it to your map of priorities, and see where adjustments need to be made.
Without even opening a spreadsheet, you’ve created a visual budget map and are on your way to meeting your money goals.
Do you have any creative money management systems of your own? I would love to hear them. Please share them below.