I don’t have a lot of hobbies but when the weather gets warm, I enjoy outdoor running and gardening. I am a relaxed gardener because I only focus on low maintenance things I can grow (right now that is habanero peppers). Other than the occasional protection from aphids, all I do is pruning and harvesting. The sun and rain take care of the rest and provide the plant with what it needs.
When it comes to investing, I have found that it is better to feed it and forget it. When I constantly monitor plants or investments, I tend to get impatient or fearful and tend to do things in the short term that sometimes hurt the long-term potential of the plant or investment. Some of my best investment returns have been from 401Ks and forgotten stocks that I owned because they literally sat for years untouched and were able to grow on their own.
My other hobby of running helps me stay active, decompress, and simultaneously get caught up on audio books/podcasts. One thing that is always distracting is running past trash on the ground. I always want to pick it up and throw it in a trash can if I see one nearby. Trash is not bad when it is put in the right buckets (recycling bin, compost bin or landfill) but when it does not or gets tossed on the ground, things can pile up quickly and be harder to clean up if not addressed right away. Spending is like trash. While investing needs a more hands off approach, spending needs a constant watchful eye ready to clean up when needed.
When spending appropriately, things are ok but when your spending gets out of whack with your income, it can accumulate like trash. The spending trash can come in the form of depleted savings, accumulated debt, or a cluttered house.
The equivalent trashcan for spending would be a budget. Your budget is your bucket to make sure your money is going into the right areas. Spending needs monitoring for a few reasons:
- You need to make sure things are categorized properly.
- You need to make sure things are not piling up in the wrong places.
- Monitoring will know immediately if there are any abnormalities (billing errors or identity fraud)
Monitoring does not mean you have to be extra restrictive. While too much monitoring of your investments is not good, not enough monitoring of your spending is not good in the long run. That same attention focused on your spending habits helps you come up with a better and more sustainable budget.