How To

GTD for Personal Finance

(Jonny Goldstein)

When David Allen wrote Getting Things Done back in 2001, no one predicted it would rise to #52 on the Amazon best seller list and spark an entire productivity subculture.

Like many productivity gurus, Allen recommends prioritizing tasks and eliminating distractions through to-do lists, calendars, and turning off e-mail notifications. But Allen’s theories differ in a few key areas. Unlike Covey’s “Begin with the end in mind,” Allen advocates dealing with today so you can stop worrying long enough to think about tomorrow.

So what happens when GTD meets personal finance?

Here’s four key GTD concepts, and how they can be applied to your money management:

  1. Clear your head by capturing anything and everything that has your attention
    Allen observes that in the information age, the majority of work has to be defined before it can be done. You can’t do anything until you know what you’re trying to do.

    Application: Get everything related to money out of your head and onto a piece of paper.
    No matter whether you’re a financial ninja or a novice, simply writing down all the stuff you’ve been meaning to plan–like financing your kid’s education–will make it FAR easier to tackle. Don’t worry about planning anything, just get it out of your head onto paper.

  2. Operate from the ground up
    GTD methodology says you will only be free to think long-term when you have successfully organized today’s urgent priorities.
    Application: Track how you spend your money.
    Determining long-term financial goals without knowing where your money is currently spent leads to cognitive dissonance. Tracking need not be obsessive. You don’t need to budget every last expense in order to realize your savings goal. As with other tasks, GTD suggests you should focus on a few key areas where you can have an impact, perhaps you can cut back on eating out, or spend less on iTunes each month.
  3. Define projects into outcomes and concrete next steps
    Allen says 90% of to-do lists are projects, not actual to-do’s. Break all of your projects into actual to-do’s.
    Application: Look at your page of financial projects and break them into actionable to-do’s.

    A project like “taxes” will probably include tasks like “gather forms”, “pick tax software”, “enter information in tax software”, and “file taxes.” Once you’ve broken these financial projects into actual to-do’s, you can add them to your calendar and general to-do list.
  4. Have as few inboxes as possible–but not fewer.
    Focusing all your incoming information into just a few buckets keeps things simple. Fewer inboxes means your brain can focus on thinking rather than remembering.
    Application: Streamline your financial accounts.
    Close unnecessary financial accounts or leave them at the minimum balance. (Exception: Closing unused credit cards may impact your FICO score.) Use dedicated accounts for savings , checking, and Roth IRA or 401K.
  5. Build a trusted system so you don’t have to rethink things
    The brain is a phenomenal planner, yet incredibly forgetful. And we’re hyper-aware of that–even while writing this blog post, I worried whether I planned enough time to do my taxes.
    Application: Automate financial reminders whenever possible.
    Mint.com can send you an e-mail a week before your bills are due. (I’ve integrated my recurring financial to-do’s into my regular to-do system–I use Remember The Milk configured for GTD.) Since you can use the Mint dashboard to view all your bank accounts in near real-time, consider switching all your accounts to electronic statements–better for the environment too.
  6. Do a regular review to “clear the decks” and keep your brain clear
    No matter how smoothly your system functions, your brain will still collect stuff. It’s just like cobwebs–every so often they need to be cleaned out.
    Application: Do a regular financial brain dump. Review your accounts regularly.
    Some folks like to review how they spent their money every week. Others prefer a monthly review, so you’ll need to find your own rhythm. This is also a good time to acknowledge failures and celebrate successes.

More resources:

The Getting Finances Done blog has two great posts on GTD + Personal Finance: Part 1, Part 2.