Financial systems are “set it and forget it” applied to your personal finances. They are valuable because they save you from having to worry about your money. For example, instead of making a decision to save each month, it happens automatically. It helps you focus your attention on things that do matter, like creating value for other people.

My favorite guide on creating systems for personal finance is by Ramit Sethi, called The Ultimate Guide to Personal Finance.

In it, Ramit talks about a prescriptive budget and a descriptive budget. The descriptive budget is where your money is currently going. Due to my obsessive tracking of my expenses in Gnucash, I already had this. Do you need to be like me? Probably not—there exist tools like Mint.com that can aggregate various spending accounts into one convenient place.

A prescriptive budget is a plan for spending each month. Here’s one way to create a spending plan:

• Fixed costs: things like rent, utilities, debt
• Investments: your 401k and Roth IRA contributions
• Savings: Build up an emergency fund if you haven’t already. Otherwise, this is for accumulation fund for things like vacation, house down payments, etc.
• Guilt-free spending money: Groceries, eating out, shirts from REI, movies.

Then you want to create systems that automate the categories in your prescriptive budget. That way, you spend less time worrying about money and more time enjoying the guilt-free spending money.

Does that sound like more fun than constantly worrying about financies? If so, head on over to The Ultimate Guide to Personal Finance.