Yesterday I attended a workshop in San Francisco devoted to personal finance and personal finance tools. This gathering — sponsored by Strands, Expensr, and NetworthIQ — brought together a handful of bloggers to discuss the financial challenges our readers face, and the things they’re looking for in a personal finance tool. (Thus my question on Thursday.)

Though I’m interested to see what sort of application these three companies eventually produce, the highlight of the event for me was meeting some of my colleagues for the first time. I’m impressed. On the whole, personal finance bloggers are a smart and funny bunch with a genuine passion for the topic. Attendees included:

For eight hours, we talked about money and how we use it. I took notes. Here’s a very rough summary of the topics we discussed.

Reporting from the trenches
Most of us use Quicken or some home-brewed money-management system to track our money. Cap from Stop Buying Crap has tried all of the tools, both web-based and desktop. It’s one of his hobbies. Which is his favorite? “I don’t need a money-management tool,” he said. “Pencil and paper, Excel — that’s pretty much how I roll.” This echoes a lot of what you folks told me on Thursday.

SVB from The Digerati Life doesn’t track her expenses in detail. “It’s like a black box,” she said. “I just have one category for expenses, and I don’t bother to break them down any further than that.” She doesn’t have to. She knows that she never spends frivolously, and that she has enough money to cover what she buys. She’s less interested in a tool to track her current habits, and more interested in something that can help her plan for her future.

Jim at Blueprint for Financial Prosperity noted that current personal finance tools allow users to track what has happened in the past. He’d like a tool that can help users decide what to do next based on their life circumstances. James from DINKS Personal Finance agreed. “It would be great to see a personal finance tool that contained the wisdom of a textbook,” he said. This is a fascinating concept — imagine Quicken with built-in advice about home equity loans or lessons on the magic of compound interest!

We wanted tools that can help us get ahead, that can help us with our future. But is this because we’re a group of people who have our present under control? Are we representative of the population at large? We’ve all managed to overcome our mistakes, and have now begun building wealth.

“As your net worth increases, the marginal value of a dollar decreases,” said Jeffrey from Saving Advice. That is, as you save more, each additional dollar you earn makes up a smaller portion of your overall wealth. Also, your psychological approach to money changes as your situation changes. A good tool needs to account for these factors. We don’t want a tool that is one-size-fits-all.

As we’ve learned to control our money, many of us have moved from cash-based finances to plastic-based finances because they allow us to more easily track our spending. “I don’t budget,” added Jeffrey. “I’ve just gotten to the point where I don’t spend money.”

Seasons of life
As the discussion developed, it became clear that there’s no current tool that accounts for the natural “life-cycle” of personal finance. Most people seem to follow a sort of progression, starting with a heavy debt-load as young adults, saving in mid-life, and planning for retirement at the end of a career. Most people don’t know how to prepare for each phase. We make mistakes. “Out in the world, there are terms and conditions you don’t know about,” said Cap from Stop Buying Crap.

Sam from Getting Finances Done noted that a lot of personal finance is about relationships. It’s not about the nuts and bolts of saving and spending, but about how we interact with our spouses and friends. It’s about psychology. Because of this, there’s only so much that any financial tool will be able to help with. A tool that helps you track your spending isn’t going to solve marital problems that are causing money woes.

“Finance is a tool for goal achievement,” James said. He believes that it’s important to define your goals and values so that you know why you’re saving and investing. I agree.

Finally, Flexo from Consumerism Commentary observed that many of the workshop participants had experienced a trigger event that led to a financial epiphany. We did dumb things when we were young, and then something happened to cause us to change direction, and to begin caring about how we spent our money. “How do we reach people with smart personal finance information before they get into trouble?” Flexo asked. “How do we prevent the massive debt?”

It’s a great question. We couldn’t find a great answer. Until you’ve reached rock bottom, you’re probably not ready to listen to financial advice.

The business of blogging
With so many personal finance bloggers in one place, the conversation naturally turned to the business of blogging. We exchanged tips and tricks. I learned a couple of ways to increase subscribers, and hope that I was able to help others move toward their goals, too. Listening to all of these great personal finance bloggers, some common threads emerged.

  • We all feel fortunate to be where we are today.
  • We’re grateful for the help we’ve received from other personal finance bloggers and from our readers. (“My readers are amazing,” a couple bloggers told me. Maybe so, but the readers at Get Rich Slowly are the best!)
  • We’ve all spent a tremendous amount of time building our sites. “I don’t think new bloggers understand how much time is involved,” I said. Others admitted that they, too, treat their sites like a full-time job.
  • We all work toward goals, and we stick with it even when we don’t have the time or the interest. “A lot of being successful is just being stubborn,” said Jeffrey.

“No one ever says, ‘When I grow up, I want to become a blogger.’ You don’t do it for the money,” said Jim from Blueprint for Financial Prosperity. “The real value of blogging is the social interaction, both with readers and with other writers.” He’s right.

Personal finance as personal development
I came away from this workshop with a renewed appreciation that personal finance isn’t just about money. Personal finance is really about personal development, about having a good life while growing toward your goals. It’s about a holistic approach to life. Personal finance is about money, sure, but it’s also about emotions and how you choose to spend your time.