You want a change.
Maybe you want to lose weight. Or get a girlfriend. Or be more productive at work. Or maybe — because this is a financial blog, after all — you want your finances in order: you want to get out of debt, stop getting hit with late fees and overdrafts, and start living for the future, rather than the past. Or all of the above.
So what do you do? Most people fall into a frustratingly predictable cycle: they make Resolutions, say “I’m mad as hell and I’m not gonna take it anymore”, buckle down, grit their teeth, and vow to change by sheer willpower. And it works…for a while. Then they hit a Bad Day, which turns into two, which turns into a week, and pretty soon they find themselves back where they started.
It’s frustrating, but it’s not surprising. As humans, we’re annoyingly irrational. We’re as likely to make decisions from our mood — which, in turn, is influenced by sleep, diet, sunshine, exercise, hormones, marketing, and a thousand other things not necessarily relevant to the matter at hand — as from logic.
So, really, what do you do? You remove your mood from the equation entirely: you create a system.
An example: to avoid late fees, you automate your finances, so that income comes in and bills go out without your interference. To avoid getting hit with overdrafts, you have a monthly “check-in” date on your calendar to make sure that your money is where it needs to be.
Another: so you’re not tempted to go into any more credit card debt, you leave your credit card at home and do your spending with cash. If you don’t have the cash, you can’t buy the dress, the fondue, or the TV.
Another: to help build up your emergency reserve, whenever you get paid, you automatically transfer $100 from your checking account to your emergency savings. Only after that do you budget for the month.
In all of these cases, you make a decision from a point of calm, where you’re not being bombarded by moods or Madison Avenue; once the decision is made, you create a system to help you stick to that decision. As an added bonus, you now have more willpower remaining to spend on making other decisions, like not eating marshmallows.
If the idea of setting up a complete, custom financial system — covering all of the above scenarios and more — sounds interesting to you, drop me a line. I’d be happy to set up a (free!) session with you.
Or if you prefer, next month I’ll be giving a personal finance workshop series at St. David’s Episcopal Church in downtown Austin; in it, we’ll be covering everything from our relationship with money down to the specifics of budgeting tools.
So, how about it? Are you ready for a change?