Focus on Progress, not Perfection

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When I work with families, they tend to share a few characteristics

– They’re incredibly bright, which makes them good at seeing lots of possibilities in situations which leads to success but also leads to massive amounts of worry and indecision on some complicated issues
– They’ve been achievers for most of their lives, having success throughout school and a history of receiving accolades
– They’re achieving the financial success that they always expected, but are now quite hesitant to make decisions and take steps forward.

I think these 3 characteristics are all related, and work together to create a storm of fear and indecision for the big choices they face.  If you’ve always gotten praise and pats on the back, making choices that might not be right can fill you with fear.  Add onto that the cost and burden of not making good choices in this area, such as not being able to provide educations and retire with the comfortable lifestyle that you’ve envisioned, and it becomes incredibly difficult to make any moves at all.

Yet, for many of us that find the above characteristics familiar, amazing is what has gotten us this far.  We’re collectively talented, focused, successful, and used to doing things that to many are amazing.  So, how can you get started on your financial future if amazing is the bar that you have to meet to feel good?

The answer is:  You can’t. You’ll read another article, ask a friend for their opinion, meet with a few people, and ultimately end up not making any changes or progress, because you can’t be sure of the right answer or the right pathway.

Hard truth:  Success in your financial life isn’t about perfection. 

Success in your financial life looks like a lot of small choices that are difficult to see how they’re making significant progress, but ultimately it’s all we can do.  Beyond taking advantage of the big moments like bonuses, inheritances, and other windfalls, we’ve got to make it to our financial goals with the resources we generate on a bi-weekly or monthly basis, and becoming more successful in understanding those habits and making small changes is what leads to the results we’re seeking.

Dave Brailsford, the General Manager for Great Britain’s professional cycling team called this the “aggregation of marginal gains”.  When he took over the cycling team, he had a goal to win the Tour de France in 5 years, something that no cyclist from Great Britain had ever done.  He started with the theory that our professional cyclists were all amazing at training, riding, and strategy, and that there were likely no very large gains or changes to be made.  Rather, they focused on seeking “the 1 percent margin for improvement in everything you do.”  These improvements in many areas built up to a win for Great Britain in the Tour de France in 3 years, not 5, and are what can allow you to reach your financial goals.

Chances are, if there were $1,000 per month to find in your budget you would have already found it.  It’s small, subtle changes that will build up to the goals you’re hoping to achieve.

How do you find those small, subtle changes?

Review last week’s spending every week.  Doing a monthly review is tedious, and it’s hard to remember expenses from early in the month (what did I buy on Amazon on the 3rd?), but it’s pretty easy to remember what you spent on Amazon on Tuesday.  Look for patterns.  What spending decisions do you feel good about when you look at them again?  Which ones do you wish you could have another shot at?

It’s hard to say ‘no’ without a bigger ‘yes’.  Spending decisions are often about saying no to something so you can save the money for something else.  What are you willing to say ‘no’ to now, in order to be able to say ‘yes’ to a bigger goal, like a new house, travel, or starting a business?  Whatever the ‘yes’ ultimately is, get incredibly clear about it.  The more images and details you can put around it, the easier it is to make choices to support that vision.