A big part of my day-to-day life is defining and accomplishing microgoals. Microgoals are things that I can achieve in one week or less if I am diligent about it, and they’re quite useful in many aspects of life, including personal finance.
Let me give you a pair of examples. Right now, I have two ongoing microgoals:
The first one is to finish reading and write reviews for five books. These are personal finance and personal productivity/development books for The Simple Dollar. For me, book reviews are the most time-intense posts I do on here and I’m making a special effort right now to get several weeks ahead on them so that I can focus on moving later in the summer and then facing the birth of my daughter in the early fall.
The second one is to define a very precise number that we can afford to spend on the house. This way, I know very well what we can realistically look at for home purchases. This will involve several sub-tasks: some serious evaluation of our financial situation, a phone call to our banker, and so on.
Both of these are larger tasks than I could accomplish in a sitting or in a day, but they’re not so large that I can’t easily wrap my hands around the task and finish it in a week.
The first and most obvious question is how can I use this idea to improve my financial bottom line? There are many personal finance tasks that can be done in a short timeframe, but are very difficult to complete in one sitting. Here’s a list of potential microgoals that can improve your financial bottom line:
Improve the energy efficiency of your home Install CFL or LED light bulbs, install programmable thermostats, clean out your air vents, and make sure your residence is air sealed.
Prepare a certain number of homecooked meals in advance Dedicate yourself to preparing 15 or 20 complete meals that can be stored in the freezer for later use. This way, you won’t be compelled to get takeout – you can just go home, pull the food out of the freezer, and pop it in the oven and soon have a delicious meal at home that’s much cheaper than takeout.
Set a frugality goal Pledge to not eat out for a week, or not visit any grocery or department stores for a week. Make it something challenging. Even the governor of Oregon is doing this, as he’s attempting to live on $21 a week for groceries in order to understand the challenges of living on food stamps. The best goals not only save money, but teach you something about yourself and the world.
Design an investment plan for a long term goal What would you have to do to afford your dream house in twelve years? Plan it out in great detail, down to the point that you could start on the plan tomorrow.
Obviously, microgoals such as these can be utilized in every aspect of life because they’re very effective at keeping you on a task that needs to be done and producing a great sense of accomplishment when you finish.