We’ve all heard the maxim of “taking it one day at a time.” I’ve even discussed making a one day commitment to personal finance change. But for most of us (I can certainly say it’s true for me and my friends and coworkers), the biggest problem to achieving bigger goals, like paying off credit card debt, paying off a home mortgage, and avoiding frivolous spending, is the day to day grind of it. It’s so hard to continuously save and save and save, while it’s so easy to buy things we don’t really need.
My solution to solving this quandary is simple, and it ties into my GTD philosophy: I set very specific goals to achieve each day with clear metrics for success. When I wake up each morning, I (effectively) have a “to-do” list ready to go for me that includes a LOT of things on it. The first part are specific goals for the day as a whole: don’t spend frivolous money, don’t eat fast food, etc. I don’t include everything on it, just specific things that I know I need to work on.
Associated to each of these, I have a specific metric for success. For example, if I were to set a specific goal of not eating fast food, the metric for success is very clear: did I eat fast food today? Another example is that I allow myself a running budget of $10 a week to spend on reading and writing materials (my main hobby), so my metric relies on whether or not I exceeded my reading and writing material budget. This is a real challenge for me because I am a reading fanatic, so I often use this as a way to remind myself to use the library instead of visiting Borders or the like.
We all have goals, though; I know I sure did before I started doing this. So why go to this effort? There is one big aspect that sets this apart from just setting a few goals at the start of the day: at the end of each day, I take a few minutes to literally review each of these goals. This gives me a chance to really feel good about doing something right today, as well as reflect on any mistakes I made that day and what I can do to correct them.
Here are five examples from my checklist for today so you can see what I mean.
Goal: Don’t eat fast food.
Metric: Did you eat any fast food?
As I mentioned before, quitting fast food was one of my New Year’s resolutions, and so far I’ve been pretty successful at it, overcoming temptation more than a few times. Reviewing the goals before I leave for work in the morning has helped a lot, since I most often eat fast food for breakfast.
Goal: Spend minimal money on food while not at home.
Metric: How much did I spend on food today?
This is an overall goal to convince me to do more frugal things in terms of my diet. Instead of getting soda out of the vending machine, I am making an effort to drink water. Instead of eating out for lunch with others, I am making an effort to bring leftovers or eat healthy items I have stored in my desk (canned tuna, crackers, health bars, etc.). Most days I’m successful; some days, I’m not. At the end of the day, I ask myself whether any mistakes I made were worth it, and this helps build my resolve for future days.
Goal: Learn about one stock in detail.
Metric: Can I name ten notable details (in terms of investing) about the company I looked at today?
Lately, I’ve been looking at a lot of individual stocks in an attempt to select some individual stocks to investigate in (you can peek at some of the fruits of this labor if you’re interested). This keeps me on the ball with this effort, both in terms of actually doing it and also not doing it halfway. It’s been quite useful in driving me to do stock research in spare moments.
Goal: Check on local property listings.
Metric: Did I find one new house of potential buying interest?
Right now, my wife and I are taking baby steps towards buying a new home, and a big part of that is studying what the local housing market is like. I try to keep vigilant with this, so I plan on reviewing the local housing market three times a week. I have a lot of bookmarks, so it’s mostly a matter of going through the bookmarks and seeing what’s new. I identify houses of interest, then mention them to my wife.
Goal: Save a $20 bill.
Metric: Did I save or invest at least $20 today?
I don’t literally save that money on that specific day, but I do ensure that I’m putting at least $140 a week into some sort of savings or investment or else I feel like a severe failure. This includes a subtraction of any unnecessary withdrawals due to poor budgeting, something I do on occasion and I really chide myself over. Yet when weeks go by, over and over, where I can just leave things alone and quietly I save more than $20 a day, checking off this goal gives me a warm feeling.
Setting such short-term goals makes it easier for me to address my personal finance goals on a day to day basis. I spend less on silly things and save more instead, which is exactly what I want to be doing when I sit back and reflect on my recent activities.