Albert Einstein is widely credited with saying, "The definition of insanity is doing the same thing over and over again, but expecting different results."
While I don't view that choice as insane, I do see it as a common trap that most of us fall into during our lives. Why? We're humans.
Human beings are creatures of routine. Even the most spontaneous among us stick to a lot of routines and habits in life. For us, it is challenging to try different approaches to the problems in our life.
Yet, that phrase still holds true. If you want different results than what you're getting, you have to try different approaches.
The things you did yesterday have brought you to the life you have today. If you want something different, you have to do something different today to create a different life tomorrow. There's no other way to get there.
So, what kind of results are you looking for in your life?
If You Want a Better-Paying Job...
Some people enjoy the job that they have - or at least enjoy it more than the alternatives - but they want better pay and more opportunities related to that job. They don't want to be working the front desk forever or to be stuck in the entry-level slot for the rest of their years. They want more.
To get more, you have to do more.
You have to have skills that employers want. The job that you want likely requires skills that you just don't have. Yet.
In order to move you up into that position - or to find that kind of position in another organization - you have to have the skills that the job requires. There's no shortcut around that.
The catch is that there isn't some magic spell that will move you from where you're at to where you need to be to get that job. It's up to you.
In other words, you have to devote your own time and energy to developing those skills. To get there, you flat out have to devote some spare time and energy to building new skills.
Often, people assume that these skills are built by going back to school, and that's sometimes true, but there are also many opportunities to build skills without returning to school.
You can build skills by volunteering in your community. You can build skills by working on community projects, like software engineers working on open source projects. You can build skills by starting a side business related to your field.
Education. Projects. Certifications. Experience. Those are the things that are going to make your resume better. Those are the things that are going to get you an interview. Yet, an interview isn't enough. How do you cinch the job from there?
You need to understand what exactly is needed in your "dream job." Yes, there are often requirements on paper, but that doesn't really tell you what you'll need to get from here to there.
Do you have strong professional relationships with other people in your field? If not, build them. This goes beyond being friends with the other person who works next to you.
Are you proactive in taking care of problems? In other words, do you step back and look at the big picture, then address potential problems before they happen and try to find ways to make things work better during crunch times?
Do you communicate well both with your customers and with your managers?
Those are the kind of things that people look for when hiring for better jobs. Those things, however, aren't always listed on the "requirements" for the job. They are things that are "icing on the cake" - the kinds of things that show up when you interview and set you apart from the rest of the field.
If you want a better job in your field, you need to be building these things in your spare time at work and your spare time outside of work.
You have to be unafraid to push yourself and risk failure. This sounds like a lot of work. It also sounds like you might very well fail anyway.
Guess what? That's all part of the equation. You are going to stumble. Things aren't going to happen exactly like you want them to.
You have to get up and brush yourself off when that happens. You can't just blame society and give up. You have to keep pushing. Your skills weren't quite strong enough yet. Keep polishing them. Keep trying.
If You Want to Not Be Worried About Debt All the Time...
This describes me several years ago. I was constantly worried about debt, particularly in the evenings as I was reflecting on the day or when I was about to drift off to sleep. It kept me up late many nights and that lack of sleep and energy kept me from focusing at work or taking care of many things I should have been taking care of.
As with the job plan, this one's all about making good choices for yourself.
You have to stop buying junk. The only way a person gets into debt is by spending morethan they earn. That makes sense, right? If you spend less than you earn, you have no reason to go into debt and your savings will build up. If you spend exactly what you earn, you still have no reason to go into debt - you just won't be building any savings. The only way debt enters the picture is by spending more than you earn - or by having done so in the recent past.
Thus, you have to shift from spending more than you earn to spending less than you earn and you need to do it quickly. The only real way to do that is by getting a grip on your spending. You have to cut out your least important spending. Period.
Look throughout your life for the least important purchases. A good place to start is with the name brand items you buy. Have you ever tried the generic versions?
Another place to look is all of the money you spend going out, eating out, and entertaining yourself. How much of that spending has any lasting value for you whatsoever? And, if it doesn't have lasting value, why not do things that don't involve spending so much money?
You might also want to look at your regular bills, like your energy bill. What kinds of things can you do to permanently cut your energy spending, like air sealing your home or installing more energy efficient lighting?
You can give all of this a nice boost by going through your closet and selling all of the stuff you find there that you haven't used in the last year. Use that money to whack away quickly at your debts.
You have to have a plan. A debt repayment plan is an essential tool for getting rid of your debts. It helps you to identify which debt should be receiving all of your extra payments.
The basics of it are really simple. Just list all of your debts by interest rate, with the biggest interest rate at the top. Apply all extra payments to whatever debt is at the top of the list. When that one's gone, cross it off and continue with the next one down the list, and repeat until all debts are gone.
You have to have patience. A big pile of debt isn't going to disappear overnight. It isn't going to disappear in a year, either. You have to be patient.
The thing is, many people never have that patience. They get "bored." They expect results immediately from a week or two of effort.
You will never, ever succeed if that's the approach you take. Instead of being "bored," be creative and look for new approaches and new things to do. Look around your community or on sites like Meetup for new things. Instead of expecting huge results immediately, keep track of your debt balance over time and look at how much it's changed each month.
If You Want to Have a Brand-New Career in a Field You Love...
Perhaps you're stuck in a job that you don't enjoy and you want to try something different, but it seems almost impossible to make that leap. How can you ever go from this career to that career?
The thing is, people make career leaps all the time. It just takes some willingness to make some real changes in your life.
You have to have a smart plan in place and some people to help you polish it. What is your destination? What things do you need to have in place to make it there? How can you put together those things in your spare time or during some kind of sabbatical period?
Those are all hard questions, but they're questions that you need to answer seriously and honestly. It will take some serious introspection and some serious time for research.
Of course, you may still come up with a plan that's completely unrealistic, even after all of that. That's why it's useful to take any such plan to trusted people in your life. Look for people whose opinions you trust. At the same time, don't be afraid to reach out to people in that field that you won't necessarily be competing against in the future and have them help you find flaws in your plan.
You want a plan that's going to work, and without this preparation, you're likely to fire off your rocket of action in the wrong direction.
You have to start building a cushion to get yourself through the transition period. Whenever you switch careers, there is often a bumpy transitional period as you take time off for education or adjust to a lower starting salary. That can be difficult, so it's good to start preparing now for that transition.
Spend less than you earn. Bank the rest. Cut back on your least important spending. It's a familiar recipe, but it's the recipe that works.
The goal here is to make sure that you can make this big switch without losing important parts of your life. You need to keep food on the table and a roof over your head - and the heads of the people in your immediate family.
You have to start learning - and, if possible, doing - today. Even while you're figuring out a plan, you need to start carving out time (and energy) for learning the skills you're going to need at your new job. Look for any and all opportunities to do that.
This might mean stepping back from some commitments in your life right now. This might mean taking some basic classes online so you're up to speed for the more challenging material. This might mean simply doing it, whatever it might be.
The real challenge for most people is simply finding the time. Cut back on the least important things in your life. Don't be afraid to de-commit from a few minor responsibilities. Cut back on some of your more useless hobbies, like channel surfing or web surfing in the evenings.
If You Want to Never Have to Work Again...
Some people - myself included - dream about financial independence. A future in which I no longer have to work for a living seems pretty sweet.
However, it's not easy to get there. It requires making a lot of very difficult decisions and choices along the way.
You have to have a vision for the future. If you're doing this simply because sitting around all day playing Xbox sounds awesome, you're probably not going to be motivated to stick with it. You need to have a compelling reason to do this, because it's that compelling reason that will help push you through.
What would you do with your life if you didn't have to work for income? What things would you achieve? What would you fill your life with?
Those questions aren't easy ones to answer. They require a lot of thought and they will likely involve consideration of life paths that you're not going to follow up on. That's okay. When you do find the right thing, you'll know, because it will start to drive you forward.
The key thing is to realize that it is possible. I'm well on my way to that destination myself. You can make that vision a reality, and when it's an exciting vision, it can really help drive your life forward.
You have to put a strong check on your short-term desires. This is the big one. For this dream to happen, you have to start living way below your means. You simply can't spend money on every whim and desire that comes your way, because if you do that, you simply won't have the means to retire early.
That means that you need to go through a rather challenging process of evaluating how you spend every dollar and asking yourself whether that dollar spent is providing a lot of long-term value in your life. If it's not, you need to cut that spending.
This doesn't mean living like a hermit. This means that when you do spend money, you're spending it on things that will have a lot of value in your life for a long time.
You have to start investing for the future. Simply spending less isn't enough. You're also going to have to take the extra money that you earn and don't spend and invest it sensibly.
There are many avenues and philosophies for doing this. Some advocate loading up retirement accounts to the brim and taking advantage of early retirement clauses in those accounts. Others are in favor of simply putting that money into taxable accounts and holding onto the investments that you buy so that you're not relying on a loophole.
Regardless of what you choose, the most important thing by far is that you start saving and start saving now and start saving as much as you can.
If You Want a Better Home for You and Your Family...
Many families are squeezed into a home or apartment that's really small for their needs. Some parents are forced to enroll their students in a poor school district simply because of finances. Others might not feel safe in their neighborhood.
Whatever the reason, you want a better place to live, but it seems almost impossible to reach that point.
You have to sharpen your credit. Almost always, this kind of financial move will require a home loan, and you're not going to get a home loan with terrible credit.
The first step is to grab your credit report (the federal government allows you to look at each of your three reports once a year for free) and look for problems. What debts are past due? What debts have a huge balance compared to their credit limit? Do you actually know what everything is on your credit report? Take care of all of those things and you'll be in pretty good shape.
Even if you never look at your credit report, though, you can already take most of those steps. Keep current on all of your bills - even your utilities. Pay down any credit cards that are close to the credit limit. Stop adding to the balance of your credit cards, too. If you have creditors calling you, ask them to send you the material in writing and work through fixing those problems.
- Related: How to Build Good Credit
You have to have your debts - and your spending - under control. You have to be spending less than you earn or this will never, ever work. This means getting a grip on what you spend each week and each month and striving to have more in your checking at the end of the month than at the start of the month.
How do you do that? Start by cutting back on the least important spending. Whenever you're buying something that's not completely essential, ask whether this purchase will be something you still value in a month. If it's not, skip it. Take other steps, like considering generic items in place of your name-brand purchases.
This needs to become your natural way of doing things because if you can't make ends meet now, you're not going to be able to do it if your housing bill goes up. You need to be spending less than you earn now.
You have to save up and be realistic. If you're spending less than you earn, then you have the capacity to start saving the difference between the two. Use it to pay off your worst debts, then start saving for the future in a humble savings account.
You need to be realistic here, too. You can't expect to be financially perfect and ready to buy a house or upgrade to a larger apartment in just a few months. You need to get your finances straight and have some money in the bank and that takes time.
Patience is a real virtue here, but so is realism. You're not going to move from a 500-square-foot apartment to a mansion. Think instead about the smaller upgrades. What would a few hundred more square feet mean for you? Would it mean that it's easier to cook at home? Would it mean that each of your kids has some private space? Those are real, worthwhile goals that are actually attainable.
If you keep doing what you're doing now, you're never going to have anything different than what you've already got.
For me, that causes me to look at the financial path that I'm on. Unless I do something different, I'm going to keep marching down that path in the same way that I have been for the last few years. Am I happy with that? I'm okay with it, but I could be doing better.
How about you? Are you happy with the financial path you're on? Or do you dream of something more?
If you're dreaming big, it's time to start changing how you think and how you live each day.