Most of the strategies I write about on The Simple Dollar are quite simple for most adults to understand. They’re not complex ideas. They’re not difficult to understand. They’re not challenging to visualize. They are things that almost all of us can do – some might require us to have a little bit of money in hand first and use that to grow more, but most don’t. Most of the techniques are just refinements of things people do all the time in ordinary life.
Personal finance success is not rocket science – it’s the furthest thing from it.
Spend less than you earn. Do something smart with the difference, like contributing to your 401(k) or paying off debts. That’s pretty much the core of it. Everything else is just details, like getting better at anticipating upcoming expenses.
It’s simple… but it’s not easy.
Many things in life are simple, but not easy.
A push-up is simple. Lay on the ground, stomach down, then push yourself up off the ground until your arms are fully extended, then lower yourself back to the ground. A push-up isn’t easy, depending on your fitness level and the exact technique you use.
A solution to a Rubik’s Cube is simple. When each side of the cube is solid in color, you’ve solved it. Actually solving the Rubik’s Cube, especially with speed, isn’t easy.
Shooting a basketball is simple. Position one hand on the side and one hand on the bottom of the ball. Push off with the bottom hand, using the side hand to guide the ball just as you release it. Of course, actually consistently making baskets isn’t easy.
Eating healthy is simple. Eat mostly plants and not too much. Almost all successful long-lasting diets in the world center around this. Of course, actually doing this with so many tasty and convenient options around us isn’t easy.
Being a good friend is simple. Listen. Laugh. Be there when they’re down. Actually being a good friend, especially during the tough times, isn’t easy.
Personal finance is no different. It’s simple… but it isn’t easy.
The problem is that people often mistake “simple” and “easy.” If something is simple to understand, they assume that it’s easy to achieve or master and thus drastically underestimate what it takes to succeed at it. Then, they wander through life for a while and eventually begin to wonder why they’re not succeeding at this “simple” thing.
That kind of feeling often leads straight to frustration and anger and self-doubt. “Why can I not succeed at this simple thing?” sings the refrain in their head.
They’ve accepted that something simple must be easy, and thus failure at this simple thing must mean a deep personal flaw within themselves. That is not true, not in the least.
One can fully understand a simple thing and what needs to be done to achieve it or succeed at it, but then utterly fail to achieve it because that thing turns out to not be easy.
So, then, how does one succeed at things that are simple but not easy? How does one succeed at personal finance? How does one succeed at losing weight and keeping it off? How does one succeed at getting in good physical shape?
The things you need to do to succeed on your financial journey are really simple, but they don’t actually work if you don’t follow them. You have to make yourself follow them.
There is no magic trick. There is no easy way out. It comes down to this: can you, week in and week out, month in and month out, year in and year out, decade in and decade out, spend less than you earn?
Doing that is hard. Doing that means resisting a lot of temptations. Doing that means making tougher choices than the people around you are making. Doing that means saying “no” sometimes when your heart and gut are screaming “yes!”
In fact, I would argue – and have argued in the past – that self-discipline is the single most important element when it comes to financial success.
Back then, I wrote some pretty solid tactics for practicing self-discipline, which I’ll share again now:
1. Start now, not later.
Spend less today. Not tomorrow. Today.
Make the things you need to do to make this your new life pattern your highest priority for the next few days.
Don’t shy away from giant steps, but remember that little steps are successes, too.
2. Remove temptations from your regular environment.
Delete your passwords and credit cards from websites.
Avoid places where you might be tempted to spend money.
Don’t carry cash or credit cards with you unless you intend to spend.
3. Establish fresher routines for your day-to-day life.
Purchase more energy-efficient devices when it’s time for replacement.
Find the most efficient commute.
Renegotiate your bills.
4. Don’t get hung up on individual mistakes; instead, focus on a new day.
Recognize always that one misstep does not mean the end of your progress.
Spend time figuring out why you made that misstep and don’t just merely excuse it.
Focus on today and tomorrow – only use the past and far future as inspiration until you’ve mastered your new habits.
5. Schedule treats.
Give yourself a certain amount of room and freedom for spontaneity.
Choose “time” splurges rather than “money” splurges.
Enjoy the anticipation and the afterglow.
Discipline means that you’re always doing something to improve your financial state, each and every day, while avoiding things that undo your progress, each and every day. You’re not going to be perfect at this, but you must not excuse failure, you must pick yourself up when you do stumble, and you must press onward with the intent of not repeating those stumbles.
Sometimes it’ll come really easy. Sometimes it’s going to be really hard. That’s where the next element becomes important.
Grit is the art of persevering when things get hard. There are going to be moments when you want to be irresponsible with your money. There are going to be times when this all seems impossible and overwhelming. There are times when you don’t want to be disciplined.
That’s when grit makes the difference.
Again, I’ve written about grit in the past, though I mostly applied it to careers. The advice as it relates to personal finance boils down to this in a nutshell:
Dream up a big goal. Break it down. Automate your steps toward that goal. Motivate yourself at work, internally and externally. Push through when it’s tough and rely on that automation.
When it’s tough, what do you do? You focus on today. You take care of what needs to be taken care of today. Yeah, it might feel like you’re going through the motions. Go through the motions. Yeah, you might be tired of this. Do it anyway. Focus on the absolute very next step and push yourself through that. Nothing else matters.
What if focusing on today feels like an intense struggle? Focus on the very next action – nothing else. What do I need to do next? What is the very next thing I need to do to keep all of this moving forward. Execute that, then see how you feel once you’ve moved forward a bit.
Grit works well for getting you through the tough moment. More is needed to continually move forward.
One of the most powerful ways to maintain discipline in your life is to make a day-in-day-out routine of it, so that the ordinary routine of your day moves you step by step toward your goal. You need to create a situation so that your default ordinary day moves you a step or two closer to where you want to be.
It’s simple to see how this works when it comes to things like exercise. You simply have a block of time where you get some exercise in. Maybe you work to establish a routine where you get up half an hour earlier than you used to so you can spend half an hour each day doing some kind of vigorous bodyweight exercises, focusing on specific muscle groups every other day and doing it with an intensity so that you’re out of breath. You do this day in and day out until a day doesn’t feel normal if you don’t start off with this routine. It’s your normal.
It’s simple to see how this works with food intake. Just come up with a few simple dietary rules and follow them constantly. For example, you might aim to keep yourself at 1600 calories a day, with at least 800 of them coming directly from plants. Do this day in and day out and it will eventually start to feel normal.
How does this work for money, though? Perhaps you establish a routine of eating every single meal at home. You establish a routine of thirty minutes of meal prep a day, which should be more than enough to have simple tasty meals at home. Step by step, this routine improves both your finances (by reducing the average cost of all of your meals) and your cooking skills (making home food preparation even tastier and more efficient).
Maybe you establish a grocery shopping routine that starts with the grocery store flyer and an examination of your pantry, continues with creating a meal plan and then a grocery list from that meal plan, and then heading to the store with that list. Grocery lists cut down drastically on unplanned (and often wasted) purchases at the store.
Perhaps you establish a routine of simply buying everything in store brand form that you possibly can, and stocking up when you spot a sale.
The goal of such a routine is to emphasize one end or the other of the “spend less than you earn” equation, and often it’s on the “spend less” side of the balance. However, it really only works if it’s a routine. From now on, it’s how you do these things. You don’t toss out meal planning and grocery list preparation because it seems like too much work. That’s what grit is for – you buckle down and stick to your routine. Eventually, and this takes several months, it starts to seem normal.
What if you want to take routine to the next level?
Automation is a great tool for establishing and maintaining a routine oriented around saving money or moving money from one account to another. It just removes the need to do it manually; instead, it happens automatically.
Automation can save for retirement automatically. Automation can build up an emergency fund automatically. Automation can make extra debt payments automatically. It’s just a simple matter of contacting your workplace’s HR or your bank and setting up the right regular transfer.
This might seem simple, but it takes commitment as well. Almost every automation you do drains money from your paycheck or from your bank account for some higher purpose, but with that comes an inherent pledge to cover the rest of your expenses with what’s left in your paycheck and in your account. Automation is powerful, and it’s a great way to ensure that you stick to a routine, but it still requires you to be able to deal with the rest of your life without the money you’re automating away.
Again, it’s simple, but it isn’t easy. Here’s another piece that’s simple but not easy.
Good Social Support
Social support is vital for making changes to your life, but not in the way you might initially think. It doesn’t come from announcing your big upcoming goals to your friends, as that won’t actually help very much and is likely to actually backfire on you.
Rather, good social support comes from surrounding yourself with people who have very similar goals and routines as you and are even willing to work together to help each other achieve those goals and maintain those routines.
Much like it’s easier to keep going to a fitness class if you have a bunch of friends in the class or how it’s easier to go for a jog in the morning if you’re meeting a friend, it’s easier to stick with good spending routines if you surround yourself with people who have good spending routines.
If you have friends who share the same priorities, you don’t have to shout your goals at them or even tell them at all. Just simply emulate what they’re doing and talk about those efforts. If you have friends that are all into running, you can talk about running and find people to go running with and feel supported as a runner. If you have friends that are all into vegetarianism, you can talk about vegetarianism and easily find people to eat vegetarian meals with and feel supported as a vegetarian. If you have friends who are frugal and interested in retiring early, you can talk about frugality and retiring early and easily find people to help you with frugal projects and who will be great pals when you’re both fifty and out of the rat race.
Find people who share your goals and ambitions and are disciplined about it. Establish friendships with them. Again, it’s a step that sounds simple, but is it easy? How do you find these people? Look for free community events where you actually interact with people before, during, or after the event. Look for people in your workplace who use lunchtime as a social opportunity but do so by bringing their own meals or leftovers. Check out Meetup or your library for social groups that seem to overlap with keeping spending low and get involved.
There’s one final tool you can apply to help you succeed at something that seems simple but actually isn’t very easy.
Elimination of Temptation
What are the things in your life that tempt you away from making the best choices for you and your future? Get them out of your life or minimize them wherever you can.
Do you see things you want on the television programs you watch? Cut out the television, or at least those programs. Life will go on. Do you see things you want or are envious of on social media? Cut out the social media. Life will go on. Do you find yourself wanting all kinds of stuff after reading websites or magazines? Stop visiting those websites and reading those magazines. Life will go on.
Life is full of abundant entertainment that doesn’t try to sell you on things. Go read a book or take a walk or learn how to play a musical instrument or learn how to solve a Rubik’s Cube in under 20 seconds or take up a martial art or watch a ton of classic films or… well, anything else.
Again, this circles back to routine. If part of your routine involves absorbing media that causes you to want to buy things, you need to change that routine. Delete that app. Cancel that cable service. Delete that website bookmark.
Minimize the things that tempt you in your life and you’ll find that temptation bubbles its way into your life much less often.
Simple, Not Easy
All of these steps are conceptually simple, but if there’s anything to be learned on the road to financial success, it’s that simple does not mean easy. There are many things in life that are incredibly simple to understand but incredibly difficult to actually execute in our lives.
There’s a reason why 60% of Americans essentially never exercise, why 78% of Americans live paycheck to paycheck, why most people have huge regrets at the end of their life for simple things left undone. Quite often, the simple things are the hardest to do.
Don’t sit back and just read about financial change. Do it. Make financial change happen in your life. Do it with the tools you have at your disposal. Discipline. Grit. Routine. Automation. Good social support. Elimination of temptation. Focusing on one day at a time, one action at a time if you have to.
You can do this, but you have to do it.
Go get ’em.