Improving your finances: Direction not perfection
I enjoy listening to podcasts and audio books while commuting to and from work, exercising, mowing the yard, and frankly anytime I can. I feel doing so is an effective use of my time. This past week I listened to an audio CD that I checked out from our corporate library called Crucial Conversations. Crucial Conversations and another related book Difficult Conversations are what I would consider required reading for everyone. They will change your ability to have positive and productive conversations under any circumstance. Anyway, towards the end of Crucial Conversations, the authors make a very profound but simple statement, “The path to self improvement is about direction, not perfection.”
Application to our financial lives
This concept of direction, not perfection clearly applies to our journey towards getting control of our finances. Too often we are caught up in trying to do everything correctly: not always staying within budget, being as frugal as we can, not making the right investment choices, etc. I know when my wife and I started the journey to getting our financial life back on track I wanted to be perfect. Each time we would make a mistake, I would kick myself and get discouraged. I was missing out on what was really important: that we were trying and that we were heading in the right direction.
We aren’t perfect, we make mistakes. What is important is that we head in the right direction. Depending on where you are in your financial journey will drive which direction you are headed. The important concept is to not look at just one day or at any one event but look back over the past week, month, or even year. Are you trending in the right direction?
Look at the big picture
My wife and I have been working hard to get control of our finances and get out of debt. We’ve established an emergency fund, and we’ve paid off 4 credit cards in the past 12 months. We are far better off than we were 1 year ago. But, if I were to look at various points in time during the past year, I might not come to this same conclusion. For example, we paid minimums in December, so no progress on our debt then. We’ve overspent our budget a few times and weren’t able to pay on our debt as planned. A few months back, we had unexpected expenses that also bit into our debt snowball. To be honest, we’ve also slipped back into our old habits a few times buying some things we didn’t need and eating out a little too much. Fortunately we are now living on far less than we earn so we were able to absorb the extra money spent, but it slowed down our debt payoff progress.
In these kinds of situations, when you focus on the particular events, it’s easy to criticize yourself and think you aren’t making progress. But returning to our theme, the path is about direction not perfection. Looking at it from that perspective, we’ve come a long way and have had a significant positive impact on our financial situation, increasing our networth by more than 170%.
Gather little by little
The name of this site isn’t just something I casually picked out. The name is a concept I firmly believe in, and comes from perhaps the wisest man in history, King Solomon who wrote about it in Proverbs 13:11. If you save one additional dollar a month, that is one dollar more than you were saving before. If you pay an extra $10 dollars on your debt, that could mean you get out of debt 1 or more months earlier than you planned. Little things can make a big difference when compound interest is involved. When you do these little things, you are heading in the right direction.
Now, let me clarify, I am certainly a huge advocate of doing the very best you can (1 Corinthians 10:31) and aggressively paying off your debt and saving. I don’t want this concept of direction not perfection to become an excuse for not working diligently to get control of your finances or as an excuse to intentionally overspend. I am just trying to remind you that we aren’t perfect, and that we do make mistakes. Don’t let them be a stumbling block for you. When you make them, get back up, brush off you hands and pants, and keep going. Life is going to throw curve balls at you, expect them, deal with them, and continue the journey.
Are you trying to be perfect or are you focusing on heading in the right direction? Share your thoughts and perspective. Add a comment!