What do we want? Gratification!
When do we want it? Instantly!
We live in a world saturated in instant gratification. We can contact our friends through multiple channels at any time of day, from anywhere in the world. We can have the city’s best sushi or a even just single lime delivered to our front door. The amount of entertainment we have access to at our fingertips is a number that my brain cannot actually comprehend. And we can generate a rush of dopamine in the time it takes to write a caption for a photo.
It’s no wonder why we give up on the things that require more than a few minutes of focus. We have so many other ways to feel instantly good and to distract us from the real work we could be doing. But real work takes, well - real work.
You’re probably here because you’re interested in “getting your financial shit together.” This idea is both loaded and nebulous. Ultimately, you’re trying to learn skills to change something or create something in your life. What you’re trying to change and create can be both tangible and intangible. Perhaps you want to feel confident in your financial decisions, a sense of security or feeling like you have freedom and options.
Managing your money and getting your finances in order is just like learning a new skill. There are “rules”, concepts, strategies, man-made nonsense that you have to be aware of, like laws and the theories behind all the bullshit. You have to learn information to increase your skills and abilities. It can take time, effort and energy on your part, but it can also feel really rewarding to what your own progress.
Get acclimated with the universe you’re venturing into
Like any new skill, it’s important to understand all the elements, rules and assumptions that make up the new universe you’re entering. For example, when you’re trying to get good at playing Backgammon, you first need to learn about the universe of Backgammon - the board, the players, pieces, the dice, the object of the game, then the rules governing it and then the strategies.
Breaking a skill down to manageable nuggets, makes it easier to avoid getting overwhelmed and intimidated.
Here’s what I call the Pyramid of Financial Awesomeness. It’s my take on what the finance industry has deemed the “right way” to get your financial life together. It’s the financial planning universe, broken down into manageable nuggets.
In a perfect world, you start by getting good at the skills at the very bottom and you work your way up the pyramid, brick by brick, layer by layer. But you can also use it as a map of all the things that you’ll need to tackle. In that case, you might actually find yourself jumping around and tackling different bricks from layers.
The pyramid isn’t meant to bind and restrict you, it’s meant to illustrate all the things that encompass the loaded term “managing your finances.” It’s to help you get acclimated with the universe of getting your finances in order. It’s meant to show you a path that is common for most people.
Now that you know the lay of the land, it’s time to be strategic about getting started.
Focus on one thing at a time
Contrary to the myth of multitasking, you can’t focus on lots of things at once. If you try to, you’ll never get the critical mass required to notice that you’ve actually built a skill. You’ll just be slightly not-crappy at a lot of things.
Haven’t you ever sat down at your computer to get things done only to feel overwhelmed? With 52 tabs open, researching multiple things, booking travel, answering email, and crying on the inside? You realize, you have to stop and do one thing at a time. Samesies with finances.
First, make a list of the skills you want to focus on; that’s the easy part. The hard part is prioritizing what you’ll tackle first. I would keep a running list so you can go back to it when you’re ready to learn something new. Or just print out the Pyramid of Financial Awesomeness and use it as your guide. Try not to get overwhelmed with the possibilities and prioritize your top three.
Here’s an example of the first few skills to focus on:
Setting up weekly finance time and showing up for it every week
Finding a budgeting method that I can stick to
Saving and extra $5,000 in my emergency fund this year
Once you’re clear on what skill you’ll tackle first, you can understand what you need to do to reach your target.
What can you realistically accomplish?
Here’s the rub. It’s not enough to do the hard work of defining what you want; like getting better at living within your means, saving for your kids college, and accelerating your get-out-of-student-loan-debt plan. The hardest parts are understanding what you can realistically accomplish and figuring out how you’ll compromise on the ones you can’t.
Motion vs. Action (Learning vs. Doing)
I want to be the type of person that bakes bread. When you come over to my house, I want it to smell like fresh bread and I want to casually say, “Oh, yeah, I’m baking some bread for dinner because I’m incredible, thoughtful, I have so much free time and I care deeply about my sweet wife,” like it’s not a big deal. So I’ve watched some overwhelming instructional videos, casually flipped through cookbooks and have thought about how cool it will be to be the type of person who bakes bread. I’ve made all this motion about baking bread, but have I actually taken action and tried? As of me typing this, nope. I’m all hat and no cattle. So much motion and never any action.
I first read about this concept of motion vs. action in Atomic Habits by James Clear. Motion is all the things you can do without really taking action on something. It’s research, it’s reading, it’s learning, it’s thinking about it, it’s talking about it, it’s preparing. And action, well, it’s doing the damn thing. With learning new skills, you have to strike the balance. You have to learn theories and concepts and history, but you also have to be about it. You have to move. You have to do.
Try tackling a little a bit of theory and little bit of practice. Learn as you go and do as you learn.
Get good at the things that will have the biggest impact
The Pareto Principle states that 80% of results comes from 20% of your efforts. 20% of your clients make up 80% of your revenue. 20% of the population owns and controls 80% of the world’s resources.
It makes sense to focus your efforts of the 20% that gives you the 80% of results.
For example, when you learn how to play an instrument, you learn chords or arrangements and phrases that are common. With guitar, you can play hundreds of songs with three common chords, so it makes sense to learn those before learning esoteric ones that aren’t found in very many songs.
If you’re a total n00b at this stuff, I think the bottom layer of the Pyramid of Financial Awesomeness will help you have the biggest impact right away.
Let us help you
If you want me to teach you everything in the Pyramid of Financial Awesomeness, you’re in luck. Enrollment for How to Not Freak Out About Finance, an online, DIY personal finance course opens on May 31, 2019. I’ve spent years developing How to Not Freak Out About Finance by working with and teaching hundreds of people around the world. I’ll teach you about each brick in the Pyramid of Financial Awesomeness through videos lessons workbooks and illustrations. You’ll practice your skills and take the actions that will actually have a lasting impact on your financial life and how you feel about your finances. And there is a community that you can lean on for support. Enrollment opens for a limited time on Friday May 31, 2019.
To get on the wait list, sign up here: