Consistency, not fantasy

Every year, people knowingly make resolutions and few if any of those resolutions stick. Rather than chasing the impossible, we all would be better off in establishing simple habits so that we work gradually toward a final goal.

One of my many goals for last year was to develop a budget and stick to it. I have used Quicken on and off since 2001 and I have never been able to keep track of all my expenses. The first habit I establish was to learn to record all my expenditures. This habit took me nearly 1 year to develop and I have been able to do that consistently by setting aside a specific time in my schedule every week to get caught up on all my receipts.

Once I have established the habit of recording my all my incomes and expenditures, then I was able to see a pattern in where my money was going by grouping items in my record into categories: e.g., rent/mortgage, insurance premiums, utilities, and groceries into essential expenses, and then non-essential expenses such as shopping, movies, dining out, trips, etc. Along the way, one motivation that drove me to keep recording and working on my budget sheet wasn't the reward in how much money I saved but rather learning how to use Excel.

Part of my new job at that time was to process large-scale datasets within Excel and do further analyses inside databases. By combining work with what I do for fun at home, I was able to learn some new skills while saving money at the same time. People in business would call that synergy, I was just being lazy by combining two projects into one.

That's the trick with establishing habits, there must be incremental and immediate reward for habits to stick. Take losing weight for example, this isn't something that can be done overnight and for many people, this is a lifetime of struggles and most fail. The reason they fail is that most of them don't see the immediate and incremental reward. I started my workout regimen with a few buddies, many drop off because they couldn't stick to it, but those remain, we became very good friends in the process. Part of that workout regimen was the social aspect of hanging out with friends so the workout process wasn't tedious.

Back to the budget, after I have tracked my incomes and expenditures for nearly 1 year, it took me another 6 additional months to gradually taper down my non-essential spending to within my budget. Finally, the reward is to see how much I have increased in my savings and the interest I earn on a monthly basis. Another secret to having goals is to maintain a pattern of continuous improvement. Now that I have substantial savings, my next goal is to invest what I've earned into higher yield investment vehicles. That's another reason why people fail to loose weight, imagine that they have lost all that weight, what's next? For almost all of them, if they don't have any idea of what to do next, I'm sure they will revert back and regain all that weight.

As human beings, we improve by making incremental and continuous changes into habits. We establish habits by having consistency and self-discipline. There are tricks we can play with how we perceive ourselves. Instead of striving for lofty fantasies, we are better off taking small steps slowly.