Lauren Rilling Conventional wisdom tells us that in order to achieve big goals, we need to work hard, dream big, and execute a plan with extraordinary discipline and willpower. I’m here to say that’s a surefire path to failure.
Don’t get me wrong, I’m all about achieving audacious goals! But approaching them in a way that works against your natural style creates extra obstacles, causes burnout, and stalls your progress. Not to mention, it can create a stressful and joyless way of living.
The road to financial freedom isn’t always easy, but it is simple, and there are factors within our control that make managing money a lot easier. If you want to get in top financial shape, then avoid these three common mistakes.
1. You’re trying too hard.
Ever heard the phrase “work smarter not harder?” In high school math class, I would study so much and try so hard, but there were certain math equations that I could never seem to understand and my math teacher would always say “work smarter, not harder!” The problem was that I didn’t know HOW to work smarter, and he didn’t know how to help. It was supremely frustrating.
Right now you may feel like you’re trying so hard to be the steward that you want to be. Yes it will take effort, but endless striving is not the answer. Forcing yourself to adopt a bunch of new disciplines at once— using cash exclusively, sticking to a tight budget no matter what, tracking every purchase, saying “no” to things you’re used to buying, and committing to never set foot in a restaurant for the next decade… that is utterly exhausting.
Here is why: those action steps are all tactics to help you gain control of where your money is going. And they are not bad tactics, they’re very good. However, trying to implement everything at once and expecting things to go perfectly is not the way you create lasting success.
There was a study in which researchers took a group of people who wanted to improve their cardiovascular health and split them in two groups. The control group was instructed to run three miles, three times a week.
The experimental group was asked to stand while watching TV. Seriously.
A few weeks later, the experimental group was asked to do a few jumping jacks during commercial breaks.
You can probably guess where this is going: in six months, every single one of the control group participants had given up and reverted to their couch potato ways. The experimental group, however, was running three miles three times a week with a 70% success rate.
The key is to know when and how big to make that next step toward building your ideal habits that create the results you want. You might be doing all the right things, but you need to learn how to work smarter instead of harder to reach true financial freedom.
2. You have too many goals.
Not exactly something you’d expect to hear from a coach, right? It’s true, though. Stop trying to do so much with your money. We are slaves to the word “balance.” It’s code for “do all the things all at once.” The intentions are right: you want to make sure you have enough money saved, enough to maintain your lifestyle and have some fun, all while paying off debt, investing for retirement, and intentionally giving. Life balance is generally good, but numerical balance is a mistake because all you’re doing is spreading the money too thin to make a difference.
My point is you can accomplish all your goals, but you can’t do them all at once. Strategy matters.
Case in point: I met with a new client who had been paying $1000 a month toward her student loan for eight years. In this time she had actually paid more in interest than the total remaining balance.
She had just enough in savings for a starter emergency fund and was trying to save money and keep a moderate lifestyle at the same time. In trying to maintain balance between her goals, she was actually keeping herself in perpetual debt and the accompanying state of stress.
So we had to identify the singular point of focus to reach debt freedom. Once we mapped out a strategy for her to achieve it in two to three years (down from the ten year plan she was on), the lifestyle sacrifice paled in comparison to what she had to gain.
The best part is she’ll be able to start investing much sooner, pay tens of thousands of dollars less in interest, and give in the capacity that she desires instead of staying on the debt hamster wheel for another decade.
3. You’re trying to follow a budget.
We’ve all heard it or maybe you’ve said it yourself with a downcast sigh “I can’t buy that, I’m on a budget.” The truth is that a budget, done properly, serves you and not the other way around. Now sometimes love is tough, and the numbers don’t lie. A budget gives us a much needed reality check when we ask “where did my money go?” (By the way, the answer to that question is Amazon.)
One purpose of the budget is to give you freedom to spend — within boundaries. You get to set the boundaries and you get to decide what your budget says. A budget is not imposing someone else’s values or ideas of what is financially acceptable; it is a tool that helps you categorize your money according to your priorities and goals. And when life happens you don’t throw out the budget, you edit it!
Amazingly, you’ll find that using a budget effectively rather than forcing yourself to follow a set of arbitrary numbers results in financial margin, the ability to adapt to life’s unforeseen circumstances, and gives you the freedom to spend less time thinking about money so you can focus on what matters most.
When done right, you will love your budget and the freedom it brings you.
So go ahead and toss that conventional right out the window! Stop trying so hard, focus your goals, and change the way you use a budget. Financial freedom is not an event, it’s a set of habits that you develop over time.
