I blew my budget last month. I had a plan going into Black Friday and Cyber Monday – stay away from the internet. If I couldn’t see the deals, I wouldn’t be lured by them. Then it snowed. I got so excited to see that snow sports season had arrived, I went online and bought a full set of backcountry skiing gear.
I had been planning to buy this gear, I just hadn’t saved as much as I wanted to yet. It’s not a small purchase. All in I spent $1,000 when I was only ready to spend $500. So now I’m stuck with what I hate most – putting extra money towards my credit card instead of savings.
The problem with my plan is that it wasn’t realistic. I know myself and I’m a sucker for a deal. I try not to be. I understand the psychology behind those red slash marks over the original price. It’s bullshit meant to make us feel like we “saved” when really we spent.
Shit happens. Now it’s time for a new month and new goals.
Planning is everything, plans are nothing
Eisenhower was made this idea famous back in 1957. While it sounds contradictory on the surface, the crux of it is that regardless of your plan, you’ll come across unexpected occurrences that mean you need to deviate.
Thus the core of a good plan is one that is flexible, realistic, and has space for plans b,c, and d.
The issue with my plan is that it didn’t leave room for a pivot. I was going to save until I could get the gear and 100% avoid deals that I know I have a weak spot for.
The bigger issue is that I’ve been pushing myself too hard on my savings goals. I save 20% of my monthly take-home. However, I also invest 5% after-tax dollars automatically into my employee stock program. 25% of my total after-tax dollars is clearly too lofty of a goal.
This is my own example, but if you’re reading this it’s likely you might not have been hitting your goals. It’s common for us to beat ourselves up about these things, but more often than not the problem is with the goal, not our own willpower.
The myth of willpower
The idea that goals are met through imposed restraint runs everywhere in our culture – food, fitness, money, success. Any of these can be yours through the sheer power of the will. The shame that comes with allowing temptation to get the best of us runs deep (Eve and that apple ruined everything!).
The thing is though, that it’s false. Science tells us that reaching goals isn’t about willpower. Consistently needing to exert willpower only causes us to feel depleted. The more tired we are, the more likely we are to default to our own habits.
Cultivating systems and habits
The best way to hit goals is to build systems and turn those systems into habits.
“First forget inspiration. Habit is more dependable. Habit will sustain you whether you’re inspired or not. Habit will help you finish and polish your stories. Inspiration won’t. Habit is persistence in practice.” – Octavia Butler
Continuing to use myself as an example, when it comes to my goal of not spending anything on Black Friday, I was leaning on willpower, when I know my habits are to spend on deals.
A more realistic approach would be to build a system. The larger goal in this context is to spend less and save more. I know my weak points are impulse purchases and sales. So here are the systems I am implementing:
- Automating regular purchases such as razors, toilet paper, etc. This keeps me out of stores so I won’t find myself throwing extra in my basket
- Decreasing the amount that I’m putting into savings so that my total monthly savings is 20% of after-tax earnings rather than 25%.
- Setting aside 2% of my monthly after-tax earnings to help pick me up when I inevitably slip up.
By creating systems that work for me, the idea is that over and over I light up the reward system in my brain as I see my savings go up. In the end, the systems turn into habits.
This is in contrast to setting unrealistic goals where I rely on willpower and flagellate myself for the slip-ups.
A note on grit
Grit is my favorite concept. It helps me return to the mountains after a failed summit (ugggh Mt. Whitney!), stand back up after I eat it hard on the slopes, and it also helps me move on with my life when I have a bit of fuck up in my financial plan.
Grit is all about getting back up over and over again. It embraces “failures” because success is not the absence of failure it’s the continuation of progress after failure inevitably comes.
If you find yourself in a scenario where you are not meeting your goals, well huzzah, it’s a new month, time for new goals.
So take a moment and ask yourself if you’re being realistic about your goals. If the answer is yes, then ask yourself if you have the right systems in place. Once you have the right systems and have accepted that the path won’t be without speed bumps (hello Grit!) then everything else will fall into place.
My new goals for the coming month
My new goals for this month are to set up the right systems for myself. Unfortunately, I’ll need an extra month before I can get my savings back to where I want them to be.
But, I’ll get to spend that month touring around the backcountry. Some fuck ups are too damn good to feel bad about.