At the end of the day, we all have goals. Financial goals, health goals, personal goals. The biggest challenge many of us face when trying to defeat these challenges is taking that first step and overcoming inertia. That feeling of everything being just fine and dandy the way it is. Sometimes inertia shows up in the form of other words like busyness, laziness, doubt, stubbornness, fear and maybe even ignorance. Who wants to be called out for those descriptions?!
So here are a few ways we can use Compounding Actions to tackle Financial Inertia:
Not shock therapy in the traditional sense or like Dr. Peter Venkman used in the movie Ghostbusters. About 50 years ago, Kurt Lewin introduced his three-step model for change. We can use this same model to get us moving forward, financially or otherwise. Basically, we have to shock ourselves into action. Financially, we could ask ourselves some questions like:
- “How much money am I losing by not getting started on this?”
- “How much could my money be growing if I were investing all the money that I’m currently losing/spending?”
- “What would that money mean for my [insert financial goal here]?”
And of course, if we can’t shock ourselves into action then it makes sense to find someone else to do it for us. Remember our doctor analogy above?
By setting short term goals that can be easily obtainable, we create momentum. And momentum is what we need to overcome financial inertia. Remember, an item in motion tends to stay in motion! So earn yourself some wins and keep on keepin’ on. Maybe that’s increasing your rate of savings by 1% (hint: open enrollment season is upon us!), or saving an extra $xxx per month. Cancel a service or subscription you aren’t using (enough). Make it something small and easily obtainable. Small, incremental steps can lead to huge long term gains!
I’m not saying go all Stuart Smalley here and build yourself up. Let’s not confuse visualization with the “think it and be it” advice our friend Stuart and other self-help gurus bombard us with on Facebook. But visualization works! From sports to business, science tells us our mental thoughts can be just as powerful as action.
According to this article, “When we visualize an act, the brain generates an impulse that tells our neurons to “perform” the movement. This creates a new neural pathway — clusters of cells in our brain that work together to create memories or learned behaviors — that primes our body to act in a way consistent to what we imagined. All of this occurs without actually performing the physical activity, yet it achieves a similar result.”
This is powerful stuff, friends! When it comes to your financial life, visualize what you need to do to get where you want to be. Maybe that’s creating more sales at work to earn more money to save for a down payment on a house. Or it’s visualizing your lifestyle to create the life you want and be able to spend time on the things you value.