Money

How to Stay Disciplined and Do More with Your Money

Have you ever felt frustrated, overwhelmed, or confused about a big financial decision? Maybe you’ve wondered if you should empty a retirement account to pay off debt, buy a home, splurge on a vacation, or take a job in a new city.

Most of us waffle about whether we should or shouldn’t spend money or make key financial moves. In this post, I’ll give you a framework to make better money decisions in less time, with a lot more clarity and confidence.

Get Focused on Your Finances

You probably know that you should have financial goals to steer your decision-making, right? Sometimes we don’t set goals because it seems like creating a page full of targets is just too complicated.

Maybe you feel like it’s a waste of time because you created financial goals in the past, but they didn’t help because you completely forgot about them just a few weeks or days later. Or perhaps you’ve been putting off creating goals because you’re not sure what they should be in the first place.

As we approach a New Year, I want to give you a completely different way to think about success with your finances. I call it your One Money Objective, which is a single word or short phrase that gives direction to your entire financial life.

The idea for creating One Money Objective came to me after reading The One Thing, a bestseller by Gary Keller and Jay Papasan. The book’s premise is that you’re more likely to find success when you dismiss distractions and narrow your concentration to one thing.

The One Thing made me realize that trying to focus on too many financial goals can easily clutter your mind and put distance between the actions you take and what you want to achieve. Instead of thinking big, I want to invite you to think small, very small.

There are only so many hours in the day, so getting laser focused on One Money Objective can make you more effective when faced with a major money dilemma or when you just need a fresh perspective to get your finances back on track.

Choose one word or phrase that encapsulates what you absolutely desire for your financial life. Having to boil down your goals into one word forces you to get to the point and is so much easier to remember than an overblown, complicated financial plan.

Now, I’m not saying that your overall objective for your financial life shouldn’t be big. But what I am saying is that success comes as a series of small wins. You make one good decision and then another and another. Over time, the positive effects of each small decision build up for massive success.

Here’s a quote from The One Thing:

“When you see someone who has a lot of knowledge, they learned it over time. When you see someone who has a lot of skills, they developed them over time. When you see someone who has done a lot, they accomplished it over time. When you see someone who has a lot of money, they earned it over time.

The key is time. Success is built sequentially. It’s one thing at a time.”

Just like multitasking usually backfires and causes you to be less productive, trying to accomplish too much or to make too many changes to your financial habits at once is generally a recipe for disaster.

How to Prioritize Your Finances

You’re probably wondering how it’s possible to prioritize one single aspect of your finances when it all seems critical for success. With so many things that you should or could do to improve your personal finances, how do you decide what’s most important right now?

There are many different pieces of good money management. But here’s the secret: they don’t all matter equally.

The Pareto principle, also known as the 80/20 rule, is a great structure to apply to your finances. It says that there’s an unequal relationship between inputs and outputs. In many situations, roughly 80% of effects come from 20% of causes. In other words, a small amount of input is typically responsible for most results.

Pareto was an Italian economist who showed that approximately 80% of the land in Italy in the late 1800s was owned by 20% of the population. He also observed that 20% of the peapods in his garden contained 80% of the peas.

In business, companies may observe that 80% of profit comes from 20% of customers. It’s likely that 80% of complaints come from 20% of clients and 80% of sales are achieved by 20% of the sales force.

The 80/20 rule shows that dramatic improvements can be made when you understand what’s responsible for most of your results.

This can be challenging because sometimes what’s most important gets buried under an avalanche of what’s unimportant. High achievers have a talent for being able to separate the two, no matter if we’re talking about improving your health, relationships, career, or finances.

Successful people know what’s essential and act on what matters sooner rather than later. Less successful people typically also know what they should be doing, but don’t do it. They make excuses, procrastinate, or just hope that everything will turn out okay.

So what I’m recommending is that you identify One Money Objective that’s most important to you, so you can live it with gusto, passion, and clarity. Dig deep to uncover what financial activity or concept drives you and gets the results you want more than anything else.

Your One Money Objective may remain constant for your entire life, or it could be a “word of the year” that captures your aspiration and motivation right now and then is re-evaluated in 12 months.

How to Choose Your One Money Objective

My One Money Objective has always been “retirement,” and I’m thankful that my husband shares my resolve. I’m passionate about investing enough for retirement so I’ll always be able to maintain my lifestyle if I can’t work or want to work less.

Being clear about that objective helps us focus every financial decision. If making a change—like buying a bigger home or borrowing money to start a new business—would jeopardize our ability to fully invest for retirement, we don’t do it.

We fund our retirement accounts first and choose to live in a smaller place, drive less expensive cars, and spend less on vacations than we could afford. We just don’t even think about spending money that’s earmarked for retirement because it’s our number one financial objective.

Your One Money Objective might be family, charity, or self-employment. A good way to narrow it down is to consider what’s causing any financial stress that you may be feeling right now. If your finances aren’t supporting your core values, it can show up as anxiety, worry, and despair.

Another way to recognize your One Money Objective is to acknowledge what’s most important to you. What would make you happy to achieve even if money were no object? Maybe it’s putting your kids through college or starting a charitable foundation. There isn’t a right or wrong answer.

Once you choose One Money Objective you can use it as a guide when you’re not sure what to do. For instance, if you’re wondering if you should raid your 401k to pay off credit cards, ask yourself if doing that supports or defeats your objective. If you’re considering starting a side business or going back to school, consider if it moves you closer to or farther away from your key financial objective.

If you’re like me and value retirement above all goals, then you never, ever tap your retirement account for any reason. If you’ve accumulated high-interest debt that you need to pay down, get aggressive about tackling it by earning more and cutting expenses without sacrificing your retirement funds.

To increase your likelihood of success, pick One Money Objective that’s most important to you and pursue it with a vengeance. To stay motivated, I recommend creating visible triggers that remind you what you want to accomplish every day. Place strategic cues in your home, car, and workplace that spark your attention and foster good habits.

For instance, you could write your One Money Objective on an index card that stays in your wallet. Jot it down on a sticky note that stays on your credit cards, bathroom mirror, car dashboard, and computer monitor at work.

Another strategy is to start each morning with a journal entry about why your objective is so important, what you’ll do today to accomplish it, and what it ultimately means for you and your family’s future. The Five-Minute Journal book or app to is a great tool to shift your focus to what’s most important and fool proof your commitment so you eliminate what stands between you and your money goals.

About the author

David

Add Comment

Click here to post a comment

Subscribe to our newsletters

Join our mailing list to be among those lucky ones that receive our latest stories first.