Don’t Neglect the Little Wins in Life

There are two parts that make up personal finance.  One part is the action; this is what most personal finance websites focus on, the how-to-save-more-money bit.  But the other side of the coin is the psychology behind the action; many people ignore this aspect.  When you are looking for ways to improve your financial health, you will see a whole array of ways to do so.  Some of the ways are easy, and others will require a whole lot of work.  How do you choose which to tackle?

Some people would say that the most well respected financial guru of our time is Warren Buffet.  This man has been at it for years, and he knows what he is doing.  His insights can provide a wealth of information.  He once said, “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”  When we look at that quote, we can learn a lot about how to structure our financial lives.

Everyone knows that most people cannot jump over seven foot bars; even 5 foot bars are tough to get over.  But the reward for getting over them is great, the higher the bar the greater the reward.  The bars are difficult, but you shouldn’t avoid the high bars all together, in fact, you should structure your life so that there are some higher bars that you are constantly working toward.  That way you will experience the great reward that comes with great sacrifice.

In the meantime, provide yourself with plenty of one foot bars to help keep your psychological battle going strong.  The rewards are small because just about anyone can conquer them.  But they are rewards none-the-less, and without them we would start to get depressed.

The human brain works in strange ways.  We would think that a bigger win would provide more of an uplifting feeling (bigger win should mean better feeling).  But the reality is that we need those little encouragements along the way in order to keep the drive, otherwise we will fizzle out and quit all together.  Just think about whenever you travel.  You have miniature victories every mile marker that you pass (or those times when you zone out and next thing you know you have gone 15 miles).  Or perhaps when you read a book and every chapter finished makes you feel more accomplished.  Or consider when building a project, cleaning the house, or any other activity you partake in.  The fact is that constant little wins help a whole lot more than the occasional big win.

It doesn’t take an investing genius to realize that we are not talking about actual bars here.  We are talking about dream jobs, seeing your retirement account hit $100,000 (or $500,000), writing that novel, or finally having enough money to build your own house.  Those are great goals, but they are so big that you can get discouraged when they constantly seem so far away.  Instead, celebrate the small wins.  Negotiate your car insurance, pay off a credit card, skip eating out and put another $20 into your IRA, or even pass on watching TV this evening and read a book instead.  All by themselves, they are not much, but they help to boost your morale, and let you live a richer life working toward the big wins.  Look around you and see what one foot bars you can step over today.  Some of them may be monetary (sell something you don’t need on Ebay), and some of them may not (finally clean out the fridge).  The point is, celebrate a little win to keep you moving toward your big wins.