One of the lessons we learn in our early childhood is to be perfect in whatever we do. We were told if you are not perfect, you will not be able to compete in the real world.
While it may be true for some disciplines like music, medicine and mathematics (the only subject in our times in which we could score a perfect 100/100), personal finance needs an opposite attribute.
There is nothing perfect about investments, budget and savings.
Things change rapidly like the stock markets fall when a leader in some nation sneezes, or unexpected events in life happen.
While the perfectionists among us keep waiting for the sun, moon and the earth to align to begin to invest or budget. Some of the common quotes which I am guilty of uttering at many times in my financial life.
“I will invest once I get the next raise” – when and who guarantees that today?
“I will save from next fiscal year” – hello, which fiscal year and which month does it start?
“I am too scared as the markets are going down” – which means I will invest when they are up, exactly at the wrong time.
The end result is that the perfectionist gets a perfect ZERO in his/her investment and savings goal.
You have to unlearn the perfections and not apply them at all in personal finance.
What is important is to get started and be consistent.
Anyone who has not yet started or planned own finances should do this in below 3 steps.
- Budget – Keep it simple by following the methods described in : Budget – Grow the tree upside-down
- Invest – Slowly build the 5 account portfolio. Start today with at least one of the accounts : Investing in the High Five portfolio
- Save – Save for your important goals even if you allocate just $50 to one goal today : One essential comfort zone
Perfect plan? Now execute it imperfectly by just getting started.
Write one goal each of budgeting, saving and investing for this week.