“I’ve got a theory that if you give 100 percent all of the time, somehow things will work out in the end.” Larry Bird
I’ve actually got a theory of my own – if you nail a goal 80-90% of the time life is going to be smooth sailing to that goal.
Cleanses are pretty popular right now and that makes sense. You see, I pretty much live on junk food – even if it doesn’t totally look like health food, it’s still probably a microwave meal full of preservatives or it may literally be a sugar filled cappuccino and two donuts.
With my finances, my day to day purchases could involve regular trips to Target because their candles all seem to smell amazing and their clothes are adorable and there’s that interesting isle of weird crap by the stationary and you never know what you might find there. I probably bought a sugar filled cappuccino most days on my way home from work and I just spent a ton of money that I don’t have in my bank account yet for a vacation with my best friends because YOLO and I’ve sort of got a plan to pay it off over the next few months on my credit card.
When you need to cleanse, you do need to go 100%.
You Whole 30 those donuts right out of your system for 30 miserable but mind and body resetting days.
You No Spend month it up and wonder how you amassed so many cans of soup and tuna. You actually read all the books you haven’t read yet on your bookshelf and you invite friends over to board games and tuna sandwiches.
You learn a board game and tuna sandwich night can totally be YOLO because it turned out weird and memorable as all get out and 3 of your friends think you’re totally insane (not like they didn’t know that already), but a month later you attended a board games and Ramen noodle night your 4th friend’s house because she thinks you might be a financial guru now.
You start reading all the articles on how sugar (and, really, everything) can give you cancer and feel pretty superior about your new Paleo diet that cuts out everything that you used to love and gives you endless piles of energy.
You start to research ravenously and build a budget, figure out your net worth, make a debt payoff plan, start churning travel rewards, side hustling and obsessively reading Budgets Are Sexy right back to J. Money’s first ever blog post.
You sign up to run a 5K and decide you’re totally going to be a runner, you vow to get up right and early so you can cook breakfast from scratch before leaving the house and you ban preservatives from your home.
Then those 4 friends from board game and tuna night decide they want to hit up a Caribbean resort this fall and you don’t have enough saved yet to make it there.
You have to work late and then get up really early too many days in a row and the siren song of Chick-Fil-A calls to you.
So the trip goes on your credit card and you hit the drive in on your way home.
Next thing you know, you’re back at Target picking up tchotchkes you don’t really care about and the backseat of your car is littered with waffle fries containers and chicken sandwich wrappers.
But the worst is that there’s a crazy balance on your credit card again and you generally feel like crap from all the poor food choices.
So many of us (me included!!) have this all or nothing mentality.
I can rock a cleanse. I can also rock a No Spend week or month. For a long time, it was a quick spiral back into bad habits as soon as those cleanses would end.
But I’ve been working on this personal finance thing for a few years now and I’ve realized the 80-90% rule in full effect is what’s slowly and surely turning me into a personal finance bad ass.
In solid numbers:
- Contribute $1,000 to my Emergency Savings Account.
- Max out my Roth IRA.
- Contribute $3,000 to my Down Payment Fund.
- Contribute $2,000 to my New Car Fund.
- Have a $1,000 Best Friend’s Wedding Fund.
- Buy $1,000 of stock.
Each year in January, I try to set 10 or so goals for the year and about half of them are financial.
If I achieve 80-90% of those goals, I’ll still come out $10,800-12,150 ahead for the year.
But that’s not even really the point of the rule, that’s just some hard numbers to check out. It’s just one way to look at the rule.
The point of the rule is the mentality behind it.
If I budget every month, fund a good emergency savings account, put away for retirement, build up a fun money fund and start building a side hustle – that’s a lot of stuff to get done.
Some months I might be a rock star and do it all, but most months, if I hit 80-90% of those goals, I’m probably still doing fine.
If I rock my budget every month and then suddenly decide to YOLO it up in the Caribbean and put that vacation on my credit cards – it won’t be the end of the world. I will actually follow the plan, pay off the cards and be fine, because my life is not a total disarray of financial madness.
If I build up a 6 months-1 year emergency fund, set solid savings goals I hit every month and always get my bills paid on time, if I don’t double check my budget every month (or, gasp, even stop budgeting altogether), I’m probably going to be fine.
It’s terrific to dive 100% into a new project – especially because your passion for it will probably be at it’s highest then. Learn everything you can! Cultivate every skill you can stand to!
But when it comes time to reach for a donut, don’t let all your work spiral out of control. Get the donut. Heck, if you really want it, get 2. Then go back to the original plan. 2 donuts in an otherwise healthy diet aren’t going to derail your progress (they might make you violently ill to your stomach – not that I’m speaking from experience or anything – thus making you less likely to want to grab a donut again soon – or making you really sure you need that donut if you’re doing to eat it and get sick anyway).
A single trip, even if it’s a big one, in an otherwise healthy financial diet isn’t going to tank your finances. Running into Target to buy a birthday gift and coming out with a new sweater and a lavender candle three times a year won’t tank your finances either – 3 times a month is a different story.
At the end of the day, though, all I can really vouch for is my own experience and while all the health analogies are still 100% struggle for me, after three years of effort on the personal finance front, including a solid amount of time at the beginning giving it 100% – I’ve happily settled into the 80-90% place and my life is full of fun and fulfilling experiences and my finances are in a safe and happy place.