Do you know how to get out of financial trouble? For example, if you want to learn how to get out of credit card debt fast, do you think you have to deny yourself? Nothing could be further from the truth.
In fact, the opposite more closely describes how to be successfully frugal.
You’ll save more (and make more) money if you become a master at instant gratification.
This may seem counterintuitive (if not crazy), but I think that you’ll end up agreeing with me if you give me a chance to explain. First, a little background on how I came up with this wacky idea.
I spent a few days traveling with a rock band in San Francisco a few weeks back. (Granted, I look more like the accountant for a rock band than a musician, but they needed a fill-in drummer and I wanted to play.) During that time, I had the opportunity to explain the upcoming Jewish holiday Yom Kippur to the band members.
These fine fellows weren’t all that familiar with the holiday. They wanted to understand what Yom Kippur was and why I observed it. When I told them that most Jews abstain from both food and water for 24 hours in order to observe the holiday, they looked at me like I was completely “mishiginah” (Yiddish word for “crazy”). As respectfully as they could, they asked me why Jews do that.
I’m not a particularly religious man, so I couldn’t tell them why other people observe the holiday. But I did tell them why I do it and what I get out of it. To be honest, the first reason I fast is because that’s how I was raised. It’s tradition…just like Tevya said in Fiddler on the Roof. But it’s much more than that.
By fasting, I see how fragile life is.
As a result, I think about how to make each moment meaningful. I think about how to stop wasting time. I realize how fortunate I am and I am even more grateful for the gifts I’ve been given. Not a bad lesson. If you can’t imagine how to stop spending money, think about giving up food and water for a day.
And after a few hours without food and water, the idea of how weak we are really hits home. The concept of humility really becomes clear. This reminds me how important it is to be helpful to others. To be honest. To only spend my time with people I really respect. And by simply completing a difficult and uncomfortable task because I said I would, I get to be a self-esteeming human being.
These lessons are terribly important.
Did I know these things before the holiday? Sure I did. But do I live them? Not all the time. Observing the holiday is a reminder and an important one. Fasting is the price I pay for being reminded of these pillar principles.
And this is the key. If I didn’t observe the holiday, I would deprive myself of the gifts of these lessons. Did I practice self-denial by fasting? Not at all. I simply paid the price to gain some insights.
After thinking about it for a while, it occurred to me that folks sometimes fail to take the right action because they see such behavior as self-denial. Let’s say you are interested in becoming a stay-at-home mom. Are you going to deprive yourself of that experience because you are more afraid of the loss of income? Too many people do. Let’s look at other examples:
“I’m bored now. I’ll buy that video game – even though I’m in debt and can’t afford it.”
“I want something nice to eat right now. I’ll chomp down that chocolate – even though I’m trying to lose 15 pounds.”
“I’m lonely. I’ll go out with that person – even though I know he’s a loser and he’s the last thing I need in my life.”
“Jim owes me money but I have no idea how to collect a debt. I’ll just hope he pays me one day.”
We do these things because we want what we want when we want it. We don’t want to deny ourselves. I think that if we shift the way we “hold” these decisions, we might make better choices (I say “we” because I’m not exempt from these mistakes either).
I can illustrate what I mean if we look at money. Say you really want that new (video game/BMW/vacation). You remember that you promised yourself you wouldn’t buy anything you didn’t really need until you paid off your credit card balance. You walk safely past the store with your wallet in your pocket. By passing on that purchase, have you practiced self-denial?
No way. You’ve given yourself tremendous gifts. You’ve instantly given yourself the following:
1. You’ve proven that you are a “big boy/girl.” You’re an adult. That’s very self-esteeming.
2. You’ve lived up to the promises you made to yourself. Also, not too shabby.
3. You’ve taken steps to get out of debt. That’s the gift that keeps on giving.
4. Maybe you modeled a great behavior to your spouse, kids and/or friends. That’s worth something too.
You get the idea.
When you say “no” to one thing, you say “yes” to something else that’s usually much more important. If you went to college, you could have found job that doesn’t require a college degree, but you went the extra mile. Why? (I don’t believe everyone needs a degree. I am just using this as an example.)
I could end this post by suggesting that you go through this exercise next time you are tempted to take any shortcut. But if you wait to go through this exercise until you are in the “candy store,” it might be too late.
Let’s face it, you and I have been making stupid decisions when it comes to money, food and relationships for a long time. In fact, if you’re anything like me, you’ve become pretty good at making dumb decisions. No…if you wait to do this until it’s show time, you’ll likely fall into your default mode and go the wrong way.
Go through this process now – before you find yourself confronted with an “irresistible” offer. (Go ahead…get a piece of paper and a pencil…I’ll wait. No problem…you’re worth it.) OK. Let’s go through this together:
1. In what part of your life do you make the most consistently wrong decisions?
Do you have a problem finding the best investments?
2. Describe the exact nature of the problem in detail.
Where is it that you most often make this mistake? Who are you with? What day of the week does it happen? What time does it occur? Has anything happened immediately beforehand that triggers you into this behavior? Describe it in detail.
If you find it difficult to do this, answer the previous questions with respect to the last time you fell into the trap.
3. Write down the gifts you give yourself if you take the right action.
How do you feel saying “no” to that loser who asked you out? How do you feel by not making that speculative investment? How do you feel by not swallowing that extra double-chocolate brownie whole? How do you feel by not buying those black shoes? What do you gain? Self-respect? Momentum towards achieving your (financial, heath or other) goals?
4. Share your list with another human being.
I’m a huge fan of having an accountability partner. In fact, I think having one is the single most important thing you can do in order to achieve your goals.
5. Keep this list with you at all times.
Review it daily and even more often if you are about to enter a danger zone – one that typically triggers you into making the wrong decision.
Nobody likes to deny themselves. But when you see that by making the right decision you are actually giving yourself much more than the temporary pleasure of some fleeting material or tangible pleasure, it will be easier to reward yourself by doing the right thing. If nothing else cures you of the debt disease, consider using a compound interest calculator to add up all the money you’ll be forking over to the credit card companies if you don’t get out of debt fast.
What other techniques have you used to overcome the desire to make bad decisions? Has it worked for you over time? Share the wealth; we’re all in this together. We all need your ideas.