There are three things that stop most people from looking after their personal finances;
- it’s boring
- finding the time is hard
- it can take a really long time to see any significant result
Even I struggle with applying the effort to work on my personal finances and I write about why you should be doing it every single week. While it can be easy to lump your personal finances into a ‘too hard‘ pile, it really isn’t any different to the other things you do in life and manage to make time for.
I often don’t feel like staying up all hours of the night writing, but I do it consistently because I want to get better and grow something I feel passionate about. I don’t generally want to go to the gym, but I do it to stay healthy and feel better as a result. I especially don’t want to go to work 5 days a week when I could be doing other things, but I do it because I know I am working towards something.
I spend a fair amount of time thinking about the things that I do and don’t like doing, mostly so I can develop ways to do more of what I want and less of what I don’t. Over time, I’ve realised that the catalyst for taking action, even when I don’t feel like it, has been having someone that holds me accountable.
The Accountability Definition
There are certain things that are generally expected of you in life. Most people are generally expected to go to school and do the right thing, get a job and do the right thing and go through life doing the right thing. We do this because there are generally people that hold us accountable along the way. Most people are quite good at doing the right thing, possibly because they are just good people (which is the way I like to imagine it), but more likely because there are consequences if they don’t.
I think that I probably work harder for someone else than I do for myself, is this really the way it should be? Perhaps not, but I have a very clear view of who holds me accountable and know that I need to produce results.
Fortunately for most of us the rest of our lives aren’t generally too regulated, the freedom is great, but sometimes it can also be a problem. Because we spend a lot of our time doing the things we have to do for others, we often don’t do the things that we should for ourselves. If you are really serious about your personal finances, then it might be worth implementing some whip cracking tactics in order to get more done.
Who is Cracking the Whip?
I’ve spoken about the power of groups before, they can be a really useful way to help you achieve more in any aspect of your life. As far as I’m concerned a group is any number of people above one, so if you can find yourself a buddy, then you are in business.
Many people turn to their partner or family member at this point and expect them to be their personal finance fitness coach, reminding, encouraging, insulting and rewarding all of their efforts (or lack thereof). These people can be great support and you do need them on your side, but often you are too close to them, so they have far less than the desired effect.
What you really need is a friend and preferably a hard ass that won’t take excuses, even better is if they also share a similar interest to you (this way you get to dish it back up to them and encourage each other). My gym example demonstrates this perfectly, I go because I have made a commitment to a bunch of friends. If I don’t turn up, they get on my case (and I feel bad about letting them down), if they don’t turn up then I do the same to them.
Your personal finances are no different. If you can find multiple people to get involved, all the better, but try finding at least one person that will commit to holding you accountable and make sure you are just as committed to them in return.
Do One Thing
Doing one thing at a time is the fastest way to achieve any goal. Strangely, most people have trouble with this concept and try to multitask as much as possible.
The logic is very basic; the further you spread yourself, the less energy you can put into a task, the harder it is to reach your goal.
It is far better to be super specific and do one thing at a time. Many people don’t like this approach because they can’t see quick gains or big differences immediately, so they take on too much. It can be easy to get frustrated with your personal finances because of this, but if you focus on doing one thing at a time, you will be amazed how quickly you can see a change.
Use the single objective approach to your advantage and break down every goal, every process, every step in your personal finance plan. Picture yourself as a project manager and develop a timeline with events and milestones you want to reach in order to deliver your final objective. Once you have your timeline of single objectives, hand this plan to your boss (the whip cracker) and make them hold you accountable.
All of your work up to now is going to be completely useless unless you have a way to set your objectives, schedule timely reminders and be able to track your progress, so I’ve put together a list of tools that will help hold you accountable.
Pen and paper
Remember these guys? they can be especially helpful when the paper is a sticky note or you have some tape as well. Write down one step, with a delivery date and stick it somewhere you will see it everyday (bathroom, wardrobe, car, office – the more the better). Action your task, then stick up a new one (make sure you give a copy to your whip cracker as well).
Google Calendar / Spreadsheets / Documents
If you are already using Google docs, this is easy. If not, then I suggest you give them a go. As well as being very simple to use (just like your normal computer software), they can be conveniently accessed from anywhere you can get an Internet connection. Best of all you can share Google Docs with anyone you want. Step out your plan in a spreadsheet, write up an outline in a document, and most importantly enter critical dates and reminders in the calendar. Share these with your personal finance buddy and they can track your every move and provide valuable encouragement and feedback.
Tip: if you have a smart phone, sync your google calendar and get reminders everywhere you go.
I’m sure you know about Skype, but what do you use it for? Skype can be a great accountability tool if you schedule regular calls with your designated whip cracker (make dates in your Google calendar). Sure you could do this by phone, but having to look someone in the face and tell them why you didn’t do what you said you were going to do should be a whole lot more effective.
I stole this idea from Tim Ferriss, but I’m sure he won’t mind. Stickk is an online tool that helps you draw up a commitment contract that binds you into achieving a personal goal. Set a goal and (financial) incentive, then choose a referee and some supporters to follow your progress. If you win, you get your incentive back, if you fail you can choose where it goes (a good cause is always nice).
Facebook and Twitter
Most people spend their time writing updates about the food they just ate or complaining about work, but Facebook and Twitter can be very useful accountability tools too. Try writing an update on Facebook about a goal you have and ask others to help you out with ideas and tips or to remind you of your goal by leaving regular posts on your wall. Go follow some interesting people on Twitter that have the same goals as you and interact with them by sharing resources, giving shout-outs and encouraging their achievements (there is a very good chance then will do the same back to you).
If you want to connect with more people that are interested in the same thing as you, you may like to try a blog. There are a lot of personal finance bloggers that use this medium to publicly list and track their debt, or personal goals in order to remain motivated. This kind of transparency is often very refreshing and readers are generally very good at tracking progress, encouraging you and holding you to account. You can set up a free blog in a matter of minutes with Blogger or pay a few dollars and get a fully hosted website like this one if you plan to do it over the long term.
Forums and Online Groups
There are forums and online groups for just about every topic you can think of, Yakezie is my personal site of choice for all things related to personal finance and blogging. Whatever it is you are interested in (saving, stocks, property), you can find it by typing this, followed by the word forum or group into Google (simple right?). If you want to get more specific and find groups near to you, just add your location to the search and see what comes up.
Tip: Be as engaging as you can and give as much (value) as you can. The more you give to others, the higher the chance they will give back to you. The online world is very much a 2-way street.
If you are really want to take this to the next level and get very serious about achieving your goals, then why not get your very own PA? It is very easy to find someone through an online site like oDesk, Elance, or post an advert on Craigslist. Pay them an hourly rate (this can range from $5 to $50) and get them to help with almost anything you like. Maybe they can do some ground work for you investigating the best deals on insurance, or do online research for your business idea. perhaps you could outsource some writing or design work, or maybe you just want them to keep your calendar and harass you about doing the things that really need to be done on a regular basis.
Whatever you end up doing to improve your accountability, make sure it works for you and that you stick with it. It may take a little while to pick up the habit, but with someone to help, there is a much better chance of success.
I hope that there is something in here that you find useful. If you have some other tools and suggestions I’d love to hear from you in the comments below.
Image by Stéfan