Along with the great weather, spring always brings with it a huge increase in my productivity. Every May, I fix about six things in the house that I spent the previous months glowering at under a blanket. I get more writing done than usual. And at my day job I start tackling long-term stretch projects, ones I didn’t have the energy for in the winter. I know this burst of energy is limited, so I try to take advantage of it.
I suspect I’m not alone in this. My energy level tends to ebb and flow in cycles, usually but not always tied to the weather. This doesn’t work great with how our world is set up, though; most of us are incentivized to get up at the same time every day and produce the same level of work with machine-like accuracy. Variation is the enemy.
Unfortunately, handling your finances is no different. For best results, you need to be consistent: you should check your budget every week, watch your expenses constantly, and pay your bills on time each month. Put money away for periodic expenses. And on and on.
But I personally cannot keep up with this constant level of vigilance. Believe me, I’ve tried. Since I can’t do this, and I care enough about personal finance to be writing articles about it, I suspect you can’t either.
Instead, I’ve been doing something I call the financial sprint. In a financial sprint, I harness a wave of energy and use it to improve my finances. I’ve had to set up a few rules to make these sprints useful:
1. Focus on Recurring Wins
Lots of financial gurus talk about “big wins”, but I’m more interested in recurring wins. Sometimes they overlap, but they’re not the same thing. A recurring win is a financial decision that will help you over and over without work. Skipping a meal out to save money is a one-time win. Switching car insurance companies to save $100 every six months is a recurring win. Recurring wins are like the dividends of the personal finance world, passively paying out gains without any effort.
2. Think Ahead to Your Sloth Phase
Your productive, kick butt, grab the world by the horns phase will not last forever. So it’s important to project how your finances will run when the days are short and you can’t bear to check your account balance. One key tool is automating habits. Are your bills auto-paying? Are your investments auto-investing? If you can set up your finances to mostly run on their own, you’ll be in a great position when you enter your hibernation cave.
3. Actions Should Flow From Goals
Money that is saved for no reason is easily pulled out and spent. Scrimping on activities you enjoy leads to resentment (and eventual destruction) of your budget. All this is to say, during your productive phase, you need to identify your goals. Goals are the CEO’s of your financial life, writing out the mission statement so that the employees (your dollar bills) know what they should be working on.
I’ve been keeping these three rules in mind during my recent financial sprint. For example, I downloaded a spreadsheet that helps visualize how quickly I can pay off my mortgage with different principal payments. This ties to rule #3 – my goal is to pay off my house before I stop working.
On the investment side, I tweaked my 401(k) contributions and got my asset allocation back in line. This helps me with rules #1 and #2; when I’m feeling lazy, my investments will still be rolling in, and buying the right investments for me without any effort on my part.
It’s funny: I’m writing this in the middle of May, and I’m already starting to feel the productive phase wear away. The days are getting hotter. By the middle of June, I’ll be laying in a hammock swatting away mosquitoes, wishing for a yard-sized dehumidifier to run. So I better get back to my finances, and sprint while I can, because time’s running out.
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