I’m prone to “Ah-ha!” moments. Sometimes, I understand that I need to do something and even know what I have to do in order to succeed, but things just don’t click until I have my “Ah-ha!” moment. For a sporting example, during the preseason of my senior year of high school baseball, I started off struggling terribly at the plate. Something was wrong and I spent extra time in the cages trying to tweak little details to try and fix it, but to no avail. I kept stepping up to the plate, however, and kept swinging. Finally, in my last preseason at bat, I had my “Ah-ha!” moment where everything just clicked and I found my stroke. I kept firing in the batter’s box as I took my cuts and, after accomplishing the main goal (hitting the ball successfully), I was able to aim my attention on the more intricate parts of hitting (techniques to improve power, situational hitting, etc).
I’ve had two similar “Ah-ha!” moments this week, one pertaining to personal finances and one to time management. Just like my senior year of baseball, they relate to the Ready, Fire, Aim! approach. The first example will piggy back on [intlink id="1003" type="post"]Stephanie’s recent post on living in harmony with your money[/intlink].
I’ve been kicking around the idea of saving for different goals for a while now: money to put toward student loans, books, a car, etc. I’ve been aiming for quite a while, and, not surprisingly, little has been accomplished. Finally, instead of continuing to aim and waste time on minutia, I decided to fire. I went and set up the appropriate sub-accounts at my savings bank ING Direct, created a spreadsheet with some rough estimates of how much of my income I wanted to dedicate to each goal and divided the money I already had saved accordingly. As a result, instead of one lump sum sitting in a single account with no specified purpose, I now have money put aside in separate sub-accounts for student loans, books, investing, a down payment on a house, a car, motorcycle, a tattoo, an emergency fund, and spending money (This may seem excessive, but you can set up a sub-account at ING in less than 2 minutes and all your accounts are linked to one log-in. I set this all up and funded the accounts in under an hour. Plus, I use Mint.com to monitor all my accounts). I was Ready, and I Fired.
Now, onto the Aiming. I’m a big fan of making spreadsheets and I really enjoy coming up with different functions to make savings and money management seems cool. That simple spreadsheet that started out with just a few columns and rows and percentages now contains specific goals, functions that track my progress toward those goals, and instructions for where to allocate the money from one goal once it is reached (I’ll be working on charts when I have more free time. I know, I’m a bit nerdy. I embrace it.) I also made decisions on how to chase my goals. Do I want to save for some goals more aggressively now, reach them sooner, and then direct the extra money to other goals? Do I want to keep everything as a percentage and on the same schedule? I’ll look to cover more on this in a later post, as I strongly believe that getting on top of you finance and setting savings goals early in your college career is critical.
Quick review in case I lost you there in the Excel geekiness:
Ready: I had a goal to set up a savings plan.
Fire: I set up simple accounts, created a simple spreadsheet, and allocate initial deposits based on that simple spreadsheet. Emphasis on the simple.
Aim: I’m continuing to tweak my plans to achieve my goals and pimp out my spreadsheet.
My other “Ah-ha!” moment came at lunch today. I was reviewing the schedule I set up last night for today’s work and the actual work that I had gotten done this morning. I have 3 goals for today, in addition to the everyday stuff like class, meals, etc:
1) Finish catching up on my Psychology reading
2) Review my Philosophy paper assignment and make notes on my intended topic
3) Do research for my Internal Business project to gather preliminary info on my topic.
I had created an initial schedule last night that had chunks of time dedicated to each task. Because, in the past, psychology has tended to bore me (my apologies to any psych majors out there), I wanted to split up the time I’d spend on psych during the day. However, I found myself “in the zone” this morning and was able to knock off all my Psychology reading in one block of time. This spilled over into the time I had dedicated to my IB project, so I moved that to a time block later in the day dedicated to Psychology. Long story short, my Psychology reading is done, my IB research for today is completed, and I’m set to work on Philosophy later today during another time slot I’ve put aside.
Ready: I had a list of 3 goals for the day and a quick schedule that created last night.
Fire: I got to work on my schedule and started my psychology reading as planned this morning.
Aim: I found myself flying through psychology and continued with it, even though I was scheduled to switch to IB. I tweaked my schedule so I would still get my work done.
Moral of the story: My savings plan is in effect and I have money put aside for all my savings goals and my work got done in the time I allotted to work today, although not in the initial manner I had planned. I was ready, I fired, and now I continue to aim as I tweak things as I go along and uncover more efficient ways of doing things.
For each task, there is one goal, but multiple ways to achieve that goal. As the saying goes, a journey of a thousand miles begins with a single step down a road. A few step later, however, you may discover a shortcut through the woods that will allow you to reach your goal more efficiently. Will you be flexible enough to venture into the woods or will you be glued to the road?