How often do you try to do more than one thing at once? For me, it’s almost every time I sit down in front of my computer. I have music going on in the background, perhaps watching a review or video on youtube, while trying to write an article and every so often I’m glancing over at a book that’s open next to my computer. Needless to say, I’m often juggling tasks that aren’t necessarily productive and often detour me from my task at hand. At the moment as I’m writing this article I’m focusing only on this article (so I’m behaving), and guess what… it’s working! Although I probably already knew it in the back of my head, researchers have found that multitasking simply doesn’t work.
In a fairly recent episode of frontline (yes I’m a geek that watches frontline) researchers tested students who thought they were being super productive by doing several tasks at once. Turns out they were just being super distracted. I won’t go into the mechanics of it all, but if you’d like to read more about why that’s the case check out this related article. The point is this. By trying to do too many things at once people are often less productive than simply focusing on one task and doing it well sequentially.
How This Affects Your Wallet
Having tunnel vision and ignoring externalities and distractions will make you much more successful than trying to do everything at once. In personal finance those distractions are often purchases. Focus, focus, focus on the task at hand! Whether it’s eliminating your student loans, paying down your second mortgage, or adding to your passive income fund make your focus concrete so that with absolute certainty you know that this is your task and you won’t be knocked off track. Spending time thinking about too many financial priorities will simply leaving you feeling exhausted, overwhelemed, and a bit like you’re not getting anywhere. Who can blame you when you’re setting yourself up for failure?
When you’re standing at the store debating on whether or not to purchase that next new hot item it’s a lot easier to say no because you want to pay off your student loans rather than saying you need to pay off your student loans, your car, your house, save for retirement, and your next vacation. If you become overwhelmed you’ll probably just give in and buy that hot item because let’s face it… you’re never going to reach all those goals anyways, right? Make your financial goals simple so that you believe you can achieve them and can easily track them.
If you want to eliminate debt or add to your fund focus solely on that. Much like the idea of a debt snowball you’ll reach your goal quicker and feel better about it than having scattered financial goals that you might not hit for a very long time. With more of a positive reinforcement with smaller successes you will be encouraged to stay on track. Yes managing your personal finances can seem a bit daunting at first, but doing one thing at a time first is how you’re going to learn (a bit like taking baby steps). If you’re deep in debt you don’t need to think about how to earn your first million… yet. You need to focus on getting out of debt and controlling your spending before moving on to the million dollar monster goal.
So much like a college student doesn’t learn as well when listening to their ipod, watching a movie, and trying to study, you probably shouldn’t try take on too many financial goals at once either. You might also want to reconsider the purchase of an ipod as well while you’re at it 😉
How I Manage Financial Distractions
I’m pretty focused on my financial goals at the moment. A net worth of $50k by my 26th birthday and no debt are really my only goals related to my finance. Doesn’t seem too complicated or involved considering I run a financial blog, but what else do you really need? Sure I have goals related to websites, personal fitness, and other areas of my life, but making your financial goals can be pretty straightforward. After all you can easily calculate where you’re at and where you need to be. Any time I come across distractions whether they’re purchases, potential business ideas, or otherwise I simply ask myself if they’ll get me closer to the goals I’ve set for myself. If not, then they’re distractions, if so, then I’ll take a closer look.
Avoid spending too much of your time distracting yourself with needless tasks and waste less spending. Rather, make yourself a lean mean financial goal achieving machine!
What distractions do you have from reaching your financial goals?
Do you use the snowball technique to build on small successes rather than focusing on all your goals at once?
Image from mn_francis