While the title reads like spam email or a late night informercial for a self-help system, this is neither of the above. Instead, this post is a continuation of the core theme: using mobile technology, free tools, and a minimalistic approach to improve our personal finances. Admittedly, this post isn't for everyone, but if you have the ingredients below, read on!
- Something, anything, you want to buy, but have been putting off for the sake of financial discipline. This can range from a new pair of shoes to a new car. Imagination is the limit here, vacations, electronic equipment, fashion, meals at restaurants, etc. are all fair game. The kicker is that funds need to be available, just unused for the sake of financial discipline.
- An activity you would like to be more disciplined about: eating healthier, working out, reading books, sleeping early, limiting TV time, etc. all qualify. In general, anything you would like to develop into a daily habit, but haven't been able to achieve the desired level of discipline, qualifies.
- A smartphone and a Google Drive account (free at drive.google.com)
Better habits and financial discipline by leveraging our material desires
The core concept is leveraging our wants as a carrot to improve our habits, all while reducing impulse purchases. In essence, every time we complete the desired activity, we reward ourselves with monetary progress towards the goal. I call this an Acquisition Fund.
A personal example
I would like an Apple iPad as a replacement for my aging desktop computer. While I have the funds to complete the purchase, I'm holding off. I also have an activity I would like to be more disciplined about: working out. In the past, like most people, my discipline would wane and I would revert to old habits: either skipping workouts or lowering intensity. Now, with my personal Acquisition Fund, I reward myself with a $10 towards my Apple iPad every time I workout with the right level of intensity. For a $500 iPad, I'll have to workout just over 50 times (to compensate for tax) to achieve my goal. And I track my progress using, free, simple, and easy-to-setup mobile tools. The incremental, but relentless progress keeps me motivated and I feel like I'm in control. Furthermore, the forced delay in actually buying the item allows for a review of how important the expenditure to my life.
Interested in trying? It's easy to get started
- Define the goal. In my example, it's an Apple iPad. However, the goal can be any material want, as long as there is a firm monetary value that you can already afford. Examples include $100 meal at a nice restaurant, $200 designer shoes, $500 TV, $1,000 vacation, etc. It should also be an item you're passionate about.
- Define the activity and the reward. In my example, I rewarded myself $10 for every workout. However, other examples include: $5 for every chapter of a book, $10 for every health meal, $20 for everyday without smoking. In general, I recommend an amount that will take about 13 weeks to achieve the goal, assuming you stay on track.
- Setup mobile tracking. There are lots of options to track using a mobile device, of which I will explore in future posts. Initial options include tools like Evernote and self-addressed emails.
photo credit: <a href="http://www.flickr.com/photos/corscri/1320198723/">Corscri Daje Tutti! [Cristiano Corsini]</a> via <a href="http://photopin.com">photopin</a> <a href="http://creativecommons.org/licenses/by-nc-sa/2.0/">cc</a>
