We thought we’d take a short break from taxes, returns, and economic data to revisit an earlier piece we wrote on setting goals to start a new year. To recap: Goals must be measurable, they should have purpose, they should be realistic, and it helps to bring others along for the ride. The point about support from others is important because it is so hard to hold yourself accountable and bring the right level of motivation to make the right choices every day. But what if you must go it alone?
Rules > Goals
Even a goal that is specific, realistic, and comes from a place of purpose doesn’t include a road map when you are traveling alone. There are literally thousands of ways to lose 20 pounds or spend an hour less on your iPhone each day. Creating broad rules to follow help show you the way from point A to point B without having to reweigh your options at every fork in the road. They remove the forks all together making the trek more of a straight line, which is always the fastest path between two points.
Make fewer choices
We make so many choices on our way to achieving a goal. Think about trying to lose weight. You are out at a restaurant for dinner. Do you order an appetizer? Maybe a salad instead. Cheese or no cheese? Add chicken? Croutons? Ranch??? Now on to the entrée. You get the picture. The Cornell Food and Brand Lab conducted a study to find out on average how many food related decisions we make each day. The answer was 226.7! It is hard to stay on track when you have over two hundred individual decisions to make and any one might undo all the rest.
However, if you create rules lots of decisions begin to be made for you. Only water to drink with meals. Oatmeal or fruit and yogurt for breakfast every day. No dessert during the week. Whatever it is, set a rule and then an alternate if choice A is unavailable. The important thing is to have them in place when you need them. Pretty soon you are following your set of rules instead of agonizing over choices.
Rules make us comfortable
When we are driving in a car and approach a green light, we feel comfortable going through. Why? Because we are following a rule. We assume that the drivers going across are too and they stop at their red light. How would you approach each intersection if there wasn’t a stop sign or a light? You might stop and wait, slow down and roll through, or gun it in hopes of getting across as fast as possible. The goal of getting to the store or to work just became so much harder when we have to make a new choice about how to approach each intersection along the way. Instead, we listen to the radio or talk with other passengers completely at ease that by following the rules we will arrive at our destination in one piece. Things that are comfortable are easy. Doing something new is uncomfortable. By turning the decision-making process off we become more comfortable, and the goal easier to pursue.
Rules aren’t meant to be bent
The best rules are ones that are stiff as a board. You are the one who needs to be flexible. The best way to do that is not to be afraid of creating another one when the facts or circumstances change, rather than having a sometimes rule. As Yoda said “Try not. Do. Or do not. There is no try”. If you try to follow a rule when you can it loses its power to help you. Instead change to a new rule that you can follow all the time.
For example, you might have a rule to exercise Monday, Wednesday, and Friday right after work. When work gets busy you tend to stay later and skip the workout. Now to achieve your goal you have to make a decision about if you are going to make up the one you missed, and if so when. The solution is to change the rule. Try the same days before work so that you’re not scheduling a make up time.
Process over Outcome
The reason why focusing on the rules is so impactful is that it highlights the process more than the outcome. Consistently following good rules won’t lead you to achieving your goals 100% of the time, but the odds are in your favor. Likewise, a terrible process will sometimes result in successfully achieving a goal by accident. If you’ve ever heard the story of someone who survived a car wreck only because they were NOT wearing a seatbelt you get the point. The fact is that wearing a seatbelt reduces your risk of a fatal injury by about 50%. You can control your process, but you can’t control the outcome.
If you are wondering what this applies to at Daviman Financial, the answer is everything. We love rules. Rules for saving and paying debt (make it automatic), rules for managing investments (rebalancing and investment selection), and even rules for what financial planning issues should be tackled first. If you have a goal you are currently trying to accomplish, think about what choices you could build rules around to help you get there. If it is a financial goal, please give us a call and we can help you create some time-tested rules to get you there.