The word “perfect” has no place on this blog. Perfection is an unhealthy obsession and impossible to attain. So, forget about it. Instead, let’s focus on something a little more achievable, shall we? Yeah, we shall. Right in this post.
How about we focus on being “above average”. Better than the average Joe or Jane. Meaning, we generally have our shit in order, but we are far from that perfect textbook specimen of financial superiority. We’re doing fine. Things are good.
What makes us above average? Glad you asked. Here are my thoughts:
9 ways to be above average
1. Set goals, then achieve them – Having something to work toward is a critical component to improving your life. Whether it’s about money, fitness or anything else, give yourself something to strive for. Something to achieve. Of course, make it achievable and measurable. Meaning, can you identify a point in the future that represents “mission accomplished”? If so, it’s probably a good one. Set goals. Meet goals. Repeat.
2. Understand “good enough” – At what point would you consider a task to be “good enough”? Meaning, you’ve managed to squeeze a reasonable amount of juiciness out of your task using a reasonable amount of effort. There’s probably a little more juice left, but it would require substantially more effort to get at it. At this point, you say “good enough”. Think about the Pareto principle and the effort required to get the most out of life.
Of course, “good enough” is no synonym for doing crappy work or half-assing your tasks or, quite frankly, your life. The idea is to get the very most you can out of every situation, then call it good. Conserve energy for your next task or an unexpected event. Leave something in the tank, but use the majority of it to completely rock out your life.
3. Possess “Oh shit!” money – This is otherwise known as an emergency fund or rainy day fund. In other words, an easily accessible wad of cash that can be used for the unexpected nastiness of life. “Oh shit!” money lets us weather a sudden job loss, or medical emergency, or anything else that can generally be described as baaaaaaaad.
This isn’t money that should be used for just anything, though. That 80″ television that just went on-sale? Yeah, “Oh shit!” money isn’t for that. A TV isn’t an emergency. Don’t try to cheat the system, because you are the system.
4. Limit your debts (to zero?) – Owing people money sucks. You’re putting yourself at a disadvantage by borrowing money that you don’t have. Some debts are worse than others – definitely, avoid those. I’m talking credit card debt and car loans, mainly. Debts for depreciating assets. Above average means your debts actively improve your collection of assets. A mortgage on a reasonable property might be a good debt. Student loans may as well.
5. Know your financial picture – You don’t need to know your exact net worth, but at the very least, know where you stand. We use Personal Capital for that, but there are a number of different services that can help.
Understanding your current financial picture is the only way to recognize whether you’re improving…financially. For example, do you have more money today than you did this time last year? By how much? If you can honestly answer that question, you’re way the hell above average!
6. Automate – You make it much easier for yourself when you automate your finances – at least some of them. Setting up automatic transfers into your savings and investment accounts means that you’re no longer on the hook to remember to do that stuff. Automation means you’ll never forget. It just happens, every single month. Every time. Set it up once, then move on with your above average life.
7. Don’t upgrade your phone every year – Seriously, if you’re the type of person who walks around with a phone more than just a year old, I’m proud of you. It means you probably understand value and don’t necessarily “need” to have every gadget upgrade, regardless of the price. Up until a couple of weeks ago, I used a hand-me-down iPhone 5s. I have since switched to a Moto G5+ that I snagged on sale from Costco. I’ll use it until it dies.
Here she is, sitting atop Money Magazine.
8. Read – Anything. Just read. Read magazines. Read books. Read blogs (especially this one???). For extra credit, seek out voices that you probably disagree with and read those things too. The more you read, the greater your understanding of life. I’ve never been a huge reader, but recently forced myself to begin reading a lot more. Even if it’s fiction, reading is stimulation for your brain. It keeps it moving, safely and efficiently.
9. Smile – Admit it, we like to associate with people who smile, don’t we? Their smile is infectious. Contagious. People who are happy are way more fun to be around. So, be one of those people.
There you have it. 9 ways to be above average in your life. How do you compare with these ways? Or, got something to add? You know what to do…
This article contains an affiliate link to Personal Capital. By using the link, you’re helping to deliver a few bucks in my direction, and best of all, it costs you nothing. 🙂
Steve is a 38-year-old early retiree who writes about the intersection of happiness and financial independence. Steve is a regular contributor to MarketWatch, CNBC, and The Ladders. He lives full-time in his 30′ Airstream Classic and travels the country with his wife Courtney and two rescued dogs.