What Would Personal Finance Look Like If It Were Easy?

3 min read

I recently listened to a Tim Ferriss podcast episode with Chase Jarvis where the two discussed ways in which they optimize their lives. They shared tactics, habits, and rules they use to increase their productivity without increasing stress.

Tim shared one idea in particular that stood out to me. He said whenever he feels overwhelmed, he asks himself a simple question:

“What would this look like if it were easy?”

This question forces Tim to envision the easiest, most simple solution to his current problem. Specifically, it helps him focus on “the big picture” and not obsess over the tiny, insignificant details.

I think this technique can be applied wonderfully to personal finance. Here are some potentially easy solutions to overwhelming financial topics.

What would investing look like if it were easy?

  • *Invest a certain percentage of each paycheck in a total stock market fund. If you want less volatility, add a total bond market fund to the mix. Rebalance once per year.

What would spending less look like if it were easy?

  • Take a Cait Flanders approach and do a complete shopping ban. No need to stress about what to buy and what to avoid. Just buy nothing. Or try The Frugalwoods approach and participate in the Uber Frugal Month. Embracing uber frugality for one month is the easiest, fastest way to change your perspective on spending.

What would minimalism look like if it were easy?

“You see, I didn’t want to spend months slowly paring down my possessions like Josh had. That was fine for him, but I needed faster results. So we came up with a crazy idea: let’s throw a Packing Party. (Everything is more fun when you put “party” at the end.) We decided to pack all my belongings as if I were moving. And then I would unpack only the items I needed over the next three weeks...

…Each box was labeled so I’d know where to go when I needed a particular item. Labels like, “living room,” “junk drawer #1,” “kitchen utensils,” “bedroom closet,” “junk drawer #7.” So forth and so on.

I spent the next twenty-one days unpacking only the items I needed. My toothbrush. My bed and bedsheets. Clothes for work. The furniture I actually used. Kitchenware. A tool set. Just the things that added value to my life.

After three weeks, 80% of my stuff was still in those boxes. Just sitting there. Unaccessed. I looked at those boxes and couldn’t even remember what was in most of them. All those things that were supposed to make me happy weren’t doing their job.

So I donated and sold all of it.”

What would tracking my net worth look like if it were easy?

  • Use free software to do it for you. I personally use Personal Capital. Minimize stress and anxiety about net worth by only checking it once per month. Or once per quarter.

What would learning more about money look like if it were easy?

What would increasing my income look like if it were easy?

The Power of Pareto

Use the Pareto Principle to make things easy.

Knowing that 80% of your desired results will come from 20% of your efforts means the answer to the question “What would this look like if it were easy?” will almost always point you to the 20%. 

Some people (like myself) actually prefer to exert extra energy to track their net worth, invest in different areas, and manually rebalance their portfolio, but we’re the outliers. Most people are looking for easy ways to simplify their financial life. For these people, the suggestions I provided above will get them 80% of the results with only 20% of the effort. 

I think with the amount of financial apps, technological aides, and sheer quantity of information on the internet, personal finance has become a confusing, opaque field that most people find intimidating. But personal finance doesn’t have to be hard. Nor does it have to be scary. 

When you feel overwhelmed by your finances, try asking the question:

“What would this look like if it were easy?”

My favorite free financial tool I use is Personal Capital. I use it to track my net worth, manage my spending, and keep an eye on my monthly cash flow. It only takes a few minutes to set up and it makes tracking your finances simple and easy. I recommend trying it out.

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8 Replies to “What Would Personal Finance Look Like If It Were Easy?”

  1. Cool perspective. It reminds me of a post I just did that centered around an idea that my daughter’s first grade teacher uses when a student says they can’t do something. She tells them to pretend that they can.

    Little mind games like this are awesome.

    Happy 2018.

    1. I love that idea of “pretending” you can do something, that’s a great mental hack for young kids but also ironically adults. Self-talk can be extremely effective, I think most of us underestimate it. Happy 2018 to you as well!

  2. I like the idea of a shopping ban because there are no decisions to be made.

    I often use heuristics to help curb my spending. For example, unless I have an urgent need for something, I don’t pay full price for it. Finding the deal becomes the challenge I choose to take on. Also, I don’t subscribe to online retailers, so I have to physically go on the site to see items.

  3. I think sometimes you need to know or have experience in something to know what that easy thing is. For example I know running “easy” would be like getting up and getting my gear on, no mental talk at all until I’d started. However I’m still learning about finances so making it easy for me is actually taking time every day to read blogs and articles to deepen my knowledge and exposure to ideas – and I am doing the Frugalwood’s challenge too!

    1. That’s a great point – sometimes you have to build up a significant amount of knowledge to even know what the “easy” approach is. I think it’s interesting how the more you learn, the more you begin to see that the simple approaches are almost always the best approaches. Best of luck with the Frugalwood’s Challenge, I have heard a lot of positive feedback about it 🙂

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