Financial Perfection vs. Financial Progress

Winston Churchill, arguably one of the twentieth century’s greatest statesman, had many lasting and impactful aphorisms. One saying, attributable to his wit and insight, is, “Perfect is the enemy of progress!”. Churchill likely borrowed this saying from the late seventeenth century Enlightenment philosopher, Voltaire, who probably adopted the aphorism from an earlier unknown work. But regardless of its origins, here at Yeske Buie and as members of the financial planning profession, the saying’s truth and timeless wisdom resonates with us.

The reality of the world today is that we are living in an age of perfectionism. According to a recent Harvard Business Review article, “A record number of young people worldwide are suffering from serious depression or anxiety disorders. In some sections of society, there is a tendency to dismiss this trend as the product of an over-indulged, over-entitled, and over-sensitive ‘snowflake generation.’ To the contrary, there is growing evidence that the increase in psychological ill-health of young people may stem from the excessive standards that they hold for themselves and the harsh self-punishment they routinely engage in. Increasingly, young people hold irrational ideals for themselves; ideals that manifest in unrealistic expectations for academic and professional achievement, how they should look, and what they should own. Young people are seemingly internalizing a pre-eminent contemporary myth that things, including themselves, should be perfect.”1

Think about it: all around us, we’re bombarded with images of perfection. Advertising and social media tell us that we must act a certain way, hold a particular job, drive the right car, live in the right place, have the right friends, and possess the right amount of money to achieve success. That said, the idea of perfection and of having the “perfect” life is an abstraction, an impossibility in reality. What researchers are finding as a result of this chase is a subliminal but profound connection between perfectionism and procrastination.3

From a financial planning perspective, some may consider procrastination to be the enemy of financial success, just as time is its greatest ally. When we value financial perfection over financial progress, just getting started in creating a financial plan can feel overwhelming. We tell ourselves we shouldn’t start investing because the market is too high or too low. That we shouldn’t begin to save because the job we have doesn’t pay enough, we have too much debt, we’ll owe more in taxes, or we don’t have enough investment knowledge. We tell ourselves it’s not the right time to re-evaluate our insurance coverages, build or update our budget, or complete our estate plan because we’re too busy with work, family, friends, and life. In each of these cases, we feel like the perfect time to accomplish our financial goals isn’t now, and we think at some point in the future, the ideal time will come. The problem is, as we all know, there is no perfect time; life always happens.

So, what are some ways to overcome the tendency to seek perfection so you can get started on tackling your financial goals?

• First, recognize there is never going to be the perfect moment to get your financial life in order. The markets are always going to be in flux, there will always be competing claims on our income and time, and debt and spending will be a part of life. If you allow the apparent complexity of the topic to overwhelm you, it will. And if you wait until the perfect moment to get started, you’ll never start. When it comes to successfully managing your finances, taking small steps now can lead to huge rewards later. For example, start by taking a few minutes each week to learn more about saving and investing. Warren Buffet famously said, “The best investment you can make is in yourself. The more you learn, the more you earn.” One of our favorite books on the topic of investing is The Investment Answer by Daniel C. Goldie and Gordon S. Murra. If you’re looking for a place to get started learning more about saving and investing, this concise and approachable book provides an excellent overview.
• Next, get organized. Take stock of all your accounts, know your online login and passwords, and review and save important financial and personal documents in a safe and secure place. Make a list of the tasks you need to get done to bring your financial life into order. Set deadlines to achieve these tasks, and tackle each item, one at a time, piece by piece. Also, it’s a good idea to make it a habit of reviewing your bank and investment accounts as often as you feel comfortable. You don’t need to watch your accounts every day or even every week, but you should check in a couple of times a month to review statements and to look for any abnormal activity. After you’ve organized your personal and financial accounts, spend time observing and tracking your monthly cash flows. Begin to notice how you’re spending your money, and how the money flows out. As the old saying goes, “You can’t manage that which you don’t measure.” We’ve written about some excellent online tools such Mint.com that can help manage this task. Or as an alternative, you can create a simple cash flow statement using excel, or a pen and paper to track all the income you have coming in and going out.
• Finally, a great way to overcome feelings of perfection in your financial life is to consult a financial planner. Financial planners, through the financial planning process, offer a unique perspective on your finances that aren’t otherwise available if you try to manage all the aspects of your financial life on your own. Here at Yeske Buie, we help our Clients make sense of the complexities of the financial landscape. To overcome the tendency to seek perfection and to procrastinate, we act as ambassadors of your future financial self. We prioritize competing interests, model trade-offs, organize important documents and keep track of time-sensitive deadlines. The synergy of our relationship with our Clients allows them to make progress in overcoming financial challenges. And perhaps the most critical element a Planner can provide a Client is peace of mind, knowing, regardless of external world circumstances, that they are doing all they can to maximize the chances of achieving financial success. So next time you feel like it’s not the perfect time to address your pressing financial problem, give us a call and allow us to help you see the situation from a new perspective.

SOURCES:

• Hill, T. C. (2018, May 30). Perfectionism Is Increasing, and That’s Not Good News. Retrieved October 10, 2018, from https://hbr.org/2018/01/perfectionism-is-increasing-and-thats-not-good-news
• (n.d.). Retrieved October 10, 2018, from https://www.psychologytoday.com/us/basics/perfectionism
• Clear, J. (2014, March 03). No, You Shouldn’t Obsess Over Being Perfect — Especially When Starting Up. Retrieved October 18, 2018, from https://www.entrepreneur.com/article/231771