3 Ways to Fix a Money Recipe that Sucks

A little while back, I wrote a post entitled “Start with Why”.  I thought it was a good title (thanks Simon Sinek for the free market research), and I thought that I had many thoughtful and insightful nuggets of wisdom nestled throughout the words and paragraphs of my piece.


After I posted, I got some good feedback, which I really appreciated.  Much of it was in support of my view, which is that the WHY behind wanting to experience greater financial success is far more critical than the HOW, because it is the WHY that drives the behaviour and ensures it will last long term.  As I said, I thought it was deep, insightful, and had a message that isn’t being preached loud enough in personal finance circles.


One comment I received, however, really got me thinking.  And like most of the times this happens (I get thinking), it was someone who challenged my point of view.  


Michael James is a personal finance blogger and he is a wise man. I’ve followed him for a while on Twitter (@MJonMoney) and he is often a voice of reason. Here are a few things from the About page on his website www.michaeljamesonmoney.com:


I like to understand all things financial so that I can make prudent investing and personal finance choices.  The best defense against mistakes is understanding.  This blog is my attempt to explain financial matters clearly for non-specialists.


It’s better to think for yourself than to follow anyone’s financial advice blindly.  I listen to many people and then try to sort out the wisdom from the folly.


As I said, wise guy.  Here’s what Michael tweeted back to me after I shared my post with him:


“Focusing on why you want to make financial and other life changes is important. But too often I see dreams of a better future lead people to buy lottery tickets rather than make positive changes. Some other ingredient is missing.”


The Missing Ingredient(s)

“If the recipe sucks, it doesn’t matter how good a cook you are.” – Tim Ferriss, Author: The 4 Hour Work Week


The recipe for winning with money that most people use sucks.  It’s gross and it’s dangerous. 

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 It relies on the idea that somehow, someway, wealth will drop out of the sky onto random people.  The recipe is missing a key ingredient.


It got me thinking about the relationship between the Why and the How in our financial success and a quote I read a little while ago.  


A goal without a plan is a wish. – Herman Edwards (professional football coach)


There are lots of people who have a firmly established Why.  I want to be rich so that I can:

  • Spend more time with my family
  • Wake up each day at noon, eat meals in my underwear and never shower, and play video games until my eyes dry out or the Visine runs dry (junior high student)
  • Quit my crappy job that I hate
  • Take sweet vacations and live la vida loca (pardon the Ricky Martin reference)
  • Start my own business
  • Start my own non-profit or charity
  • Retire early and leave the rat race
  • Focus on my hobbies
  • A million other things


There are no shortage of why’s. Many people know exactly what they’d do with a million dollars if they hit pay dirt and won the lottery, or some other financial bonanza.  But it’s not a realistic expectation.  The odds of winning the lottery vary, but for winning the Lotto Max $15 million dollar prize are one in 28,633,528.  One person in pretty much the entire country of Canada.  ONE!!! 

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Those odds are so long that you are more likely to:

  • Be killed in a terrorist attack while travelling (1 in 650,000).
  • Die — during an average lifetime — of flesh-eating disease (1 in one million).
  • Be killed by lightning (1 in 56,439). (CBC)


Having a Why but no concrete plan to move yourself forward, will not succeed.  This is why most people never achieve financial freedom.  They are dreamers, not doers.  The Why with no How is a recipe that sucks.  


But the missing ingredient isn’t just one ingredient at all. It’s the synergy of both the Why and the How working together that makes the method to your money tick.


What do I mean?

The Why without the How is just wishful thinking.  How many people do you know that always seem to have grand plans, and yet there never seems to be any follow through. They want to go to school for this or that, and then they change their mind after a few months and move on to some other new fad idea.  They have big plans to start a side business to build their wealth, but they’re waiting for the perfect opportunity or an inspired idea and it never comes.  Some want to get their finances together, but things are just way too hectic to “get’er done right now”.  Kids in diapers, some in school, soccer, hockey, piano, dance, swimming lessons, and sure they need time for themselves too.  


I feel for these people.  I am these people.  My life is nuts at times.  I feel like I have almost no down time.  The other day someone asked me what was the best show I was currently watching on T.V.  My response?  After an uncomfortable amount of silence as I did my best impression of me in junior high talking to a girl I like (that is, uncomfortable, awkward silence), I stammered, “Spirit Riding Free on Netflix. My daughter watches it.”  Spirit Riding Free???  Really?? Spirit Riding Free??  That’s the best I could come up with? What a sad answer. But it provides insight into the age and stage of life I’m in right now. Disposable time is a luxury.


Why am I telling you how busy my life is?  Why should you care?  Because I get it.  I get the busyness, the having so many balls in the air you’re not sure how you’re doing it (if that’s how I feel at times you can only imagine my wife’s mad juggling skills).  


Fire, Then Aim

In the book, The Millionaire Mind, T. Harv Eker promotes the following strategy when dealing with your finances: Ready, Fire, Aim.  


Yes, you heard right.  Ready, Fire, Aim.

  • Get some information (what you are doing right now)
  • Put it into practice right away (what you’ll do after you read this)
  • Then make adjustments to your plan as you see how it works (what you’ll do after you’ve put your plan into action, liked this post, followed me on twitter, and shared it will all your known contacts on every social media network you frequent)


If I can cobble a plan for my money together with the crazy life that we’re living right now that’s good enough for me to say “Fire away!” then you can too.  What we can’t afford is to let busyness prevent us from putting a plan in place to move forward with our money.


It doesn’t have to be a complicated.  We don’t need to spend thousands of dollars on a financial planner to get things organized.  We don’t need to do hours of research online, or to go to the library and read a bunch of books on personal finance (although those things would certainly help, and we talk about them in other posts).  What we need is to have a few solid ideas in place and to move forward with the basics.  As author Jodi Picoult says, “You can edit a bad page. You can’t edit a blank page.”


The How

So if you’ve got your Why, but are struggling with the How, here are 3 easy steps to get you moving forward:

  1. Put a budget in place – there are lots of great tools out there. Keep Thrifty (@youngandthrifty), YouNeedaBudget (@youneedabudget), Mint (@mint), and my favourite right now, Everydollar (@EveryDollar).  Or you could use the good old dependable spreadsheet (@seedtime).  The mechanics of your budget, the tools you use, will evolve over time. Mine have.  What’s important is to commit to living on what you make, and staying out of debt.  The best way to do that is a spending plan, AKA a budget (what a dirty, nasty, awful word).  And the key? START. jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj
  2. Save some money – open up a savings account.  It can be with the bank you’re with right now, or an online bank like Tangerine, Simplii, or EQ. Heck, stick it under your mattress at this point.  Bury it in your backyard.  We can figure out how to maximize the savings and growth when it becomes a habit.  The key: START   jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj
  3. Don’t use your brain – Humans are naturally dumb with money.  It’s true. In his book,  Dollars and Sense, Dan Ariely explains the horror beautifully.  And the catastrophic personal debt levels we see amongst our friends, families and in the Twitterverse confirms it.  Our brains are hardwired for stupidity.  But don’t feel bad that you’re stupid with money.  So am I. And so is your significant other (I wouldn’t recommend telling them though, unless you have a very comfortable couch).  If our brain is money-dumb, what are we to do??!! STOP.


Stop using it, that is. Don’t rely on your brain when it comes to making financial decisions.  


Yes, you heard right.


Don’t use your head to make financial decisions (sort of)

Don’t do this for every financial decision you make, but to make your savings take flight, use your brain only at the beginning.  After that, take it out of the equation.  


How?  Automate your savings.  Look at your budget and decide how much you can save each month without it hurting too badly. The average Canadian says they could save $360 more a month, without even noticing, but to start, it can be any amount.  Have an extra $20 you can do without?  Save it.  Think you can get by without a 100 bucks?  Make it happen.  All banks allow you to automate your savings.  You can withdraw the money from your chequing account and make it disappear into your savings account.  The psychology behind financial behaviour says that if you make it disappear at the exact same time you get paid, you won’t even miss it (you’ll avoid what psychologists call loss aversion). POOF!! Invisible money. 

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Doing these three things consistently will make you more financially fit than 75% of the population. And starting with this trio of How behaviours, in combination with your high definition Why, will put you on the fast track to crushing your finances.


What How behaviours are you using to move you closer to realizing your dreams? Share in the comments section and I’ll be sure to respond! -Matt

4 thoughts on “3 Ways to Fix a Money Recipe that Sucks

  1. Great Post! At my age, I am still learning these basic lessons of life. Keep it up!

  2. Thanks Rick!! These truly are timeless lessons and are important at any age. You guys are doing great! Thanks for reading!

  3. Very much enjoyed reading your article. I am 70 still learning….. my best advice is try and avoid a car loan I have never purchased a new car always a slightly older model.

    1. Phyllis,

      I couldn’t agree more. New cars are perhaps one of the worst investments out there. It sounds like you’re very savvy with your money. We could all learn a thing or two from your wisdom. Thanks for reading and commenting.

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