3537: Why the Small Things Matter by Andrew of Dollar After Dollar on Power of Small Things

[00:00:00] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto update throwing off your momentum. That's why Dell builds tech that adapts to the way you actually work. Built with long lasting batteries so you're not scrambling for the moment.

[00:00:30] The closest outlet. And built in intelligence that makes updates around your schedule not in the middle of it. They don't build tech for tech sake. They build it for you. Find technology built for the way you work at Dell.com slash Dell PCs. Built for you. This is Optimal Finance Daily. Why the Small Things Matter by Andrew of Dollar After Dollar dot com. In the 1980s, a few researchers came up with a proposed idea of the

[00:01:03] idea that they thought would help reduce crime in the US. They called the theory broken windows. The idea was fairly simple. A broken window is a sign of a community that has been neglected. In turn, a community that has been neglected is more likely to have an increase in crime rate. The hypothesis was if police could fix the small problems, such as broken windows, the big ones would disappear.

[00:01:29] This idea came from a research experiment in 1969, where a psychologist abandoned two cars on the street. One in a very poor, crime-filled neighborhood in New York. The other in an upscale neighborhood in Southern California. Within 10 minutes of leaving the car in the poor neighborhood, people began taking things of value, such as parts. Shortly thereafter, people began to vandalize the car and eventually smash the windows.

[00:01:55] Yet for more than a week, the Southern California vehicle remained untouched. The psychologist then went and smashed the California windows himself. Once the windows were smashed, the car was fair game for criminals. The same events transpired that went on in New York. It was stripped to pieces and completely destroyed.

[00:02:16] This led to a theory. Once disorder begins, things can get out of control. With the way my weird brain works, this experiment reminded me of money. You see, many of us, including yours truly, have habits that have formed with money. These habits may be small, but can affect the overall big financial picture.

[00:02:37] As I've said many times, money is about 80% psychological, and every choice we make has another alternative. If you're not getting what you intend out of your money, it's time to fix the broken windows. I work with a lot of people looking to boost their financial situation by setting up budgets or investments. I love doing this because I can extend a helping hand to someone who cannot figure out where they went wrong.

[00:03:03] What I find is many people have a few small issues that are leading to much bigger problems. Most people know their one vice that they want to focus on. I spend too much on groceries. If I just spent less, I could save money. I need to stop going out so much with friends. I spend $200 every weekend. I buy too much clothing. Much of it I don't even wear. These are our financial broken windows.

[00:03:30] The issues that seem like they're small, but if fixed, will be of huge benefit to us. If your broken window is not letting you save money for your future, it needs to be fixed immediately. Don't wait until you're older and it will work itself out. Time is the most valuable financial asset we have. When it comes to saving and investing, you need to start as young as possible.

[00:03:53] The problem with these small issues is they give us a psychological excuse that we don't have to be disciplined when our money is not working in our favor. If you let your brain slip up in one category, it can carry over into another. I see people doing this in other areas of life. I'll just have one cupcake. Turns into, I blew my diet for the day. I'll eat whatever I want. Then eat clean tomorrow. Most of the time you keep up the same habit and it never gets resolved.

[00:04:23] The same goes for your finances. I already spent too much on restaurants. What would one more meal hurt? Nip this in the bud because it can grow to a larger problem. Many people will tell you not to sweat the small stuff when it comes to money and worry about the big things such as growing your income. I could not agree more. But because psychology plays such a big role, your small bad habits will grow into larger issues. Take spending, for example.

[00:04:51] If you begin to overspend every month, you have now accumulated a small chunk of debt. That debt grows larger and larger over time until you realize you have a major problem. For someone starting out, if they don't sweat the basics, they will never make it to the big leagues. How do I fix my broken windows? If you're someone who does not keep a budget, then start here. This will give you an idea of who, what, where your broken windows are in your finances.

[00:05:22] Once you begin budgeting for a few months, it'll be very easy to see the broken windows and put a stop to them before they get worse. Sometimes the windows are not broken. If you already keep a budget and notice you overspend in a specific category regularly, then you may need to raise the amount you contribute to that category. Your budget shows what you truly value. This is especially true if you've tried many times in the past to spend less on the category but have failed.

[00:05:51] Just move some money over from another category. When I started tracking my money, my goal was to save as much as I possibly could. So naturally, I did not add enough money in just about every category. In turn, I realized I do value eating at restaurants or buying new kicks. I adjusted where my values were and the stress melted away. If I have to retire one year later in order to be happy for the next 20 years, I'll take the latter any day of the week.

[00:06:19] So if you find you have some of these issues, see if you can fix it before it gets worse. The last thing you want is the things you enjoy to become stressful every month. Nobody gets it right the first time. Adjust your priorities, enjoy your life, and repeat. You just listened to the post titled, Why the Small Things Matter by Andrew of DollarAfterDollar.com.

[00:06:47] Dell PCs with Intel inside are built for the moments that matter. For the moments you plan and the ones you don't. Built for the busy days that turn into all-night study sessions. The moment you're working from a cafe and realize every outlet's taken. The times you're deep in your flow and the absolute last thing you need is an auto-update throwing off your momentum. That's why Dell builds tech that adapts to the way you actually work.

[00:07:14] Built with long-lasting batteries so you're not scrambling for the closest outlet. And built-in intelligence that makes updates around your schedule not in the middle of it. They don't build tech for tech's sake. They build it for you. Find technology built for the way you work at Dell.com slash Dell PCs. Built for you. I don't know about you, but even with regular cleaning, it seems like dust is never ending.

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[00:08:37] Get this exclusive podcast-only offer now at airdoctorpro.com, A-I-R-D-O-C-T-O-R-P-R-O dot com, using promo code OFD. This article reminded me of my tendency around all-or-nothing thinking. Logically, I know that answering one email is better than answering no emails, but if I don't have enough time to get to inbox zero, then I won't bother.

[00:09:05] All-or-nothing thinking is rooted in perfectionism, something I've personally been battling for many years. This is why if you deviate from your budget slightly, you'd rather throw out the whole spreadsheet than dust yourself off and keep going. This is why when you miss one day at the gym, it turns into one or two weeks. It's not a logical exercise. Perfectionism is driven by emotion, and I feel it requires mental jujitsu to overcome it.

[00:09:35] The way I do this is by lowering my expectations. I used to feel like I was letting myself off the hook when I lowered my expectations, or I would do it half-heartedly. I'd tell myself it was okay to just answer one email, but I didn't really feel that was true. Now I see it as a way to trick myself into any form of forward movement. When I have 10 things on my to-do list on a day that I'm completely exhausted,

[00:10:03] I used to procrastinate on all of it. That was all-or-nothing thinking at work. These days, I look at the list and ask myself, what is the one thing I could get done? And I reschedule everything else. I truly let myself feel satisfied with getting that one thing done, and that puts me in the headspace to rest well and try again the next day. But that will do it for today. Have a great day and weekend, and I'll be back here tomorrow where your optimal life awaits.

[00:10:33] Let's...