For those who have seen it, do you remember the two Bobs from Office Space? These two gentlemen come into a company as consultants, and advise them on how to change to be more efficient. For those who ask what I do for a living, the best analogy is I am the internal equivalent of the Bobs. No, I am not incompetent like they are, and frankly my job is not focusing on job cuts either. I work for a growing company in a high growth sector, so my job focuses on how we can reduce the rate of hiring, not reduce the number of workers. My work results in higher bonuses for all employees, and it’s a lot of fun (to me at least) seeing the impact of improving a process or system to get rid of peoples’ day to day headaches. Essentially all my work boils down to is getting people to change. Personal finance, meanwhile, is essentially all about changing yourself.
The Starting Point for Process Changes
I oversimplify my job a bit because the first thing I do with any task is assess a current state. I observe data, talk to people, and analyze customer feedback. After deciding on what the big gnarly problems are, I pick the top priorities to resolve based on analysis. Then I lead a team to make system or process changes to fix them. Sounds simple, right?
To be frank, system changes are easy. I figure out how a system should match a problem, write up a 20 page or so document on what needs to change, and hand it to IT to make it happen. IT does the hard parts of development: writing the code, testing, etc. The hardest part here is simply ensuring I have the budget and the IT resources understand the requirements.
Change is Hard
No, the real difficult part of my job is convincing people to change. I work at a well established company with many employees who have been in the same jobs for decades. I kid you not, I had one coworker who retired from her same role after 45 years. So, some employees have been working their processes for decades. Then I come around, and want to change it up to be more efficient. Often, but not always, I do not even have a low level understanding of their job. Yet judging by my performance reviews, feedback of others, track record, and my company rewards I am very successful at it. So how do I do so, and more importantly what does this have to do with personal finance?
Always Changing, Even Personal Finance
Life is a constant flow of change. The job market changes, income changes, marital status changes, dependents potentially arrive, health varies, and eventually we all get to the point where we stop working (or worse, leave this plane of existence). Yet humans are creatures of habit. In my work example, not a day goes by that I do not encounter someone with the mantra, “this is how we always do it”. Change is hard and most people prefer to stick to their existing world. The toughest part of my job is hauling them (hopefully not kicking and screaming) into the now. In the same way you as an individual must change your habits around finances, career, and investing. You must also convince those around you, like your spouse, to come along for the ride. This is also the hardest part of turning your finances around, how do you change yourself and others? So how do I do it?
How to Effect Change
Everything in my world starts with asking what is a person’s headaches and problems. What truly bugs them about their world? What would make their personal life better? Now, I do not just ask about the dislikes, I also ask about the likes. In the personal finance world you can do this with your spouse, or you can do it on your own, both are extremely valuable to what happens next.
Intrinsic Motivation is the Key to Change
Once you understand the things you value and the things you wish could be improve, focus on the changes that impact these areas. Focus on improving what you like and where possible eliminating what you don’t. Even if priorities mean you need to start somewhere else, focus your work in a way as to have some downstream impact on those areas. Then when it comes time to talk to the person who is most impacted, focus on those impacted areas. If this is a personal change then start any thought process in the same way. Focus on the impacted areas that you care about. The key to getting a change to stick is Intrinsic motivation. That is, changes will only succeed if you are motivated from within. In my job it does not matter how many times you threaten to escalate to someone’s manager if they do not change or offer them a bonus if they do (extrinsic motivation), if they do not see the value to them of the change it will fail. In the same way if you’re trying to change your behavior of you or your spouse then you must speak to that intrinsic motivation. No amount of reward if you meet your plan goal will keep you on the path if it is not tackling something you value.
Intrinsic Motivation in Personal Finance
So I’ve spent a lot of this post relating to my current job, but let’s end with a personal finance example. I’ve written in the past of the impact living off one income has had on our finances. I did not set that goal arbitrarily, and tell myself I’d buy myself dinner if I made it. It was not even set because of some desire to retire. I do not want to retire anytime soon. So, if I set a goal based on retirement I would have failed. No, my intrinsic motivation was fear.
I remembered how money was tight for my parents as a kid. I looked around myself in 2008 and saw other families going into bankruptcy and losing their home due to loss of income. It was scary. I focused on eliminating that fear as my intrinsic motivation. Not being worried about losing one income driving us to be homeless led to us controlling our finances. It was not some drive to be financially independent.
Do you have a major change you are considering? What intrinsic motivation will drive you to change?