I remember the first time I ever worked with a client on paying down debt. She had two different credit cards whose debt she needed to pay down. One was large and had a higher interest rate. The other was much smaller and could be paid off within a year. Now mathematically, it might be smarter to pay off the larger debt first. But I knew better. I recommended she pay off the small debt first. “You need a small victory,” is what I told her.

The next time I saw her she told me that, for the most part, her summer had been a total disaster. She had had to work massive overtime and barely got to enjoy the sunshine. But there was one bright spot–that credit card she paid down. “Remember when you told me I needed a victory? Paying off that card was the one bright spot to my whole summer! When I paid off the card I didn’t cut it up. Instead I sealed it in an envelope and covered the envelope with glitter and crayon markings that said, ‘now do you really want to open this envelope again?”

I want you to remember that glitter. It will be important later on.


Our brains hate uncertainty. We suffer more when we think something bad is going to happen than we do when we know something bad will happen. When we know something bad will happen, we just adjust. So we need a way to create certainty in an uncertain world. We do that by winning small victories, and allowing those victories to build up into habits.

Those habits become our certainty.

Here is an example. Want to beat procrastination? Just pick up the scissors. What do I mean by that?

Here is the story. Once I bought a computer with a mail-in rebate. Now everyone knows, right, the deal with mail-in rebates? People don’t mail them in. That’s how companies make money off of them. So here I was, with my new computer, and I hadn’t mailed in my rebate.

So I’m talking with my assistant and telling her that I feel a little down on myself because here I am, a financial advisor, and I can’t seem to beat procrastination and mail in this rebate. It just felt a little hypocritical. She said to me, “You know how you have your Washington Association of Accountants bag that you take to work every day? Just put the rebate paperwork in the bag. Then, when you get to work, since you’re at work anyway, you’ll end up mailing in the rebate.” She was right. (She was usually right.) It worked. I threw all the stuff I had to mail into my bag that night, and the next day, at work, I mailed it all in.

Later on I learned an even simpler principle to beat procrastination. The next time I got a mail-in rebate, it was one of those where you had to cut a section out of the box and mail that in. So I just told myself that when I got home, I would just pick up the scissors. That’s it. Of course, once I picked up the scissors, I felt like I had to do something with them. And then, once I cut out the section of cardboard, I had to do something with that. And so on and so forth.

When I told these stories to another client once, she said, “I see! So in order to stop procrastinating about getting my finances in order, I need to stop telling myself that I’m going to devote an hour to the project. Instead, I will just tell myself I’m going to dump all my forms on the kitchen table.” Hey, if that’s what works.

Maybe I'll beat procrastination tomorrow
Maybe I’ll beat procrastination tomorrow.

The way I beat procrastination every day while working on this website is by just putting down in my calendar, first thing in the morning, “Open Spend Smart Live Rich.” That’s it. That’s all that’s required. As long as I open up this website, I have succeeded. I never, ever, ever, tell myself that I will spend three hours (or whatever) on the site.

See, what happens is that our brains don’t like letting go of things. So if we log onto facebook, our brains don’t like letting go of facebook. If we start watching a sitcom, our brains don’t like letting go of the sitcom. And if we just start working on a project, our brains don’t like letting go of that project.

The same way you beat procrastination is the same way you beat bad spending habits–with one important addition. The addition is this: celebrate your small victories.

In other words, actually celebrate just picking up the scissors.

Remember the glitter?

You need the glitter.


Each and every time you avoid foolish spending or manage to save a little bit, give yourself a verbal pat on the back. Actually celebrate it, out loud. These celebrations will, very slowly but very surely, change the story you tell about yourself. And that story that you tell about yourself will become who you really are. Here’s something every addict knows: it’s easier to be a non-smoker than it is to quit smoking.

Here’s another example that is often used. Just floss one tooth.

What? No really, just floss one tooth. If you want to improve how you take care of your teeth, just floss one tooth. Flossing all your teeth takes a lot of time and often hurts. But just flossing one is easy. And, seriously, after just flossing one tooth, celebrate. Congratulate yourself.

Want to eat healthier? You must have some sort of habitual thing you do every morning. Maybe you unplug your phone from its charger before you leave every day. Set healthy food by the charger. I’m not telling you that you have to eat it. That’s way too ambitious. I just want you to set it by the phone. And when you’ve done that, congratulate yourself.

Just picking up the scissors, just flossing one tooth, just putting something healthy in your daily habit changes you into a doer. It takes you, little by little, out of the realm of fantasy and into the realm of action. Habits, whether positive or negative, sneak up on you. Think about how facebook or smart phone video games work. Habits of any sort are a lot like addictions, so use the addiction principles facebook knows to your own advantage.

When it comes to your spending, figure out incredibly simple ways to avoid being in situations where you are tempted to waste money. Celebrate every single time you avoid those situations. Soon, you will be avoiding them by habit. If you are living paycheck to paycheck, just save some very small amount until the next pay check. Save 20 dollars. Celebrate it. That’s a victory.

Remember what all addicts know. You’re not even going to win this war one day at a time. You’re going to win it one moment at a time.

Also remember that everything needs a replacement. Here’s one of the reasons diets fail so often. We all seem to only have about 10 meals that we actually eat regularly, and we just rotate them. It does not work to “just remove” some kind of unhealthy food from our rotation. We must replace that unhealthy food with healthy food that we actually want to eat, and want to eat often. This is true with everything. You have to replace anything bad with something good, or else you will just go back to what you’re used to.

Form good habits! I believe in you!
Form good habits! I believe in you!

So it won’t work to “just stop” spending on things you don’t really need. You will still need those small hits of pleasure you get from spending. So what are you going to replace the spending with? For me, video games are pretty inexpensive. Or just outright free if they’re on my phone. That’s what I use to replace harmful spending (and some harmful eating, for that matter.) There has to be something that is just as inexpensive for you–exercise, seeing friends, youtube videos, meme appreciation, people watching, learning a new language, collecting pinterest stuff, I don’t know, whatever. But there’s something you can use to replace spending.

And the best thing to replace spending is probably something that, on some level, you’re a little bit embarrassed about. (Glitter maybe?) Go for that!

And on a deeper level, replace spending money with spending time and energy on what you really care about. Stop procrastinating. Face down those 10,000 year old fears about failure and embarrassment, and go after what you really want. Those old fears are what are keeping you in a consumer mind-set, and keeping you from a rich life.

Over and over again on this site you will see it repeated: Go after what you REALLY want. It’s some of the most important personal finance advice out there. Whatever it is that you really want is the only thing that, in the long run, will keep you from wasting money. So remember those stories about procrastination, and win some small victories on the road to achieving your real dreams.

Those small victories will end up as habits. They will change the story you tell about yourself. As you become a different person, the stress in your life will go down, making it easier to form good habits and make good decisions.

But forward progress is never completely steady. You will have moments of weakness and moments of total failure. Will-power still matters, because there is always the temptation to go backwards…

Class Exercises
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