It's so easy to get caught up in big monthly income numbers or aggressive debt reduction. But, really, we should start by looking at financial progress — and celebrating our money mediocrity.
My money journey is one of startling mediocrity.
I didn't pay off an astounding amount of debt in a short time. My income's never been super amazing. Money mediocrity is the name of my game. Rather than a stunning transformation, I simply have boring incremental financial progress.
Now, I've got nothing against those with cool stories, discipline, and huge money successes. However, I do think that many of us do ourselves a disservice by feeling that we're doing it wrong if we can't be debt free this year or crush those monthly income goals.
Rather than obsessing how you're not where you want to be just yet, take a step back and look at how far you've come. Celebrate your financial progress.
Money Mediocrity — Anyone Can Do It!
I read a lot of “financial porn” in my line of work. The idea that anyone can just save 70% of their income for 10 years and be financially free. Just make a plan and pay off $100K of student debt in 18 months.
For those who can make it work, however they do it — help from parents, high-paying job, extreme frugality, discipline, whatever — kudos. But not everyone has access to the same resources.
Money mediocrity is something many people can do. Not everyone. There are limits. I've had plenty of privilege as I've moved through my own journey of financial progress. But money mediocrity is something that is probably more attainable for more people than flashy stories of ordinary folks accomplishing extraordinary financial feats.
In my life, some of the very mediocre things I've done include:
- Getting a payday loan (luckily, not rolled over)
- Carrying credit card debt
- Screwing up a debt consolidation
- Starting out only investing $50 per month in a retirement account
- Asking my parents for quick money — even in my 30s
- Not paying off my student loans early (still got 'em, BTW)
- Buying a new car with a — gasp — loan
- Being grateful for tips at the end of a shift as a waitress
- “Floating” a check (back when you could that)
- Relying on a personal line of credit to smooth my variable income
- Counting literal pennies to pay for groceries
I mean, I had a full-tuition scholarship in college and a cushy RA job that came with free housing and a stipend and I still took the max allowed in student loans and graduated with more than $3,000 in credit card debt.
See? Even my money issues are rather anti-climactic and boring.
But I didn't “fix” my rather mediocre money problems in a dramatic fashion. Instead, I learned how to better manage my money and make financial progress in small ways.
Small Steps Toward Financial Progress
Most of my actual financial progress resulted from a few key factors:
- A degree I figured out how to leverage
- Increasing income
- Time to work on increasing my income
- Understanding my values and using them to set financial priorities
But those things aren't universally available to others in the same fashion they were to me. What I have found, though, is that taking small steps can be effective over time — especially if they're accompanied by a shift in how you think about money.
One of the things that worked best for me was to really take a look at how I was spending my money. Did I care about the things I spent money on? No? Then why were they expenses?
I didn't make a new budget that trimmed out all the fat. I started thinking about my income as a resource — a resource I could direct. Then I decided what things I wanted those resources to accomplish.
At first, it was paying down credit card debt and starting to save for retirement.
However, I didn't put a ton toward credit card debt. In fact, my approach to debt reduction was more like a debt siege than a debt snowball. It sure as hell wasn't a debt avalanche. And the idea of debt snowflaking just made me tired and sad. But I began paying down the debt. That was progress.
I also started putting $50 aside in a Roth IRA each month. Was that enough to retire on? Nope. But it was something. It was financial progress toward a goal that I knew would enrich my life later.
These small steps aren't dramatic or immediately life-changing. But they represent positive action. We can't all have amazing stories of financial victory. For many of us, it's really just about making financial progress as we overcome our rather mundane money mess-ups.
No matter where you're at in your financial journal, any positive action should be recognized and celebrated.
Build on Your Financial Progress
When you start making financial progress, pay attention. Look for what you're doing right, and find ways to do more of that. Even if it takes you longer than you'd like.
Did I spend more time (and make more interest payments) than I needed to when paying off my credit cards? Sure did. Part of that was the fact that sometimes the credit card debt would be almost paid off and then something like a cross-country move to attend grad school would intrude. Or we'd do something like buy a house, depleting savings with the modest down payment and using credit cards to make purchases for a few months.
But here's the thing. Each time I did something of middling stupidity with my money, I learned from it. I did better next time. The last time I carried a credit card balance, it was paid off much faster than the first time.
As I made more money, I put more into investment accounts. Will I ever max out every retirement account I'm eligible to have? Nope. But I'm now to the point where I set aside enough each month that I can meet my various goals. So there's no reason for me to try to get an I-maxed-out-all-my-retirement-accounts badge.
Building on financial progress isn't about going in a straight line. I've done my fair share of backsliding. Even now, I sometimes do stuff with my money that's inconsistent with my values and priorities. But I do it much less. And when I do screw up, the fact that I have years of financial progress behind me means the consequences are smaller than they used to be.
Sometimes Financial Progress is About Survival
Not everyone gets extra choices and do-overs. And sometimes financial progress is just about getting to the end of the week. Sometimes it's about survival.
Finger-wagging at people and telling them what they should have done doesn't actually help anything. Yes, we can look at the situation and say, “I wish I'd done things differently.”
But the fact of the matter is that, while we can learn from the past, we can't fix what's already over. We can only look forward and figure out if there's a way to make progress so that the consequences aren't quite so dire next time.
Trying to do what's “right” in the middle of a crisis has its own challenges. Maybe you have to scale back how much you're contributing to your 401(k). And maybe you don't have an option because you've just been laid off and you can't make any more contributions to your 401(k).
Perhaps you don't have six months' worth of expenses saved up for emergencies right now. But you do have a months' worth, and that, combined with enhanced unemployment benefits (if you can get them) and some temporary assistance from the food bank means that you put $2,000 on the credit cards in the next two months instead of $5,000.
It still sucks. But it's progress.
In the end, you have to look at where you are now. Congratulate yourself for making some progress (or at least recognize that past you would have been in a worse position), and then decide how to proceed from here.