Written by Trent Hamm, The Simple Dollar is a popular personal finance blog that chronicle's one man's road back from overwhelming debt to financial security. Hamm declared the contents of the blog to be in the Public Domain in 2008 and available for sharing when attributed properly. We will share a couple of posts a week.
My biggest dreaded personal finance task is filing papers. I absolutely loathe it.
For starters, it’s a never-ending task. There are seemingly always more papers that need to be saved somewhere.
If I happen to get behind a little bit, the pile of papers that need to be filed becomes a small mountain. I just want to shove that big pile in a filing cabinet somewhere and just forget about them… which sounds great until you actually need a particular paper, then you’re spending hours digging through reams of documents trying to find one item.
I simply don’t enjoy it. If I can find an easy excuse, I put it off, and then I regret doing so because the pile of papers gets overwhelming.
I’ve really only found one way that makes all of this work for me. I break it down into tiny, tiny tasks and just do one task a day.
In the case of filing, that means I just take, say, ten documents off of the stack of things that I should file and deal with them right now. After that, I’m completely okay with walking away from the task for the rest of the day.
All I have to do is invest a few minutes in filing ten papers. That’s it.
Handling filing that way works really well for me for several reasons.
One, it’s much easier to talk myself into a little five minute task than to think about filing a couple hundred pieces of paper. The thought of tacking a big pile of documents makes me want to run the other way, but tackling just a few? I might grumble, but I can usually talk myself into doing it.
Two, as soon as I start, I almost immediately have the warm sense of a task that’s almost complete. I don’t look at the pile that I have yet to file today with a miserable look on my face. Instead, I think about just a few papers that I have to file and I don’t feel bad. “I have just a few left to do, then I can go do something enjoyable!”
Three, when I get started, I’ll often grab another handful of papers and file them, too. After I get the ten or so papers filed that I’ve promised myself that I’ll file today, it is really easy to convince myself to just grab a few more and file them, too. I might even do that a few times, turning my quota of ten papers to file into twenty-five or thirty papers put in their place.
Finally, I am filled with a constant sense of forward progress. As long as I take care of just a few pieces of paper a day, I never feel like the project is stagnating. After all, I made some forward progress on my “to-be-filed” stack today and the stack is obviously smaller than it was a few days ago.
This is a spectacular approach to use if you’ve got a big pile of papers that you know you should file but you’ve never actually made the leap. I highly recommend setting up an electronic filing system with a scanner (the Fujitsu ScanSnap is great for this) and then simply resolving to do a number of pages each day. Set the number nice and low so that it doesn’t feel like an overwhelming burden and set things up so that it’s convenient to do the task each day (perhaps with a big pile of documents near the scanner and a shredder nearby).
The approach of making a big task small works for a lot of financial tasks. For example, you might want to look at all of the retirement options offered by your 401(k), but looking at all of them seems overwhelming. Just look at one a day instead.
You might want to do an in-depth review of all of your bank and credit card and utility statements over the last six months, but it sure seems like a lot of work. Just review one a day instead.
You might want to compare a number of investment houses when considering your Roth IRA options, but there are just so many houses and investment options. Focus on one investment house per week and look at one investment per day instead.There are just a few principles that you should follow to make this work.
First, set things up so it’s easy to jump in and out of the ongoing task. As I mentioned above, you can set up a “scanning station” with a pile of papers nearby and a shredder close by as well. For examining your options with investments, you can set up a document with a standard system for the notes you want to take on each investment option, like the investment house, the investment, the expense ratio, the average annual return, and so on.
Second, make it part of your daily routine. Taking the next step on this ongoing task is just something you do each day. It’s a normal part of your day – a habit. Things like these are why I use a to-do list to keep track of the things I need to get done, because I’ll just add “file a few papers” or “look at an investment” to my to-do list. If an item just takes a few minutes, it’s easy to just do it, check it off, and keep moving.
Finally, take real pride in getting the job done. Whenever you face down a giant task and then manage to finish it off, even if it takes a while, that’s something you should take pride in. I typically don’t “reward” myself for such success because the feeling of success is so sweet by itself. I have no shame in feeling good about finishing up a big dreaded task.
If you’re dreading a big personal finance task – or any other big task – break it down into little bits. It’s much easier to dig in when you know you only have a little bit on your plate.