Hi, I'm Kevin. I write a free newsletter about money for 904 other Millennial parents. We talk about how to turn your money into memories.
Last summer, Eater staff member Terri Ciccone and her fiancé decided to plan a dream vacation to the Amalfi Coast. At least, that was the initial goal.
But the Amalfi Coast contains 13 different mountainside towns. And for each town, you can find beautiful photos, charming descriptions, and mouthwatering restaurant reviews. So Ciccone got stuck. She just couldn’t figure out how to proceed.
During her research, though, she learned about nuns in the small Amalfi Coast town of Conca dei Marini. In the 1600s, they invented a thin, shell-shaped pastry known as sfogliatella. Growing up, Ciccone’s family loved sfogliatella.
So she decided to plan her trip around the pastry’s birthplace. They would eat sfogliatella in Conca dei Marini. Then, they would allow the trip to unfold from there, and “let everything else along the way surprise and delight [them].”
Vacation planning can get overwhelming pretty quickly. Especially when we view the trip as a potential once-in-a-lifetime opportunity.
We envision every detail going perfectly. No rain, no travel delays, no large crowds. And for our part, we try to make choices that support these outcomes. We aim to minimize our future regret, seeking out the most memorable local neighborhoods, foods, and experiences.
Yet, this approach can backfire. In pursuing an “ideal” trip, we’re often inviting the exact feelings that we wish to avoid. In discussing his book Anatomy of a Breakthrough, Adam Alter notes:
“Perfectionism…is almost always the wrong goal for most people. Maybe you should strive for near-perfection when you’re picking a life partner or deciding where to live. But most of the time a good-enough solution is fine. The problem with perfectionism is that it raises the good-enough threshold to unreasonable levels.”
And then, we quickly feel stuck.
Our personal finances often feel overwhelming for similar reasons.
We may set an ambitious goal, such as retiring at a specific age or paying for the full cost of a child’s college tuition. But then, we quickly feel stuck. Which investment decisions will we not regret making? And how should we balance making memories today with saving money for much longer-term uses?
When we put together a financial plan to address these questions, we envision every detail going perfectly. Yet, perfection in personal finance isn’t attainable. Not when we have so little control over so many variables, everything from interest rates to investment returns.
With money, most of the time, a good-enough solution is fine.
Tamara Shopsin, a graphic designer, wrote a memoir in 2017 entitled Arbitrary Stupid Goal. The phrase comes from her father, Kenny, a renowned New York City restaurant owner.
Kenny Shopsin once explained, in a 2005 documentary, “The way that I choose to function is to pick an arbitrary stupid goal, become totally involved with it, and pursue it with vigor. And what happens to you in that pursuit is your life.” A Vogue article about the memoir added, “The goal might be stupid, in other words, but pursuing it is not.”
Arbitrary stupid goals seem consistent with the conclusions that Alter draws in Anatomy of a Breakthrough. For example, imagine that you’re a runner who feels stuck at your current pace. Alter explains:
“…Goals are self-defeating because you exist in a failure state (e.g., you’re not running as fast as you’d like) until you succeed. But success is anticlimactic and so you just create a more ambitious goal to replace the first one. Using a systems approach — like telling yourself ‘my system is to move with 300 meters to go’ — works regardless of how fast you run, and so it delivers benefits for a much longer period of time, even as you improve.”
The financial goals that we set for ourselves often become self-defeating, too.
Let’s say you’re trying to balance a good quality of life today with a financially secure retirement. And you decide that you eventually want to save $1.5 million for your older self.
Until you hit that number, you “exist in a failure state.” But actually hitting that number typically feels anti-climactic. So you convince yourself that working and saving a little bit longer makes sense. Now, you conclude that $2 million is a more appropriate objective.
In other words, your goalposts constantly move. And you constantly feel like you’re running in place.
But an arbitrary stupid goal, or a “systems approach” in Alter’s phrasing, delivers more immediate, and enduring, benefits. What if you told yourself that every time you made an expensive purchase to support your quality of life, you would contribute an equal amount in an investment account? It’s arbitrary. And it feels a little stupid, at least as a means of building a retirement fund. But if you pursue it with vigor, you’ll avoid the most common problem — getting stuck.
You can spend money now to improve your life and also save money for the future. As Alter says:
“In the West…we tend to find these apparent inconsistencies paralyzing. How do I resolve the idea that I should both live in the moment and optimize for the long-run? People in [Eastern countries] tend to be more comfortable holding two apparently contradictory ideas in their heads at the same time — known as dialectical thinking.
It’s much easier to avoid being stuck if you don’t fetishize perfection, and if you’re capable of saying: ‘These two paths forward have pros and cons; neither checks all the boxes, but I’ll choose the one that seems best when I balance immediate and longer-term considerations.’”
Terri Ciccone’s “arbitrary stupid goal” — tasting a pastry in the town where nuns first baked it — may strike many people as, indeed, fairly stupid. Yet, Ciccone writes, without setting that goal, she and her fiance never would have experienced “the simple pleasure of flaking dough all over ourselves while overlooking the quaint lemon trees, the steep mountainside, and the peaceful sea.”
They were relaxed and content, knowing that they didn’t need to chase a “perfect” version of an Amalfi Coast trip. Likewise, when we choose “good enough” for our finances, we create a similar opportunity. An opportunity for everything else along the way in our financial journeys to surprise and delight us.
Hi, I’m Kevin. I’m a financial advisor in Washington, DC. I’m also the founder of Illumint, an independent financial planning company in the District that specializes in financial planning for Millennials like you. I empower our generation with the confidence to invest an inheritance, financial gift, or extra savings. If you’re new to Financially Well, welcome – you now have access to the leading finance podcast for Millennials. I encourage you to read, watch, or listen to the ideas I’ve shared about making your money work for you. And then when you’re ready, please send me your thoughts & questions!
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