I never approach a sink of dirty dishes looking forward to tackling that chore. Food is cemented to serving plates, dinner from 2 nights ago is crusted on the frying pan, and I’m not sure if it’s the sink or the trash, but something stinks. Sound familiar?
Deacon Hayes recognized the similarities between dirty dishes and finances back in 2013 as mentioned on his blog, Well Kept Wallet. This comparison couldn’t be more spot on. To expand upon Mr. Hayes, comparison, I think there are at least 9 reasons why dirty dishes are like finances. Let’s take a look how.
1) No one looks forward to it
There aren’t many people who look forward to doing dirty dishes. Likewise, most don’t look forward to tackling their finances either. Unfortunately, both have to get done if you want to keep eating.
2) Avoiding them makes you anxious
Avoiding dishes or finances, won’t make them go away. I know when I avoid either for a prolonged period of time, I start to feel anxious about it. I’m a bit unsettled knowing there are chores to be done that I’m neglecting. It doesn’t allow me to relax and worse yet, when I’m spending time with loved ones my mind keeps drifting back to my to-do-list instead of enjoying the moment with them.
3) If you let them sit too long, it takes more effort
When you let your dirty dishes sit too long this otherwise simple task now takes a whole lot of effort on your part. Similarly, when we leave our finances untouched for too long an easy project just became a seemingly insurmountable task. Putting in a bit of effort upfront means substantially less effort will be required in the future to accomplish the same thing.
Working on creating your financial brick house one brick at a time over many months is a lot easier than trying to build that house in one day. I’d recommend creating a financial to-do-list and slowly checking off 1-2 items each week.
4) ...And more time
Not only is it more challenging to clean a mound of dirty dishes, it’s also more time-consuming. If I had just taken the 10 seconds to scrub my plate, I wouldn’t have to spend 10x that time trying to scrape the food that’s now adhered to the surface.
The same goes for finances. If you revisit your financial to-do-list regularly, it shouldn’t take much time at all. Neglect it and I can guarantee precious time will be wasted. This typically takes the form of decreased returns from your current investment portfolio which is likely sub-optimally managed. Ultimately this means more time at the office trying to reach your financial goals.
5) Scheduling a regular time to do them works best
I’ve found that scheduling a time to tackle both dishes and finance works best for me. Dishes are a chore that I do in the evening. Since there isn’t a whole lot of critical thinking that goes on, I save this chore for later in the day after my reserve of cognitive energy is fairly depleted.
Conversely, finances are a chore that I tackle early in the morning to ensure I’m energized and prepared for some detail-oriented analysis. Whether you revisit your finances once a week or once a month, it’s imperative that you schedule a regular time to ensure they get done.
6) Having the right tools in place helps improve efficiency
I like to make sure I have all the resources I need before tackling my dirty dishes. The soap dispenser and brush are locked and loaded. My dish gloves are out. The drying rack is in place. Good to go!
The same goes for my finances. I have my Mint account up to identify any inappropriate charges. My Personal Capital account is up so I can evaluate my progress toward my net worth goal. I access my checking account to ensure I have enough money to cover my bills, etc.
The key is, whatever resources you need, make sure you have them ready to go at that time. If you realize you don’t have the right tools to begin with, make sure you are putting a plan together for how you are going to acquire them.
7) You can pay someone to do it, but it will cost you
Now, I know what you’re thinking, “I can just hire someone to do my dirty dishes.” That’s right. You can. However, it’ll cost you. Similarly, hiring a financial advisor is also going to cost you as we discussed in an earlier post entitled "Your Financial Advisor Could be Costing you >300k."
In my opinion, the $60 cost of hiring someone to clean your entire house pales in comparison to the typical cost of a financial planner which is 1% of your ENTIRE portfolio. The more you learn, the more you’ll save, and likely the better your investment portfolio will perform.
8) Sometimes you need help
Now, sometimes your dirty dishes get so out of control that it is worth the money to call in help. Similarly, there are some instances where a financial planner could prove beneficial. However, I would only recommend paying them a flat consultation fee for their advice in an attempt to remove any incentive-based bias on their part. Try looking for a"fee-only" financial advisors if this is the route you wish to take.
9) They are not that difficult to do
Ultimately, dirty dishes and finances can be as easy or as difficult a chore as you make them out to be. Developing a plan, sticking to a schedule, making sure you have the right tools in place, calling in support when needed, and having a willingness to put in the work will determine your success with each.
How about you? What tips do you have for making sure your financial house is in order?