“No one has ever achieved anything from the smallest to the greatest unless the dream was dreamed first.”

— Laura Ingalls Wilder

A new month means a new thirty-day trial. Since this month is the start of a new year, I wanted to make the trial especially meaningful; just like doing something productive the first thing in the morning sets the tone for the rest of the day, so does doing a highly-valuable trial the very first month motivate you even more during the rest of the year.

Having identified a personal development theme for this year, I decided that I’ll start the month by experimenting with neuro-linguistic programming, aka NLP:

The basic premise of NLP is that the words we use reflect an inner, subconscious perception of our problems. If these words and perceptions are inaccurate, as long as we continue to use them and to think of them, the underlying problem will persist. In other words, our attitudes are, in a sense, a self-fulfilling prophecy.

Holistic Online

NLP is a way to fix our problems, achieve what we want, and change our lives by changing the way we think.

Suppose a project is behind schedule. If you had to choose between two people of equal skill, but one of them approaches everything positively while the other, negatively, who would you choose? Why?

Attitude is one of the most important conditions of achieving success. A positive attitude focuses the mind in the right direction. It goes without saying that you’ll reach your goals faster, but a far more important thing to consider is that you’ll enjoy the journey to success more.

The 30-Day Trial

Or, to be more precise, a 26-day trial, since we’re already on the 6th. Of all my financial goals, the one that I’m most stressed about is the “side income” one. Therefore, that’s the goal that I’m going to use as a guinea pig for my first NLP experimentation.

For the remainder of January, I’m going to start every day by spending half an hour picturing myself succeeding wildly, beyond my dreams and expectations, with this goal to music that I find invigorating. By associating strong, positive emotions with the goal, I will be strengthening my desire to achieve the goal. Because I’m consciously spending time every day seeing myself succeed, I will be pushing myself out of an “I suck” attitude to a “can do anything” mindset.

What about you? How are you going to use NLP to achieve your goals?

When you love doing something, well, you do it, no hacking/whacking required. Suppose you love writing and hate shopping (one can wish); what are you more likely to procrastinate on? The writing or the shopping? When you do what you love, it doesn’t feel like work; instead, it’s like you’re playing 100% of the time.

While not all of us are fortunate enough to get to do what we like (and many a time it’s our own fault; nobody is forcing us to do the work at gunpoint), it still makes sense to find opportunities that will let us do what we like and shy away from those that may turn us into stress monkeys.

I instead decided to invest my side income for various big purchases I anticipate having to make over the next 10 years. Some of them are fun-related (such as a vacation to wherever) while others are huge expenses that I am certain to incur (for example, downpayment on a home I will buy with my husband).

As I was working on my long-term plan, I came across this article at Get Rich Slowly on purpose-driven investment:

Traditionally, most people invested for various vague goals and lumped all of their savings together in a single investment account. That’s pretty boring. It’s not very inspiring or effective.

Purpose-Driven Investing satisfies our need for a purpose and our need for instant gratification by thinking of each of our goals as a separate “basket”. Each of our baskets represents a single goal with a clear purpose that we can see and grow.

What does this mean in the real world? It means that we have a single investment account for every goal. For example, if one of your goals is to take the family on a European vacation, create a separate savings account called “Family European Vacation Fund”. This account or basket contains all of your savings toward that one goal. Every penny in the account is for the European vacation — not for retirement, a new car, your emergency fund, your kids’ college tuition, or any other goal. What was once just a plain investment account is now a dream — a real goal you are committed to achieving. Account statements have been transformed from boring pieces of paper into exciting treasure maps!

(Quoted from The Six Day Financial Makeover by Robert Pagliarini)

Purpose-driven investment is making a conscious decision on where to spend your money. That’s right — the decision isn’t so much on how much to save as it’s on where to spend the savings.

In the end, you and I aren’t pinching pennies and saving money to die with $15 million in the bank account. What’s the point if you have $5 million in retirement accounts but look back at the previous 60 years and end up regretting what you never did?

We save because we want to enjoy life to the fullest extent possible. This means being ruthless with unwanted expenditures and lavish with ones that we want. The reason we save is so that we don’t go into debt and stress out about the payments.

Whatever investment you make should have purpose behind it: investments into 401K and IRAs are to let you live comfortably in retirement while the purpose of your emergency fund is to save you in case of emergenices. Simiarly, every other investment should also have a purpose attached to it. Is it for a downpayment? Is it for college? Is it for a vacation? What?

Having finished mapping out where exactly each of the $24,000 will go (yes, this unfortunately includes taxes), I’m 300% more motivated to accomplish this goal than I was just three hours ago.

One of the main causes of procrastination is feeling overwhelmed at how much work needs to be done to complete a task. It’s often the case that the “tasks” on our todo list aren’t really tasks but rather mini projects. For example, a task that I have been procrastinating on for weeks now is the mailing of some form to my HR department. It’s been on my todo list since at least the middle of November, but it’s just not getting done.

You might think that this is a simple task (how hard can it be to mail a form?), but (since I mentioned it here) it’s actually a mini-project with many steps:

1. I have to take the form from home to work
2. I have to make a copy so that I have a copy at home
3. I have to locate large enough regular envelopes
4. I have to figure out remember who to send it to
5. I have to figure out how to send inter-departmental mail
6. I have to actually send the mail
7. I have to email said receiver with confirmation that I sent it

As you can see, this isn’t a task that can be done in a single step. Procrastination usually happens with these “tasks” for a couple of different reasons:

1. You don’t want to do one of the steps, so you procrastinate on the whole task.
2. You don’t know everything you have to do, so you feel overwhelmed.
3. You allotted insufficient time for all the steps, because of number two and realize that subconsciously.

By breaking down multi-step tasks into single steps, it becomes very easy to start working on it. In my case, it feels intimidating to “mail the form,” but mindlessly easy to “take form from home to work.” “Write a report” is hard; “brainstorm 10 ideas on immunomodulatory symbiotic bacteria” is easier.

By always knowing what your next action is, you make it easy on yourself to keep going.

Procrastination Hack #2: Commit to work on a task for just 10 minutes.

The concept behind this task is same as the one behind 30-day trials. No matter how ingrained any habit is, most people are able to commit to a change for just 30 days. Similarly, no matter how unpleasant a task is, most people will be able to work on it for 10 minutes without too much trouble.

By committing to work on a task for just 10 minutes, you are pushing yourself out of the procrastination zone into the productivity zone. As everyone knows, once you start a task, it gets easier to keep going. You might know that a task will take an hour, but you don’t have to commit for the entire hour. By breaking it down into six 10-minute chunks and giving yourself permission to stop every 10 minutes, you make it easy for your brain to decide on starting.

There may be some tasks where getting started is not enough to keep going. If you really, really hate the task, you might find it hard to commit to the task for even 10 minutes, because you know the ultimate goal is to keep going for an hour or however long it takes to get meaningful work done. In this case, you might want to force yourself to stop after 10 minutes the first however many times it takes for you to get comfortable with the 10 Minute technique.

Procrastination Hack #1: Do the most important thing first.

Wouldn’t it be great if the most important thing you had to do was the task that you like the most? There are people in this world for who this holds true, but for the rest of us, it is often the case that whatever is most important also ranks pretty high (if not the highest) on our loathing scale.

Why do the most important task first thing?

1. Your motivation is likely going to be the highest in the morning. Are you likely to NOT procrastinate on a task you do at 8AM or at 3PM?

2. You got one of the ugly tasks out of your todo list right away, meaning you like all/more of the tasks that you have remaining, meaning you’re more likely to finish all of them.

3. What you do first sets the tone for the rest of the day. If you get your loathed task out of the way right away you will feel good about yourself, which increases your motivation, which will make it easier to do your next most hated task, etc.

4. Whatever happens over the rest of the day, the most important task you had to do got done.

Emergency Fund

The last couple of months of 2008 brought my emergency fund to its knees — I don’t even have one month of reserves anymore. I’m going to bring the balance up to $10,000.

Retirement

I’m going to fully-fund my traditional 401K ($16,500) and my Roth IRA account ($5,000). I’m also going to fund as much of a SEP IRA as possible.

Investment

I want to invest about $3,000 into ESPP. It would be nice if I could invest more, but that might not be possible in light of my other goals — unless I meet “side income” goal, in which case this I will be able to take full advantage of ESPP.

Debt

I have $7,370 on a 0% APR card that signifies the only “student loans” I’ve used to finance my MBA. I want to get rid of the debt in six months.

Sanity

To ensure my sanity (now that I have so many different bills to pay), I’m going to setup automatic payments for all recurring expenses.

Side Income

Goal is to earn $24,000 in income from side jobs. Every penny of this money will go to either a SEP IRA account or an index fund.

529 Plans

My goal is to dedicate at least $1,200 to three plans (total). If possible, I want to fund one of them with another $2,400.

Charity

My company matches the first X amount of money I donate to a non-profit org. So my goal is to donate at least that much to charity by year-end. If side income goal is met, I want to donate at least double the minimum.

Fun

I will spend $600 on fun experiences; this means that the $600 cannot become a recurring bill, cannot be used to purchase tangible products, cannot be used for food/restaurant/grocery purchases, and cannot be used for purchase of gifts.

Net Worth

I ended 2008 with a net worth of $40,000. After doing some proof-of-concept calculations, I think an attainable net worth goal is $115,000 $85,000. This is almost three times more than twice my net worth in 2008, and it partly depends on what I manage to earn and save in side income, but even without it, I should be able to come in quite close. (Screwed up with the calculations)

Expectations

Of all the goals I have set out for 2009, the side income goal is going to be the hardest. I’m afraid that I’ll fail miserably at this goal, which is probably not a very good way of going into it. I’m determined to make it, however, so we’ll so how it goes.

So, what are your goals for 2009?

Highlights

1. Most of the decrease in emergency fund got redirected to Roth IRA (some of the transfer is still in a holding account — look at the “Others”).

2. Most of the increase in 401K (which accounted for 91 percent of my net worth increase, by the way) comes from contributions. The contribution for November got put in a little later because of Thanksgiving. I had forgotten about this, and so spent three hours trying to account for the increase.

3. I got around $240 refunded from my escrow account, because they found out that they’ve been holding too much money. It pretty much went into Roth IRA.

4. I invested $100 into a DRIP and promptly lost $11 to fees. :-(

5. I also opened another 529 plan this month, though I don’t know if I’ll be able to save into it regularly.

Wasterneting: wasting time by browsing the Internet.

Stopping this bad habit feels impossible, but it doesn’t have to be. If you’re on the quest to become an ex-wasterneter, then here are some tips:

1. Figure out where you’re spending most of your time. “Browsing the internet” is a rather ephemeral concept and therefore difficult to fix. The first step to identify where exactly you’re spending your time. What sites do you frequent? What blogs do you read and re-read? What forums are you addicted to? My time-wasters are (1) personal finance blogs, (2) programming sites, and (3) Google Finance.

2. When do you turn to the Internet? Most of us aren’t on the Internet 24/7 (though it feels that way sometimes). Being a veteran Wasterneter myself, I can guarantee you have an event that triggers a relapse into time-wasting. I end up turning to the Internet in one of two cases: (1) I don’t want to do what I’m doing right now or (2) I’m stuck on a problem that I don’t care about and want to procrastinate on. To put it simply: bored = Internet. I bet it’s true for you, too. After all, if you’re engrossed in something you like, you aren’t going to be thinking, “Hey, maybe I should waste some time on the Internet.”

3. Identify a couple of replacements to Internet. There is a reason you go to the Internet. If you use it as a procrastination tool, like I do, then you need to figure out what you’re going to do (other than browse the Internet) when you want to procrastinate. Otherwise, you won’t get anywhere. Even if you manage to stop wasting time on the Internet, you’ll probably fill it with something equally bad.

4. Rank sites in order of addiction. You probably go to some sites a lot more than you do others. For example, there are two blogs whose archives I’ve gone through at least a dozen times in the last several months. These blogs are updated maybe once every couple of days, but I check them obsessively several times a day.

5. Take it one site at a time. Stopping all Internet activity might be too hard for many of us, but not going to one site is much easier to accomplish. Once you feel comfortable about the most addicting of your site, go on to the next one.

6. Do replacement activity whenever you feel like going to the sites that you stopped going to. This means, of course, that you should enjoy the replacement activity as much or more than you enjoy browsing site X. Otherwise, you probably won’t do it. At the very least, you should like the activity more than whatever activity it is that you’re trying to get out of.

7. See if you can’t delegate your ugly frog¹ of a task to somebody else. You have a task but you don’t like it, and that’s why you’re procrastinating. See if you can’t get someone else to do the task for you. Then you can procrastinate on some other task that you don’t want to do but have to do, but maybe you can foist it upon someone else, too…(Just to point out something: just because you don’t like something doesn’t mean that everyone doesn’t like it; I might hate shopping but there are definitely people who love it.)

8. If you can’t delegate, see if you have to do it at all. There are many tasks that don’t need to be done. You ignore them long enough, they will go away. If your task is like this, then don’t work on it. Simply move onto another task, hopefully something that you like. Cut out the part in the middle where you’re procrastinating.

9. If you have to do it, do it first thing. If you have a task you like and a task you don’t like, then commit to doing the task you don’t like the first thing every day. That way, whatever you have to do for the rest of the day is easier and therefore less likely to lead to procrastination.

Bonus Tip: Think in terms of years, not months. The more addicted you are to Internet, the more time it will take for you to get rid of it.

What about you? Do you have any other tips that helped you battle your Internet addiction?

1. Ugly frog is a term coined by Brian Tracy

1. Sometimes, no matter how much you push yourself, you simply cannot see a trial to its end. Don’t beat yourself up over it; it’s simply not worth getting frustrated over. Try again next month. In 2007, I think my failure rate was 90%. In fact, I failed the same trial 12 times (if you guessed that this was the “don’t eat out” trial, you are right). I became rather depressed last year, but what’s the point? If it were easy to change habits, you wouldn’t need all these tricks and tools, would you?

2. On the other hand, sometimes it feels like the stars align and the universe bends over backward to make sure that your trial is a success. This certainly felt like this when I finally managed to stop eating chocolate in January. This, by the way, is after several trials, some successful (during which I didn’t eat chocolate for 30 to 60 days) and some not so successful. I wish I could say how to bring about these perfect trials but I have no idea why, sometimes, everything just works.

3. It’s OK to attempt more than one trial at a time, but don’t attempt more than one hard trial at a time. I often try out two to three trials in any one month, but I give myself two easy ones and one hard one. For example, running for me is hard. I hate running with a passion but I keep wanting to become a runner (if you’re wondering why I do this to myself, it’s gotten me stumped, too). So I’m once again attempting to make running a habit this month. But as this is my hard trial, I’m not trying any other hard changes. Trying to make two hard habits at the same time is sure way to fail in both of them.

4. Make your trials public. If you can do only one thing to ensure that you succeed, this has to be it. Nobody likes failing in front of other people. When it’s only your motivation that you have to rely on, it’s rather likely that you will fail. Let’s face it: the habits you want to make or change are never easy. But you can dramatically increase your chance of success by telling other people that you are going to make something happen: I’ve succeeded in more trials in 2008 than in all the previous years combined.

5. Check-in regularly. I found out that the trial is much more likely to go smoothly if I check in with my progress every day. This is something I learned during my “Wake up at 4AM” trial. I’ve tried this trial a couple of times before, to some success but it was always a painful experience. But the last time, I was excited to wake up early because I couldn’t wait to toot my horn so as to speak.

6. Trials will get easier. Trust me on this one. The first trial is always the hardest, even if what you’re trying to change is not that hard. By the time you’re at your tenth trial, it becomes very easy to make yourself stick to to your new habit for at least the 30 days that you are on your trial, after which, of course, it typically becomes trivial to maintain the habit. This is true even when you’re trying to break habits that you are really unhappy about breaking (ex., eating out for lunch every day).

7. Don’t commit to more than 30 days when trying to make/break a habit, especially not when it comes to those hard-to-change ones like eating out less, not smoking, and exercising more often. If I had started my “don’t eat chocolate” trial thinking that I was not going to do it for the rest of the year, I would surely have failed. I love chocolate too much, and it was hard to fathom the misery of having to force myself to not eat chocolate every day. So I started by committing to it for just 30 days. It was still hard, but it was not so bad because there was a clear-cut end to my self-inflicted torture. Once I was done with 30 days, I extended the trial another month. It was much, much more peaceful; I hardly thought about it once. I haven’t had a single bite of chocolate since January, and I can’t say that I’ve thought about it at all over the past several months.

8. When trying to make a habit, do it every day. It’s hard to make a habit when you’re doing it only once or twice a week. It takes too much self-discipline and you can’t ever really make it a habit anyway. Even if you have to do it only once every week, do it every day. For example, if you want to clean your bathroom every week, do it every day anyway. You are far more likely to stick to it.

9. The people around you can make or break some trials. For example: eating out. I used to go out with my colleagues for lunch for the better part of 2007 and 2008. Everyone goes out a lot at my workplace; on any given day, at least three people used to ask me out for lunch, and this made it all that much harder to stick with my trial.

10. If people are pressuring you to quit the trial but you don’t want to share with them why you’re doing the trial, then simply make something up. The goal is to get people to stop blindsiding you. You don’t want to tell people that you don’t want to go out with them because you want to save money? Tell them that you’re trying to get healthier or that you’ve got work to do or that you don’t like the restaurant. Whatever. It’s easier when your excuse is more long-term (”I want to eat healthier,” you can use over and over again, but “I don’t like the restaurant,” not so much).

Bonus Tip: Don’t start a trial on January 1st — thanks to long years of failures with January 1st goals, most of us are probably conditioned to fail just because we started the trial on that date. Start on December 31 or January 2. ;-)

What about you? What tips do you have on 30 day trials?