75. Failure & Our Personal Finance Journeys

75. Failure & Our Personal Finance Journeys

75. Failure & Our Personal Finance Journeys

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Failure & Our Financial Journeys

Through my fifteen years of experience, I’ve learned that the ever-looming threat and experience of failure is one of the largest obstacles blocking people’s financial journeys. Our finances can carry some serious emotion weight and they are often viewed as being a measure as success.

Overall failure is like a giant perceived roadblock on the road that causes many people to pause or even stop our journey overall.

Learning how to overcome and embrace this fear of failure is an essential skill to better achieve our personal finance destinations and help with everyday life. This episode is not going to magically change your situation, but hopefully it can help point you in the right direction and tackle some of the myths that we may be judging ourselves to.

My Story About Failure

To kick off the episode, let’s start with a story – one that has personally affected me about even makes me feel uncomfortable talking about it now.

It’s about how much I sucked at French class when I was going to school. At the very beginning of my learning path, I had lots of passion and excelled in learning the language, but overtime I took this ability for granted and didn’t put in the practise required. Year by year, I became I fell behind in the and this failure created a lot of stress and unhappiness.

I came to avoid the subject and things just got worse.

This stress climaxed in grade 10 when my daily class schedule was Spanish and French in the morning, with English and Math in the afternoon. To make matters worse, the language courses had their tests and exams on the same day – needless to say it was a nightmare and that was my last year of French learning career.

Over the next 20 years, I always viewed this as a embarrassment and a deep failure. Something that I always regretted. It was one of those deeply held shames that you held close to you and didn’t share with others.

Fast forward last year and I just completed my CFP learning path. As a lifelong learner, I now had an educational gap to fill. So guess what I picked up again? That’s right, French! In avertedly this also turned out to be the perfect skill to learn during lockdown.

The process of learning this topic has taught me quite a bit about failure and overcoming it. As with learning a language, It’s a repetitious cycle of mistakes and eventually success  – only to come to another topic that starts the cycle again. The nature of quickly repeated failures and associated frustration got me thinking about what failure is and about how we can harness the process in a more productive way.

And since this is a personal finance podcast, I’m shifting the focus from French to finance!

Nature of Failure

To first understand the nature of failure, we first need to understand the learning process. In the famous book Mastery by George Leonard, he identifies how the learning process develops and ultimately how to gain mastery.

At the beginning of the learning process, it’s fairly easy and is exhilarating – just think about the joy of picking up a new skill and excelling at it.

The problem is that shortly after we pick up this new skill, it gets harder and we’re faced with an uphill learning process with frequent mistakes and failures. During this part of the process many people may stop and move onto another skill. We all know that person that jumps from skills to skills once the initial excitement of learning a skill passes.

If you keep going with the learning process you’re likely to hit a plateau that seems like there’s not much growth. However, during this period it’s likely that you are picking up supportive skills and developing habits that will eventually lead to another jump in skills with another plateau that follows.

This process doesn’t really have an end as all individuals that have mastered a skill are in a constant state of development and learning.

The whole process is fraught with bouts of failure and there are many points where we may leave the process.

The negative feelings from failure can range from a mild sense to upmost dread. Very often we connect these feelings of failure to our identity and can let it reduce our self-esteem. The worst case situation is that we will let it deeply wound us and cause us to quit our learning path.


How Does This Relate to Personal Finance?

Personal finance is no different than any other skill that is really challenging. There is a lot of subject depth and the more that you know, the more that you realize that you don’t know. To make things even more challenging, very often you will need to modify deep rooted habits and beliefs that have been active for years.

Very often our teachers – parents, blogs, etc. – may even be passing their educational errors to us.

Over my 15 years in personal finance, I see a similar process over and over when individuals are beginning their personal finance journey. It starts with an early process of learning that is very enjoyable and super empowering but once the process begins in real life, it can be very challenging and understandably, mistakes and failures will be made.

Personal finances are also perceived to be a meter of success as well and failures can easily be perceived as a direct failure as a person.

Once the initial learning process becomes for challenging and mistakes occasional occur, we come to a juncture where we see lots of people fall off of the process.

A prime example of this is during the budgeting process. Putting together the budget is really empowering but implementing the budget can be a massive challenge – especially if you are expecting to make drastic changes to your lifestyle.

We also observe this when people are implementing debt repayment strategies, investment plans, and more.

Overcoming Failure

So how do we navigate the stresses and failures that arise from our financial journey?

The first step is to really recognize that failure is part of the learning process and is inescapable for any complicated topic that we learn. Coming from over 15 years of experience, I can tell you that everyone makes mistakes and has failures when they start up their financial journey and how we respond to these pressures are very important.

You will make mistakes and it’s absolutely normal – everyone does. It’s not worth taking these mistakes and failures personal. Instead, be kind to yourself and treat yourself well. Convincing yourself that the issues that arise in the process are a fundamental error of whom you are is very toxic and wrong. We really need to separate those feelings from the process.

These mistakes and failures are actually lessons themselves if we give them a chance. They are really telling us what we did wrong and that we need another solution. There is friction accumulating somewhere and determining how to change that would better the situation.

These changes may also take many years to make as complicated structural habits are some of the hardest to change. This is absolutely normal.

It’s also important to note that mastery is not really a goal, but a continued process of growth. In learning about finance there really is no end – it’s true that we want to reach goals at certain ages, but there is always something else to learn or develop. Your financial knowledge is also susceptible to changes based on political and societal issues. I mean just look at all how COVID-19 has changed our financial behaviour.

If you can, learn how to love the challenge. The rough road can very often make achievements just that much more rewarding.

And a good approach before you begin your financial education path is to be realistic and keep things simple at first. Chipping away at certain issues can be much more effective than trying to do everything at one.

A great example of this when someone whats to change change their budget – which is usually means changing their spending habits. I find that individuals usually have better outcomes when they focus on modifying a couple areas of their budget instead of focusing on everything and burning out. The trick here is to focus of a couple expenses that provide you the most savings for the energy provided. Usually we know what these biggest expenses are and focusing the majority of our attention on these items can have very successful outcomes.

“You may encounter many defeats, but you must not be defeated. In fact, it may be necessary to encounter the defeats, so you know who you are, what you can rise from, how you can still come out of it”.

Maya Angelou

That’s it for today, but I would love to hear about any struggles that you may have overcome or are still experiencing.
  

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