Harnessing the Power of Time

As I imagined, this summer is fun and chaotic, every promise of summer delivered. I’m very certain that the busy-ness is not unique to me. It’s just a small reflection of our modern society. We all have a packed schedule with more to-dos than we have time for.

Is this a scene from your own life too? Deep in the daily hustle, it's easy to sideline important tasks that are not immediately pressing. Personal finance and financial planning often fall into this category.

To combat this, I propose a strategy for busy young families: harnessing time's power through micro-actions.

The Journey Begins With a Single Step

Taking the first step on a long journey can be daunting, especially when the destination seems so far away. However, as a Chinese proverb goes, "The journey of a thousand miles begins with a single step." Your journey to financial independence often begins with a single micro-action.

Micro-actions are small, manageable steps that require little time but deliver significant returns over time. It's the story of the tortoise and the hare, really - slow and steady wins the race. Opt for actions you can actually sustain day in and day out, and time will become your staunchest ally.

The Magic of Compounding: Cooking Up Financial Success

Think about your slow cooker. You add the ingredients, set the time, and walk away. When you return, you find a dish rich with flavors, the result of the individual ingredients make their own symphony over time. The same principal can also apply to your finances.

Consider automatic investing (the micro-action) and compounding (the power of time). You set up automatic investing once, and a predetermined amount is automatically transferred from your checking account to your savings or investment account every month. It's just like adding ingredients to the slow cooker.

Here's how the numbers roll. Say, you commit to investing $100 every month. Let’s assume an average of 7% of annual investment return.* In that case, your end balance would be roughly $17,000 after 10 years. It might not feel like a huge deal to have $100 sock away every month but it will slowly accumulate to something that you’ll feel an impact of.

Money Habits: The Road to Long-term Wealth

Like compounding, good money habits yield a snowball effect.

Consider the habit of tracking expenses. Taking a few minutes each day, week or month to track your expenses can give you a great amount of clarity on where your money goes. From there, you can compare where your money flows to your top values. Then, you can work on aligning them to get the most fulfillment from your hard-earned dollars.

An Even Greater Benefit of Micro-Actions: The Power of Consistency and Habits

Once you start to feel comfortable and have a specific routine for your micro-actions that’s fully integrated into your schedule. Your micro-actions will in turn become habits. Once an action becomes a habit, it's automatic demands far less willpower to continue. In other words, you wouldn’t even feel like you’re doing something hard anymore. Then, it frees your mental compacity to focus on the things that you want to work out next.

And the virtuous cycle begins.

Parting Thoughts

These strategies may lack the excitement of grand promises like "losing 20 pounds in a week!!", but effective solutions are often simple and grounded. So, embrace the power of time, patiently working to transform your financial future. Your journey towards financial security starts today, one micro-action at a time.