Motivation and Personal Finance: Financial Goals and Success


  Motivation and Personal Finance: Financial Goals and Success

I want to talk about a topic that has been largely ignored in the personal finance blogosphere: motivation. I think it is vital for any aspiring personal finance blogger to frame their posts in terms of motivation, and what they can do to stay motivated.

Motivation is one of those topics that you have probably seen or used before. However, the things we have been taught about it may not actually be true. For example, I remember being told that motivation is important in everything you do. As a kid, I used to hate studying. However, if I thought about why I was studying - so that I could get into a good college - it seemed to motivate me more. It was much harder for me to put down my books when I started thinking about the future.

However, recent research has pushed back against this idea of motivation in the context of higher eduction. A 2011 study by researchers at the University of Kansas found that freshmen with a high level of intrinsic motivation (i.e., students who really enjoy their classes) actually got worse grades than freshmen with lower levels of intrinsic motivation (i.e. students with less enjoyment).
This study was later replicated in a follow-up study which found similar results. Specifically, students who enjoyed their classes tended to show a decrease in grades over the course of their first year of college. This result was more pronounced for students who had high levels of intrinsic motivation prior to beginning college.
The researchers suggest that "the very characteristics associated with intrinsic motivation may lead to lower grades and even dissatisfaction."
While there is an element of confirmation bias here (i.e., people tend to see what they want), this finding indicates that while motivation can be helpful, it can also make it harder to succeed academically (unless you have a high level of enjoyment).
This is a classic example of the fact that what works in one context may not work in another. We often think about motivation as a single characteristic that will improve our lives in all aspects, but this is not the case. Motivation works differently when it comes to different tasks or goals (like studying versus getting a job).
Finally, I want to emphasize the fact that motivation does not always help you succeed. Indeed, sometimes it can make things harder for you by clouding your judgment and preventing you from making the best decisions (this is true when it comes to money and investing). This makes motivation something which we need to manage carefully (as opposed to rely on blindly).
I should emphasize that the results of these studies are not totally applicable to the personal finance blogosphere. Unlike academia, people don't make a lot of money - or any money - based on their blogging. However, I think writers can be motivated in a similar way to college students. Blogging is something I enjoy and find interesting, and thinking about my future as a writer is something which motivates me to write better content.
However, just like the students who enjoyed their classes too much in their first year of college, there have been times when I've got so into my posts that I've worked myself into a corner on certain topics (e.g. taxes). Sometimes it is good to step back and take a break.
I have often heard the phrase "if you don't like what you are doing, do something else". I think this is particularly true for bloggers and writers. In our profession, we need to constantly challenge ourselves, or we will become complacent and stop developing.
For example, at one point in my blogging, I wrote a post about the tax implications of being a freelancer. I was interested in taking advantage of this new type of salary while minimizing my taxes at the same time (it seemed like a good idea at the time). This post was pretty popular among other bloggers but I quickly became discouraged by its reception by readers. After all, I was writing for myself - it didn't benefit anyone else. Worse, many readers were not even aware that I was a freelancer myself.
The fact that I did this blog post without any marketing or promotion also contributed to my lack of success with it. It is easy to get bored if you are constantly considering your own situation rather than other people's situations.
"But my readers really want to know about the tax implications of being a freelancer!" seems to be what kept me going on the idea of doing another essay on it. The longer I stayed invested in this topic, the harder it became to move on to something else (e.g., taxes and investing). Eventually I realized that I was writing more because of my own interest in the topic than because of what other people wanted to read.
This experience made me realize how important it is for bloggers to keep their readers in mind as they write posts. I know my audience, and writing posts I think will be popular is something that helps me succeed. If you don't have a strong sense of who you are writing for, you may find yourself investing too much time into a single topic or idea (like blogging about freelancing).
In closing, let me say one thing about motivation: never forget why you are doing what you're doing. The more motivated we are by external factors, the less likely we are to make good decisions (i.e., the more likely we are to lose money). In contrast, when we enjoy what we are doing and make decisions with our own interests in mind, we tend to act better.
Back to the top.
My total income was $47,000 in 2000. After paying off my student loans, I had a bit over $10,000 left to spend each year (the rest went to investing and saving).
One of my first moves after graduating college was to get a part-time job at a country club as a waitstaff member. I was making $7 an hour plus tips - pretty good for a part-time job at age 23.
Here are the pay stubs for the first half of that year:
Jan - $110
Feb - $228
Mar - $245
Apr - $129
May - $231
Jun - $228
Jul - $228
Aug - $128 (Which was actually a really good month. I made enough that month to pay off all my credit card debt and save up a decent amount for investing.)
Sep - $134 (This was actually the worst month of the year, as I lost an eye-popping 36% of my income.) I was also dealing with a chronic migraine in this month, which made getting up in the morning very difficult.

Conclusion: It was fun to have $100+ tips for 3-4 hours of work a week, but I realized that I didn't want to be in the service industry for the long haul.
My part-time job at the country club was dependent on tips, and there were more than a few months where the number of people who tipped me really dropped. At one point in 2001 I had some of my lowest earning months ever.
After a year at the country club, I decided to move on to another type of job in January 2002. I found a high-paying job as an assistant coordinator for a summer camp program (they paid $17 an hour plus overtime - not bad).

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