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Your Obsession With Being Perfect Could Cost You Six Figures

Kelley C. Long
Aug 6, 2019 · 6 min read

As a recovering perfectionist, I feel slightly hypocritical even writing about this — perhaps I should title the post “How I’d Be Wealthier If I’d Gotten Over Perfectionism Sooner,” but either way, I need to call out something I’ve noticed more and more in my conversations with friends and clients. There’s an obsession with perfect that is getting in the way of a lot of things (read Brene Brown’s Gifts of Imperfection if you really want to get into it), but when it comes to money, it’s costing real dollars.

I’m certainly guilty of responding, “Perfect!” to suggestions, plans, ideas, etc. as a way to actually mean, “Yes, that works,” and I’ve started to wonder if even just tossing the word around so casually is one of the reasons there is so much angst and anxiety in the world today, particularly among women. We say it all the time. Friend: “Meet you at the wine bar first, then sushi?” Me: “Perfect!” (Well, I guess that does sound kind of like a perfect night, but you know what I mean)

Perfect as a goal

When it comes to your financial outlook, getting it perfect in the short term could actually lead to missed opportunities in the long-term. The worst part is that you probably won’t even know if you got it “wrong” until it’s too late. Here’s what I mean.

What is “right?”

Investing

It may feel better because you never had that pain of “loss,” but you’ll never actually know what you lost out on in missed opportunity. In fact, investing too conservatively over a 30 year career could literally cost you a half million or more.

When it comes to investing, there is no perfect, but generally speaking, the longer your time horizon, the more chance that taking risk will pay off. When the market drops, think of it as a buying opportunity — the cheaper you buy into your 401(k) and other investments, the better the long-term outcome. Even investing on the worst day in the market (aka going all-in the day the market peaks before an extended down period) leads to a better outcome than not investing at all — don’t wait.

Credit score

Nest egg

We can get to a point where we’re so used to putting cash in a savings account that we may be missing out on other opportunities for that money, whether it’s using it to increase HSA contributions, invest in something else or even pay down your mortgage faster. There is no perfect number that applies to everyone, actually. The amount you need in your nest egg depends on several things:

  • Job security (the more secure your job or in-demand your skills are, the less likely you’ll face prolonged unemployment)
  • Family situation (the more mouths you have the feed, the more you need)
  • Housing situation (the person who could get out of a month-to-month lease and move in with mom and dad in an instant needs less than someone who owns an historic old home in a transitional neighborhood that might take several months to sell)
  • Other sources of cash available like a credit card with a high limit, 401(k) that you could borrow from or even just a rich aunt (not that you want to use these things, but they can be a part of your emergency plan as time goes by)

If you find yourself the sole breadwinner with a spouse and 4 kids at home, you probably need up to a year’s worth of salary set aside, while a DINK couple (dual income, no kids) link me can get by with 3 months of essential expenses set aside as long as we would be able to trim back on spending quite easily upon a job loss or accident.

Getting this one wrong on either side could cost you — have too little saved (perhaps because you were focused on spending money on making your house look perfect first?) and you could find yourself in serious debt or losing your home should something come up. Having too much in cash could cost you investing opportunities (see above). It’s best to re-evaluate how much you need at least every 5 years or so, and definitely when you have a big life event such as the birth of a child, significant increase in income, new home purchase or change in marital status.

Where you should try to get it perfect:

Minimizing taxes — I don’t mean spending money on mortgage interest to get a deduction, but making sure you’re taking full advantage of all tax savings opportunities. Some examples:

  • Maxing out your HSA before contributing to your 401k beyond the match
  • Making full use of a flexible spending account if you aren’t HSA eligible
  • Properly documenting and deducting charitable contributions
  • Running eligible education expenses paid out of pocket through your state’s 529 plan, if applicable
  • Tracking business deductions if you have a side gig

Choosing your life partner — You won’t find a perfect human and you can’t be perfect (sorry!), but you can find someone who’s perfect for you and that makes a huge difference in your long-term finances.

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Kelley C. Long

Written by

CFP & CPA writing about money & how it fits into life based on my work with everyday people as a financial coach. www.financialblisscoach.com

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +725K followers.

Kelley C. Long

Written by

CFP & CPA writing about money & how it fits into life based on my work with everyday people as a financial coach. www.financialblisscoach.com

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +725K followers.

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