I used to think that perfectionism could only be a positive trait. After all, it comes with a drive to achieve many things, and to do so with a high level of excellence. When it comes to academics or athletics, perfectionism can set you apart from the crowd; in the workplace, perfectionism impresses the boss and earns promotions.
But, as with any mostly-good trait, there are downsides to perfectionism — all of which stem from the reality that, in an imperfect world, it’s impossible to achieve (and therefore crazy to expect) absolute perfection in any area of life.
In academics, athletics, and careers, perfectionism can lead to self-created stress and burnout or procrastination and immobilization, not to mention what it can do to personal and professional relationships. The same dangers of perfectionism apply to the way we handle personal finances and other assets, as well.
Taking responsibility of your finances and seeking “perfection” is a noble mindset, but it can also lead to wasted money, lost earnings, and lost value. Here’s how.
#1: Throwing Out the Budget Because You Can’t Follow It With Diet-Like Rigidness
Perfectionists tend to be all-or-nothing kind of people. If we do something, we want to do it right. We have to do it right. There’s no in-between. So, when we fail to stick to our perhaps-too-unrealistic budget, we can be tempted to think we’re incapable of budgeting, period. Not allowing a little room for mistakes or spontaneity or miscalculations in your budget is setting yourself up for failure (the same goes for dieting!).
Instead, try to focus on areas where you’ve improved. Adjust your budget categories gradually from where you are to where you want to be, and find a budgeting buddy that can help you stay objective.
#2: Holding Off on Investing Because You’re Not Sure You’ll Be Good at It
The ironic thing about perfectionism is that, while it can be highly motivating, it can also immobilize you. Because we believe we won’t be able to do something perfectly, we don’t try at all.
This is especially devastating with investing, because time is, literally, money. Thanks to compound interest, the earlier you invest, the more passive income you’ll have years from now — regardless of how “perfectly” you did it.
Many of us are clueless about investing, but there are plenty of tools and resources (including humans) that make it very easy to learn just enough to get started. Like many other areas of finance, you’ll learn and improve along the way.
David’s Note: If you can’t decide how to invest, then just start investing in low cost index funds. It’s really the best choice for pretty much everybody, but it’s also a safe choice because you are paying lower fees and only making a bet that the economy will continual expand through time.
#3: Never Purchasing Any Home Because It’s Not Your “Dream Home”
While the value may not grow as exponentially as a long-term investment, a home can be an incredibly good way to force you to build wealth through making mortgage payments. The longer you live in a home, the more your equity grows. This isn’t to say that some homes aren’t wise investments, but with perfectionism, even a good house might not make the cut because it’s not your dream house.
Don’t let this tendency rob you of the value of investing, the joys of home ownership, and maybe even the opportunity to increase a home’s market value and turn a profit when it comes time to sell.
#4: Fixing What Isn’t Broken and Doing Projects Over and Over Again
This one hits home for me. I have a perfectionist’s eye when it comes to fixing and renovating my home, and it could easily lead to spending more on home improvement and DIY projects. Thankfully, this perfectionism clashes with my equally-strong sense of frugality, or I would have spent way more than I have.
It’s fine to want to fix things and make them look nice, but the quest for perfection can be costly. I’m learning to look for ways to improve on what’s there instead of throwing it out and starting over. It’s taking some time but I’m chalking up my failures to DIY “perfectly” as learning opportunities that only my eyes will criticize, and I’m keeping my eagerness to be “perfectly” done with everything within the constraints of a reasonable monthly home-improvement budget.
How about you? Does perfectionism cost you, financially or otherwise?
Originally posted at https://moneyning.com/money-beliefs/perfectionism/