The Ruly Blog

Debt gets a bad reputation but is a critical part of our financial lives today. Without debt, many of us could not purchase homes, cars, attend college or have some emergency cash to help pay the bills each month. In small doses, debt can be a beneficial means to an end. Overindulge in debt, however, and it can lead to financial ruin.

Comedian Marty Allen displaying his credit cards (1960). Photo by Al Ravenna for the New York World-Telegram & Sun. From the Library of Congress prints and photographs division.

When you are thinking about taking on a debt obligation (like a car loan), your first step should be to revisit your budget. How much money do you have available to spend on debt payments each month? This number should be your primary guide driving your purchase price. Sometimes, however, you will have situations, like student loans, where you might have reason to be more optimistic about your earning power in the future and can afford to take on more debt now.

Once you have made the decision to proceed with a debt obligation, make sure you research to find the best interest rates, especially online. Many people don’t know to do this and only visit the source they are most familiar with (the car dealership, the local bank, the college student loan office). I used to do the same thing in the past but now I would never take on any debt without trying to get the lowest interest rate by investigating competitors. It is often helpful to make a spreadsheet or table of the name of the lender, the interest rate and the fees charged. Google is your friend here as well as sites like bankrate.com. Also, asking friends and family for recommendations has yielded a lot of great tips as well.

Finally, once your loan is secured, you are in the “fun” stage of paying off your loan. The first years of paying off a loan are the hardest. You feel the pain to your budget of the new obligation and even though you are dutifully sending in your hard-earned payments each month, it seems like they are hardly making a dent in your total obligation. It is a bit depressing, actually. Once you get a few years in, however, you start to get used to planning for the debt expense, the bill-paying goes on auto-pilot and one day you notice that your outstanding balance is actually going down! Toward the end of the debt payoff, you take pride in writing the last few checks knowing that soon you will be debt free and will have more money back in your budget each month. The last check is a celebration!

The above scenario applies best to one-time obligations like student loans and mortgages. Many people never get to a “final payoff” amount because their debt is “revolving” credit like credit card loans. So, while they are paying off their current balance, they are also adding new charges on. It doesn’t take a mathematical genius to understand that you can’t get out of debt if you are spending more than you are paying. This is why you often hear financial experts advise to “cut up your credit cards.” The credit cards themselves are not evil but when you lack the discipline to spend only within your budget, they are an easy temptation.

The theme of this post is organizing your debt and by this, I mean a couple of things. First, you need to do the research described above to make sure you are taking on an obligation you can pay off and that you are paying the minimum amount of interest and fees that you have to. Second, you should understand the basic math that goes into loan payoff calculations and use these tools to organize your way out of debt.

The basic idea of a loan is that you take out a certain amount today from a lender and you pay the lender back the initial amount (principal) plus more (interest) to compensate the lender for the loss of use of the lender’s funds and/or the risk that you won’t pay the lender back. You pay the most interest in the first years of the loan (which is why your balance seems to never go down) and then over time you pay less and less interest until the loan is paid off.

Loans involve compound interest which gets confusing quickly to a lot of people. We have ventured beyond basic adding and subtracting and into multiplication and even calculus in some cases. Some people are so afraid of the complexity that they simply refuse to take out loans of any kind (which is OK but it can significantly limit your opportunities). Fortunately, there are many online calculators available that help you with the math. Below are two of my favorites:

1. The minimum payment calculator at bankrate.com. This calculator tells you “the true cost of paying the minimum” on a credit card obligation.

If we plug in the Median’s credit card balance of $3,000 at 18% interest into this calculator, we see that at their current rate of $150 per month, it will take them about 2 years to pay off their credit card balance (assuming they stop any new charges). If they only paid the minimum payment required on the card ($75), it would take them 18.5 years! Below is an example of an amortization table, showing how each of the Median’s monthly $150 credit card payments is applied with respect to interest and principal. You will note that the Medians pay the most interest in month 1 and the least interest in month 24.

Month	Fixed Payment	Interest Paid	Principal Paid	Remaining Balance
1	$150.00	$45.00	$105.00	$2895.00
2	$150.00	$43.43	$106.58	$2788.43
3	$150.00	$41.83	$108.17	$2680.25
4	$150.00	$40.20	$109.80	$2570.46
5	$150.00	$38.56	$111.44	$2459.01
6	$150.00	$36.89	$113.11	$2345.90
7	$150.00	$35.19	$114.81	$2231.09
8	$150.00	$33.47	$116.53	$2114.55
9	$150.00	$31.72	$118.28	$1996.27
10	$150.00	$29.94	$120.06	$1876.21
11	$150.00	$28.14	$121.86	$1754.36
12	$150.00	$26.32	$123.68	$1630.67
13	$150.00	$24.46	$125.54	$1505.13
14	$150.00	$22.58	$127.42	$1377.71
15	$150.00	$20.67	$129.33	$1248.38
16	$150.00	$18.73	$131.27	$1117.10
17	$150.00	$16.76	$133.24	$983.86
18	$150.00	$14.76	$135.24	$848.62
19	$150.00	$12.73	$137.27	$711.34
20	$150.00	$10.67	$139.33	$572.01
21	$150.00	$8.58	$141.42	$430.60
22	$150.00	$6.46	$143.54	$287.05
23	$150.00	$4.31	$145.69	$141.36
24	$143.48	$2.12	$141.36	$0.00

2.  The Debt Pay Down Calculator at bankrate.com. This calculator gives you a plan to pay off all of your debts and become debt free. In the Median’s case, we have the following:

$10,000 @ 8% for 5 years = $202.76 monthly (car loan)
$6300 @ 7% for 5 years = $124.75 monthly (student loans)
$3,000 @ 18% interest = $150 monthly (credit card)
$5,000 @ 0% interest = $100 monthly (amount to pay themselves to build an emergency fund)

The calculator asks how much “extra money” the Medians can squeeze out of their budget to help pay down their debts. We’ll assume they will give up cable TV to save $60 a month, they will cut down to just one vacation a year to save $62.50 a month on travel costs, they will cut down their clothing budget by $50 a month, and they will cut down their grocery bill to the “low cost” plan to save $200 a month. They will pay $100 per month into a savings account to start building their emergency fund.That gives us $272.50 “extra.” We will assume the Medians get no raises and no windfalls and that they are in the 25% tax bracket.

The calculator tells us that the Medians can be completely debt free (except for their mortgage) in just 35 months, including having built up $5,000 in emergency savings, if they stick to this plan. The plan that is generated tells the Medians to put all of their $272.50 extra per month to their credit card in order to pay it off by January 2011. They then put the extra toward their car loan and pay it off by May 2012. Then the money goes toward their student loans, which are paid off by November 2012 and then finally to their emergency savings account which is built up to $5,000 by February 2013.

You can play around with the calculator and see the effects of various decisions. If the Medians, for example, did nothing other than just commit not to charge one penny more to their credit cards, they would pay off everything in 59 months (5 years or 2015). If the Medians agree just to give up cable and put the cable payment of $60 toward their debt (along with not charging one penny more), they shave 9 months off the total payoff time.

Let’s assume the Medians look at this plan and agree that they want to be debt free by 2013. They also look at their budget and realize that all those extra charges they put on their credit card each month have to go, so not only do they have to make the cuts to the cable, travel, clothing and grocery budgets, they are going to try to cut down on their auto expenses by carpooling to work at least a few days to save on gas. They know that some months they will be less than perfect and they will borrow from their own emergency savings to tide them over but they are going to really try.

If they make it, the great news is that come 2013, the Medians have an extra $850 per month in their budget. If they are smart, they will treat themselves to a few things but plow most of this amount into retirement savings, college savings or adding to the emergency fund.

Being organized with your money is something I feel strongly about. A lot of people with serious debt problems never run these calculations– most because they don’t know how. As you can see, however, you can learn to organize your own finances. If you know someone struggling with debt, I encourage you to forward a link to this post to help encourage more people to learn to be smart borrowers.

Back on Wednesday when we will discuss more about borrowing and loans in the context of mortgages.

Balancing a checkbook is one of those tasks that seems like it should be very easy but is really an accounting nightmare! When I got my first job as a teenager, I had my own checking account that I would dutifully balance “to the penny.” Of course, it was easy to do it then because there were very few transactions to worry about. Once I left home, got married and began my own household, balancing “to the penny” became time consuming and difficult with the paper-based system. Often I was happy if I was within about $10 of balancing. My husband’s system at that time was just to keep a rough idea in his head of how much was in the account. After an embarrassing bounced rent check, he quickly converted to my written system.

Accountant and assistant at the W. Atlee Burpee Company, seed dealers (1943). Photo by Arthur S. Siegel. From the Library of Congress Prints and Photographs Division.

Our finances got complicated quickly with two paychecks to keep track of and bills, bills, bills. About the time I began to complain to my husband that the bank must be stealing money out of our account because my fine accounting skills could certainly not be to blame, he insisted that I learn to use computer-based checkbook software. I grudgingly consented and today I would not be without financial software.

While there are those who swear by their paper-based methods, today’s world of finance moves too quickly not to use the computer. Once you have your accounts set up on the computer, you can know in a few seconds what your checking account balance is, how your retirement account is fairing in the stock market, what your net worth is, how much you spent on groceries last year, and other helpful data. Yes, you can do this on paper too but it takes much longer to figure out–hours or even days.

The computer is not without its frustrations and problems, though. I have been primarily working with Quicken software for about 10 years now. While there are a lot of things to like about Quicken, I have become increasingly frustrated with some of Quicken’s business practices. When Quicken stopped using the universally available .qif format in favor of the proprietary .qfx format, I had to reset a lot of my accounts and some banks no longer seem to participate in the automated “One Step Update” download feature that used to work so beautifully. I also have been disappointed in the advanced analysis tools available in the software. Many of the analyses I get from Quicken are just plain wrong (perhaps because I have not entered my transactions in exactly the right way Quicken wants them–which seems to change from time to time) and I have to do my own calculations anyway. Despite numerous upgrades over the years, there haven’t been a lot of significant improvements in Quicken either. Currently, my 2009 Quicken software now crashes on me 3 times each time I try to upload my checking account information before it finally loads on the fourth try for unknown reasons.

Despite all these problems, I still believe that everyone should learn to manage their finances electronically. At a minimum, you should track your primary checking account and the main credit card you use. As you become more knowledgeable, you can add investment accounts, loan obligations, your asset accounts and other transactions to round out your financial picture.

Below, I tell you how to get started balancing your checkbook with GnuCash, a FREE open source software download.

BALANCING YOUR CHECKBOOK WITH GNUCASH

1. Download the Gnucash software at http://www.gnucash.org and install it on your computer.

2. When the software opens, close the Tip of the Day box and choose “Create a new set of accounts.” in the pop-up window that appears.

3. Find the window called “New Account Hierarchy Setup” (might be hidden behind some other windows). Click “Forward.”

4. Choose currency (for most of my readers, USD (US Dollar)), then click “Forward.”

5. Choose the accounts you want to create and then click “Forward.” If you are worried about being overwhelmed, start with just “Common Accounts.” The Medians would choose to set up the following:

Childcare Expenses
Common Accounts
Education Loan
Home Mortgage Loan
Homeowner Expenses
Retirement Accounts
Spouse Income
Spouse Retirement Accounts

In the next window “Setup New Accounts,” you can make changes to the accounts you have just created. If this is your first time using software to monitor your accounts, decide when you are going to start. January 1, 2010 might keep things simple. If you use this date, then you need to know the balance in each account as of the last transaction on December 31, 2009. In the Medians case, I will assume they have $100 in their checking account on December 31, 2009. You can type the opening balance directly into the list.

If you have more than one checking account, you might want to rename the checking account to Checking-NameofBank, ex. “Checking – MyBank.” Don’t get overwhelmed here! If you are ready to give up because it seems too complicated, don’t worry about picking all the different options or entering balances, just click, “Forward.”

7. On the next screen, click, “Apply.”

8. You will then see a screen with a summary showing, Assets, Equity, Expenses, Income, Investments, Liabilities. Click the down arrow to the left of Assets and then the down arrow next to “Current Assets” to get to your checking account ledger.

9. If you put in an opening balance, it will show up as the first transaction in the ledger. Change the date of the opening balance to 12/31/09. You do this by clicking on the date and either typing 12/31/2009 or clicking on the little box to the right of the date and selecting the date from the calendar that appears.

10. When you try to change something, a warning box comes up. Click the box for “Remember and don’t ask me again.” then click, “Record Changes.”

11. Now you are at a point where you have a choice to enter in the transactions from January 1, 2010 to the present. You can either enter them by hand based on your most recent account statements or, if your bank offers it (and most banks do), you can download the transactions from the bank’s website.

12. To do an automated download, sign in to the bank’s website and follow the instructions to download the account information. Most banks offer .qif format. Typically, when you select .qif format, you have to specify the date range you want. It is usually a good idea to put the dates you used in the saved file name. So, for example, you might save the file as “2010-01-01-to-2010-03-05-mybank-checking.qif.”

To import these files into GnuCash, you select, File, Import, Import QIF… from the GnuCash main menu.

This will load a helper menu. Click forward on the first screen and on the next screen, click, “Select” to find the file you saved from your bank. (You might need to double-click to get the file to be accepted.) Then click “Forward”

The next screen asks what the name of the Account is that you want the QIF transactions imported into. Type the name of the checking account, in my case, “Checking – MyBank”

On the next screen showing the QIF files you loaded, click, “Forward”

On the next screen, that essentially tells you that GnuCash might create accounts for you based on the downloaded information, click, “Forward.”

On the next screen, GnuCash is asking you to confirm that it is putting the downloaded transactions into the right account. You can see that it is going to download the Medians’ transactions into Current Assets: Checking – MyBank, which is correct. Click, “Forward.”

On the next screen, GnuCash essentially tells you that it might need your help to categorize some of your downloaded data, click, “Forward.”

On the next screen, you might get a long list of things that look kind of scary. Relax! If you can’t figure out what these transactions are, just click, “Forward.” Otherwise, if you see a transaction you recognize, in my example, an electric bill, you can tell GnuCash that this is an electric bill so it will remember this for the future. If you want to do this, highlight the name of the bill, then click the “Change GNUCash Account” button and then select Expenses, Utilities, Electric, OK. Repeat for any identifiable bills.

When you are done, click, “Forward.”

On the next screen, select the currency of the transactions. For most readers, it will be USD (US Dollar), then “Forward.”

On the next screen, click, “Apply.”

13. You are now in your check register! Your job is to go through each transaction one by one and give each one an appropriate category. You might want to modify the “Description” category to be something you remember. I usually use the name of the vendor, ex. “Acme Power,” or “MyKids Child Care Center.” In the “Transfer” category, select the category of expense. Most of your expenses will be easy to recognize. Get familiar with how GnuCash titles each category. Restaurant meals are called “Dining.” Your water and gas bills fall under “Utilities,” etc. When you get more familiar with GnuCash you can change all these names but if you are feeling overwhelmed just stick with how they are called now.

14. What if you need to add a new category? We’ll use the Medians as our example. Let’s say you want to add a special category for Internet access because you don’t like the “Expenses:Online Services” category or you use that category for something else. In the expense category, you can just start typing the name, “Expenses:Internet.” When you are done typing the name, press enter. You will get a little warning box, select “Yes” to create the new category. Click “OK” on the next box that comes up.

15. How do you enter a paycheck? This can be a little confusing but once you do it a few times, it won’t seem hard to you. Let’s use Mr. Median as an example.

In the ledger, find a blank line and enter the date of the paycheck and a good description. In your case you might put the name of your employer and the word paycheck, such as “Acme Inc. Paycheck.” Then, click the “Split” button.

This will open up some subcategories in your paycheck. Type in the net amount of the paycheck (after all deductions) in the first category that is created by default (Assets: Current Assets: Checking) then hit “Tab” to move down to the next line. Enter in all the deductions to your paycheck one by one, giving each the appropriate category. At the end, you will enter in the gross amount of the paycheck (before deductions) as Income: Salary. Mr. Median’s paycheck looks like this:

After you have done all the work to set up the paycheck and assuming the paycheck is the same every two weeks, you can click the “Schedule” button. If Mr. Median is paid every two weeks, select “Bi-Weekly” from the drop-down box and the start date of his first 2010 paycheck (usually 1/15/2010) and click OK.  (For me, I had to save, close and re-open GnuCash to get a pop-up window asking me to click OK to auto-populate the paychecks between 1/1 and 3/5.)

16. When you are finished entering all your transactions in your checkbook register, click the “Reconcile” button. A box will come up asking what the ending balance in the account is. You can either look this up manually on your account statement or by logging into your account on the bank’s website and type it in or it might be automatically populated if you downloaded the transactions from your bank’s website.

In the next window, you will see a list of your “Funds In” on one side and “Funds Out” on the other. You can check the last column under “R” to indicate the transaction has cleared your account. When you are done checking all the cleared transactions, the “Difference” value at the very bottom of the window should read “$0.00.” Here is the Medians example:

Click the green “Finish” button at the top of the window to complete the reconciliation.

17. Before closing the program, click File, Save and select where to save the file. You will also want to save a backup copy to a CD, flash drive or other location. You don’t want to lose all your hard work!

I hope that the above information inspires you to have the courage to taken on computerized checkbook management. While it helps to understand accounting principles, it is not necessary and you can learn to do this!

If you try the above instructions and you are having trouble, please post a comment and I’ll see if I can help you. You can also check out the GnuCash Help Manual here.

Hang with me! Even if you are not up to electronic checkbook management, please continue to read and don’t give up. Every little bit you learn about managing your finances will help you. You don’t have to understand everything all at once.

Wishing you a wonderful and financially sound weekend!

Budgeting is one of the most basic financial planning methods but also one of the most powerful. A budget is nothing more than adding together your sources of income and subtracting your expenses. Your budget should be the baseline for all of your financial decisions. Most people, however, think budgeting is complicated, time consuming or have no idea where to start.

If you are only going to read one post at Ruly this month, this is the most important one.  Regardless of any other financial decision you make, if you structure your life so that you can comfortably pay all of your obligations as they come due each month, you should sleep well at night and hopefully amass wealth slowly over time.

Art Brown and Family on the couch. (1932) Photo by Theodor Horydczak. From the Library of Congress prints and photographs division.

Sometimes the best way to learn is by example. Allow me to introduce you to The Medians, our fictional family who loosely represents the data on median American income and expenses compiled by the Federal Reserve and the Census Bureau. Because the median doesn’t accurately capture any one particular circumstance, I have filled in a few holes based on my life experience to round out the Median’s finances.

The Medians are a Virginia family (husband, wife and two children).  They earn the American median family income of approximately $73,000.  Both Mr. and Mrs. Median are employed full-time.  Their children are cared for in a day care setting while their parents are at work.  Mr. and Mrs. Median commute to work in the Washington, D.C. metropolitan area.  Due to the high cost of living in D.C., they reside in the distant suburbs where housing is more affordable and commute long distances to work.  The Medians try hard to live within their means.  They aren’t extravagant in their expenses but they do indulge in a few treats: annual family vacations to the beach, visits to family during the holidays, cable TV, a restaurant meal out once a week and occasional wardrobe updates. Sometimes the Medians come up a little short each month and charge a few things to their credit card. They are still paying off car and student loans and their mortgage. They put aside a little for retirement savings each month in their 401(k) accounts and their employers match their contributions.

Peeking inside the Medians checkbook for the month, you see the following:

THE MEDIAN FAMILY BUDGET

ANNUAL INCOME

Mr. and Mrs. Median’s combined full-time salaries		$73,000
Mr. and Mrs. Median’s combined 401(k)/retirement plan contributions		$2,190
Estimated salary income after taxes and deductions for Social Security, Medicare, 401(k) and employer health insurance premiums		$60,000
Estimated Monthly Disposable Income		$5,000

MONTHLY EXPENSES

Housing
Mortgage Payment ($150,000 @ 5.5% interest)		$851.68
Real Estate Taxes ($0.62 per $100 of assessed value on $200,000 home)		$103.33
Home Insurance		$24.75
Home Repairs/Improvements (1% of home’s value)		$166.67
Subtotal Housing Cost		$1,146.43
Food
Groceries (assumes the “Moderate” cost of food at home)		$850.00
Restaurant Meals		$120.00
Subtotal Food Costs		$970.00
Transportation
Car Loan Payment		$200.00
Car Insurance		$166.67
Gasoline (assumes Mr. and Mrs. Median are driving to work)		$400.00
Vehicle Registration/Inspection Fees		$7.00
Car Tax (required in Virginia)		$50.00
Car Repairs/Maintenance		$100.00
Subtotal Transportation Cost		$923.67
Child Care
Day care expenses and/or children’s classes/extracurricular activities		$800.00
Subtotal Child Care Costs		$800.00
Utilities
Electricity/Gas/Water		$200.00
Telephone/Cell phone		$70.00
Internet		$40.00
Subtotal Utilities Costs		$310.00
Debt Payments
Credit Card Payment ($3,000 balance)		$150.00
Student Loan Payment		$125.00
Subtotal Debt Costs		$275.00
Luxuries
Clothes, shoes, haircuts, manicures, etc.		$150.00
Gifts		$50.00
Cable TV		$60.00
Travel (cost of 1 or 2 big vacations per year, airfare, hotel, etc.)		$125.00
Subtotal Luxuries		$385.00
TOTAL ALL EXPENSES		$4,810.10
MONTHLY NET INCOME		$189.90

The Medians feel pretty good about themselves after this exercise. They have done a lot of things right. They are saving for retirement, they own a home and they are making regular payments on their loan obligations. And gee, they even have almost $200 left over at the end of the month. That’s pretty good, right?

Well…not really. While the Medians are doing a lot of things right, this budget is really pretty tight. The Medians spend every penny they generate. The budget prices only the average cost of expenses over the year. If the gas bill suddenly doubles in the winter, the Medians will have to charge that to their credit card, for example. The Medians also are not counting on the fact that since most employers pay every two weeks, their typical monthly income is more like $4615 with two months a year where it is $6923. So, 10 months out of the year, the Medians’ expenses put them in the hole by $200.

There are a couple of things that are not in this budget too that really should be, like life insurance on Mr. and Mrs. Median for the benefit of their children and a small amount for emergency savings. Mr. and Mrs. Median are not putting away nearly enough money for retirement and college savings is out of the question.

Any family budget with less than about $500 “fat” at the end of the month is prone to overspending in my experience. Even the most accurate budget is going to forget a few things. In the Medians case, for example, there is no allocation for charitable donations or religious tithing, which for many people is a common expense. Magazine subscriptions, impulse buys, computer upgrades, they all add up. Also, I have been a bit kind to the Medians on some of their expenses. For the DC area, their housing and child care expenses are probably on the low side.

Also, if you put this family under one extra bit of stress (higher taxes or health insurance premiums, Mr. Median gets laid off or Mrs. Median takes a 5% pay cut, one of the Median’s children has a medical emergency, etc.) this family’s debt load will spiral out of control. The Medians current situation assumes that everything in their lives will go perfectly. As we all know, this never happens. There always has to be some allocation for disasters.

Is it hopeless for the Medians? No. They can do a lot to improve their financial situation but they have to be realistic about how much things cost and consider adopting an extraordinarily frugal lifestyle for at least a little while to build up an emergency reserve. They might consider axing their “luxuries” for a while. Mr. or Mrs. Median could consider “slugging” to work to save on the transportation expenses. (Slugging is an unusual Virginia transportation solution wherein you drive to a commuter parking lot and hop in a car with total strangers so that the driver can take the fast highway commuting lanes (which require at least 3 occupants in the car)). They could stop eating out and try to adopt more frugal eating habits with their grocery shopping.

Is any of this fun? Not really. But this extreme frugality doesn’t have to last forever, just until Mr. and Mrs. Median pay off their credit card and build up at least a small emergency fund (say $5,000). The luxuries can work back in gradually, hopefully as Mr. and Mrs. Median’s income rises over time.

This type of exercise can be particularly stressful for those in retirement age or on fixed incomes. There could come a point at which the budget shows, for example, that a home is no longer affordable. Making a big change like selling a home is stressful and hard. Yet, we all have to be realistic that such a difficult change could come to any of us at any age. Rather than fear the change, I would rather be prepared to accept it.

Now that you have seen what life is like for the Medians, it is time to issue the Ruly Challenge.

The Challenge:  Create or update your household budget.  Have a firm understanding of your income and expenses.  Identify the costs that are fixed and the opportunities you have to save or improve your financial situation.

Below is a Ruly worksheet to guide you in your efforts. You have two options, the pencil and paper method or a spreadsheet with some calculations built in that can be adjusted over time.

• Ruly Budgeting Worksheet (printable pen and paper version)
• Ruly Budgeting Worksheet (Excel spreadsheet)

Be brave!  This is the foundation of your financial planning.  There are no wrong or right answers.  Each budget should reflect the lives and goals of its planners.

Please feel free to share in the comments your thoughts on the Medians or budgeting in general. What advice would you give to the Medians?  (The Medians are fictional and don’t bear a grudge so if you have some tough love to give them, they can take it!) Do you think the Medians reflect the financial challenges of the typical American family?

In the month of March, we will be discussing a fascinating and difficult subject . . . money!

Women Inspecting Currency at the U.S. Bureau of Printing and Engraving (c. 1907) From the Library of Congress Prints and Photographs Division.

While we might not like to admit it, money is as essential to life as air, water and food. Money can’t buy health, happiness or love but one thing money does is give you options.

I have never been too concerned with how much money I have and I don’t think anyone really should be. In our young marriage, my husband and I decided that our goal for money was always to have enough money not to have to worry about basic things like paying the rent, buying groceries and paying the electric bill. Any more than that was a delightful bonus. As we have grown and added children, “basic things” keeps expanding to include more and more things like retirement savings, preschool tuition, and insurance, but our basic philosophy is still pretty much the same.

I can’t tell you how to make a million dollars, how to pick stocks or how to make your credit card debt disappear but I can help you get your finances organized so that you know how much money you have, where it is going and how to gather the information needed to evaluate various financial decisions. You will then feel more confident when you evaluate the advice from your accountant, attorney, broker or other financial advisor.

Stock-picking guru Jim Cramer has a classic quote:

“[Y]ou have to learn to be either a better investor or a better client; there is no other choice.”

–Jim Cramer, Jim Cramer’s Real Money: Sane Investing in an Insane World

What I like about this quote is that it lets us know clearly and plainly that you can’t just choose to throw your hands up and say, “This is too complicated. I can’t understand my 401(k).” or “I don’t know anything about taxes.” There is too much at stake to be uninformed.

If there is one thing we have learned from the current financial crisis, it is that we have to be educated enough to make financial decisions based on facts, not feelings. It is not enough to make a complex financial choice, like taking out a mortgage, just because your neighbors and friends are all doing it. You need to be able to evaluate if it is the appropriate choice for you.

If you aren’t willing to learn yourself, then you need to learn how to pick a qualified person to make these decisions for you. Note that money confusion is not just a problem for the poor and middle class. Just ask any of the wealthy victims of the Bernie Madoff scandal about the consequences of being too trusting and not doing the difficult homework of evaluating a financial decision.

Yes, this month you will have to do a little math, but don’t be anxious about it. Many financial decisions can be evaluated with basic adding and subtracting. Spreadsheets are great when things get more complex. I will walk you through some of the tools I use to stay on top of my own finances.

When delving into a new topic, it is nice to get an overview from a recognized expert. Fortunately and amazingly for us, Professor Niall Fergusson has taken on the incredible challenge of providing a history of the world from the perspective of money and finance. You can view his excellent 4-hour documentary, The Ascent of Money online at pbs.org. He takes on such questions as “What is money?” and how the stock and bond markets work. For a one minute preview of the series, click below.

The world is complex and the the world of finance is complex but it is not too complex to understand with a little effort. Don’t give up and join me this month to explore how to bring some order to your finances!

Do you have a burning question about money you want to see answered this month? Please share in the comments.

It’s the end of the month and time to recap our discussion of perfectionism.

Arhat (Chinese: luohan), dated 1180 from the Asian Art Museum of San Francisco. An arhat is a Buddhist deity who who has reached a stage of perfection through study and meditation. Photo by Didactohedron from the Wikimedia Commons.

• We started the month defining perfectionism and dicussing Pavel Somov’s 3 types of perfectionistic hunger.
• The Ruly Challenge this month was to keep a perfectionism diary to make you more aware of the areas in your life you expect perfection.
• The big blizzard of 2010 came to east coast and we discussed snowstorm survival skills, including my 4-year old’s blizzard cupcake recipe.
• We profiled perfectionist extraordinaire Martha Stewart and reviewed her Valentine chocolates.
• We also gave instructions for perfectly fun crayon valentine hearts for kids.
• We contrasted two authors approaches to perfection and happiness, Alice D. Domar’s, Be Happy Without Being Perfect and Gretchen Rubin’s The Happiness Project.
• Joe Hanley gave us the perfect Ruly Mix to remember the 2010 Winter Olympics.
• We discussed lessons learned from professional sports and public safety professions on perfectionism and learned that perfectionists might not make the best law enforcement officers.
• We discussed the roots of perfectionism, the parent-child relationship, and gave suggestions for perfectionist parents and perfectionist kids.
• We discussed perfectionism in the workplace, including how to cope with the perfectionist boss and manage the perfectionist employee.
• Finally, Ruly Ruth gave her perspective on perfectionism in friendships and discussed her love of perfectionistas.

I hope this month’s discussion has been as enlightening for you as it has been for me. Now that I am aware of the attitudes that define perfectionism, I am better able to evaluate numerous situations in my personal and professional life.

One of the most important quotes this month for me came from Hara Estroff Marano’s article, “Pitfalls of Perfectionism” that we discussed in the context of perfectionist parenting.

“[P]erfectionism is a crime against humanity. Adaptability is the characteristic that enables the species to survive—and if there’s one thing perfectionism does, it rigidifies behavior. It constricts people just when the fast-moving world requires more flexibility and comfort with ambiguity than ever. It turns people into success slaves.”

–Hara Estroff Marano, “Pitfalls of Perfectionism”

I still have a lot to think about perfectionism. My current view is that we need “tempered perfectionism” in our lives. While in yoga class last Saturday standing in triangle pose, I had a moment where I thought, “Why am I doing this to myself?” and realized that I must be doing these difficult exercises in the belief that they are somehow the perfect means to strength and flexibility. In the right doses, perfectionism is a powerful motivator. Move a notch beyond the ideal dose of perfectionism, however, and we end up with rigidity, inflexibility, fear of failure and our creative powers suffer.

Going in to the Ruly Challenge this month, I knew that I have a lot of perfectionist tendencies but I was confident that I was confining my perfectionism just to expectations for myself. Wrong! As I reviewed my diary at the end of the month, I was shocked to see how often I was disappointed when I expected other people to act perfectly as well.

A recent conversation with my husband brought home two key examples of perfectionism for us. My husband was playing a game of tag with my youngest daughter around the kitchen island. It was adorable. “Let me grab the video camera!” I said. “No way!” he responded “This kitchen is too much of a mess!” This brought on a semi-heated discussion about perfectionism. I chastised my husband for believing that anyone watching the video would be thinking about what our kitchen looks like rather than enjoying a tender moment between father and daughter. He ultimately agreed that he was being ridiculous. He showed me to be ridiculous too, however, when he suggested we spend a day cleaning the kitchen together and I became upset that he did not offer the “perfect” suggestion of not spending an entire precious weekend day cleaning but rather spending a few hours cleaning and then doing something enjoyable as a family. We both had to laugh and learned a lot.

You see perfectionism at work in today’s business headlines as well. This weekend I was shopping at IKEA, one of my favorite stores. While I was looking up products on their website, I was surprised to find how many recalls their products have had. The current product recall list identifies hazards including “strangulation,” “laceration injury,” “injury to the head,” “choking hazard” and “flammability.” IKEA doesn’t hide these defects and puts a prominent link on the main U.S. page of their website. Strangely, these defects don’t seem to have harmed IKEA in any way. People still trust and like IKEA products very much. The fact that IKEA is so upfront about telling people about defects shows their commitment to safety. Also, IKEA’s products are generally so affordable that it is not a big deal to just throw something out and get a new one in the event of a defect.

Contrast IKEA with the current focus on Toyota’s gas pedal defect. It is my understanding that Toyota is not entirely sure why this defect is occurring and therefore doesn’t really know how to fix it. I find it interesting that people are absolutely unforgiving about this. While it could be that Toyota hid a known defect, it is also possible that something unknown happened or that it will never be fully understood why some cars have the defect and others don’t.

The Toyota recall shows an important aspect of human nature that when large amounts of money are involved more perfectionism is expected. For many people, Toyota’s mistake has become their mistake as well and they may be faced with losing money by purchasing another car or losing money on the sale of their defective car. Threatening people’s financial security puts people into hyper-control mode and perfectionism abounds. It is an important lesson to all of us that we can never guarantee perfection in any situation, even when we spend a lot of money, and that we should always have “Plan B” ready.

Finally, I wanted to give you the update on my amaryllis plants. The perfectionist plant featured in earlier blog posts, collapsed from exhaustion after putting out 4 perfect blooms. It is currently being supported by two wooden stakes and looks spent and sad. The other “Type B” plant has still not flowered yet but it has many lush green healthy leaves and is still going strong. Ruly Ruth might say the Type B plant is boring and the life of the perfectionist plant was dramatic and exciting. She might be right. I think we are all searching for that happy medium between perfectionism and mediocrity.

On Monday, we start a new month and a new theme. Please check back then and in the meantime, please feel free to share in the comments your thoughts on perfectionism.

Have a great weekend!

Four Miss America candidates: Jacque Baker (Miss Iowa), Linda(?) Mead (Miss Mississippi), Sharon O'Neal (Miss Kansas), Suzie Jackson (Miss Arkansas) / World-Telegram & Sun photo by Al Ravenna. From the Library of Congress prints and photographs collection.

Perfectionista: A woman who shows a level of perfection in one or more aspects of her life.

I don’t have average friends.  All of my girlfriends show levels of perfectionism somewhere in their daily lives. For example, I have friends who are perfect about their hair, makeup, clothing, housework, children, cooking, art, photography, career, and interior design. But I will say that not one of these amazing women is perfect at all of these things all of the time. Thank goodness!

It is energizing to be around people that are perfect at what they do. Average, is well . . . boring.  Friends that are amazing at their careers always have fascinating tales from their jobs and industries. I love being seen at lunch with my impeccably dressed girlfriends. I love to get perfectly made homemade arts and crafts from my domestic perfectionistas. My passion for food and cooking mirrors several of my friends—we LOVE to cook, eat, and share special ingredients we’ve found. For me, that is bliss.

Being friends with perfectionists is not always easy.  If you are the jealous type, there is a lot to be jealous of.  Competition can be fierce, particularly in two key areas.

Appearance is often the number one jealousy-inducing factor–the prettier you are the more envy you induce.  Among my friends, there tends to be two general trends in appearance strategies.  Some women work very hard on their physique and sport a lean, trim appearance.  Others focus on clothes, hair and accessories.  Both are gorgeous!  It is the rare person, however, who pulls it all together with a perfect body, hair, clothes and accessories.

The second major area of competition among my friends is houses.  Both men and women can develop house envy.  Where women focus on details like granite countertops, cabinetry and furniture, men zero in on the size and functionality of the garage, the outdoor barbecue pit and the size of the TV.  House envy isn’t always a question of money, though.  It is more about the time and effort invested in the result.  Creative decorating can still give you that perfectionist wow on any budget.

I have remained good friends with all my perfectionistas probably in large part because I am not the jealous type.  I don’t want to be these women or even have all the skills that they do.  I just want to be associated with them–to be surrounded with excellence in the hope that maybe some of it might rub off on me.  It also gives me a great network of experts to draw on.

Perfectionistas have a variety of personality types but tend to fall in the following categories:

1. The introverted perfectionista. This person is usually very detail-oriented and has encyclopedic knowledge in their areas of expertise.  Often the perfectionism is rooted in the home setting or personal pursuits like hobbies or crafts.  Rarely will this type of perfectionista focus her perfectionist efforts on appearance. This perfectionista will have great ideas but is often afraid to volunteer them.  If you take the time to work to draw out the ideas from this perfectionista, however, you will be richly rewarded!
2. The extroverted perfectionista. More often you will find that this type of perfectionista is focused on appearance and the home.  Brand names like Coach and Pottery Barn are more important to extroverts.  The extrovert is motivated by social interactions but doesn’t fear them the way an introvert might.
3. The know-it-all perfectionista. None of these perfectionistas are my friends and it is very hard to be friends with them.  The superior attitude and the superficiality of the relationship are hard to overcome.  Often these types of perfectionistas are the first to flee should any hardship befall you.  They are there for you in the good times but the imperfectness of any sadness or disaster is too much for them to bear.

Embrace your inner perfectionista!  I challenge all of you to find your areas of perfection and to apply them in a positive manner to your life.  If you do this, I believe you’ll find a new passion for life, have more confidence and look forward to meeting others that offset your perfections.

Joi de vivre, perfectionistas!

Hokusai Katsushika, "Yoshiwara" (1804). From the Library of Congress prints and photographs division.

Perfectionism is frequently found in the work environment. For many of us, our jobs are the means of survival for ourselves and our loved ones, allowing us to provide shelter, food, health care and occasionally some fun indulgences as well.

It is important for job security to be viewed as a valuable employee– one who does the job well, perhaps even perfectly. But as we have seen all this month in our discussion of perfectionism, while a little perfectionism is good, too much has negative consequences. In the context of employment, some big problems arise with perfectionist bosses and perfectionist employees.

The Perfectionist Boss

The perfectionist boss is one of the most dreaded of bad bosses. The perfectionist boss expects everything to go according to his or her expectations, which may be grossly out of touch with what is reasonable or appropriate for ordinary people. The perfectionist boss tends to micromanage everything, makes decisions at a snail’s pace, is afraid to stand up for the team on controversial decisions, and erodes morale with a constant stream of negativity and criticism.

Why is the boss such a perfectionist? There could be many causes, ranging from genetic predisposition to toxic home environments to an irrational fear of losing one’s job. The boss might also be demonstrating delegated perfectionism–the boss’s boss is a perfectionist so therefore the boss is a perfectionist too.

How can you work with a perfectionist boss? Most of the advice I have read says essentially, “Become a perfectionist.” Sadly, this is probably true in many cases since perfectionists fear change and believe that their way of doing things (and only their way of doing things) is the best. If you find yourself working for a perfectionist, it may be time to start looking for another job.

Since not everyone has the luxury of moving on to another job when a perfectionist is at the helm, what else can you do? There are two options to pursue: 1) managing from below and 2) defensive documentation.

Managing from Below

Managing from below is a key skill that almost everyone needs to learn in any job. Managing from below essentially refers to strategies to influence your boss’ decision making process to try to help the boss correct for bad decisions. Often the only “strategy” you can use is careful marshaling of objective facts. It is a lot like being your own lawyer. When your boss makes a decision you don’t agree with, before you simply agree to the decision, state the reason why you disagree in as friendly and respectful of terms as you can. For example, “I will be happy to do that but it will mean that I have less time for the other project which I understood was more important.”

Don’t be surprised if the response you get from the perfectionist boss is “If you can’t do it perfectly, I will find someone else who can.” or even, “I will just have to do it myself.” The perfectionist boss would rather wear everyone out to the point of exhaustion rather than make a calculated trade-off for less perfection on something in exchange for more perfection on something else. The perfectionist boss struggles greatly with prioritizing and cannot prioritize either his or her own work or the work of the people the boss manages.

Defensive Documentation

It is not an unrealistic fear that a perfectionist boss may become disillusioned with your imperfect work and decide that a more perfect candidate would be a better replacement for you. When you are working for a perfectionist, it is important to document your accomplishments, how you spend your time and praise from others who appreciate your work. All of this documentation will not necessarily save your job but it will help you either in applying to other jobs or having to explain to someone else why you think you are performing at an exemplary level. It can also be a source of maintaining your own self-esteem, reminding yourself of all the great things you accomplished.

Ultimately, when working with a perfectionist boss, you have to hope for one of the following outcomes: 1) the boss has an epiphany and changes the perfectionist behavior once the reality of the demands of the position sink in; 2) the boss suffers a nervous breakdown from overwork and takes a leave of absence; or 3) you find another position. While you can temporarily compensate by adopting more perfectionist qualities in yourself, this is ultimately not a healthy, effective or sustainable solution.

The Perfectionist Employee

Perfectionist employees can be detrimental to an organization as well. Procrastination due to fear of making mistakes, excessive time spent on performing tasks perfectly, and failure to prioritize projects can destroy productivity as well. When the perfectionist employee performs something well, the praise is intoxicating to the employee. When the praise is not there, the employee feels unvalued.

It is much easier to handle the perfectionist employee than the perfectionist boss, however. A perfectionist employee will be motivated to make changes to their behavior by any negative feedback which threatens their job security. The formula for success in working with a perfectionist employee is to be generous with praise (which is a good idea whether your employee is a perfectionist or not) and to assist the employee in setting reasonable priorities based on specific expectations. Also, make sure the workload is structured to allow the employee to exercise their natural perfectionist tendencies on some projects where the effort will be appreciated. For example, “You always do such great work! We have a lot of work to accomplish by the end of this week. I would like you to focus the most on Project X. Project Y and Project Z are less important because _____.”

Once you tell a perfectionist employee that a particular project is not as important, you will lose all credibility if you then change your mind and criticize how the work is done without a good explanation. “It is better to say, for example, “The situation on Project Z has changed. It is now the most important project. Could you revise your work to make the following changes?”

Avoid Becoming the Perfectionist Boss or the Perfectionist Employee

If you see yourself in any of the above examples, you are probably in good company. What are some steps you can take to improve your perfectionism at work? One of the strategies that has worked best for me is to document how long certain tasks take and the steps they involve. This can be a major pain. You don’t have to do it for every task that you do but certainly every big task or a task you are doing for the first time. This helps enormously in terms of evaluating where you are spending too much or not enough time and in budgeting your time and energy.

For example, if you know that a project will take you 18 hours to complete, and you only have two hours a day to focus on that project, you will be less likely to promise it will be completed in just a few days. If someone tells you that it must be done in a few days, you will have to back off on other projects, work overtime or do lower quality work. You need input from your manager on which course to take.

If you are managing people, you should create your own documentation of how long things actually take to get done. Don’t ask your employees to document this for you as they will feel threatened and might be prone to lie to prove their efficiency. Rather, on an informal, observational basis, figure out how long it is taking people to get things done, who is working overtime, etc. It is your job as the manager to make sure people are spending their time effectively and that people are not burning out from overwork.

If you think you might be the perfectionist boss, here are a couple of things to keep in mind:

1. You don’t have to be the best at everything to be the boss. Some of your employees could have better skills than you do in certain areas. You need to avoid the competitive perfectionist tendency and take comfort in the fact that you were chosen to be the boss. Being the boss involves more than just being functionally good at something. Don’t sweat it if your employee has to correct you on something.
2. Setting unrealistic expectations for the work of your team is harmful to you and your employees. No one can keep up with the mental strain of so much perfectionism. People will respect you more if you say, “I would really like to get Project Z done in two weeks but there are a lot of factors there beyond my control. Planning for that deadline might not be realistic.” or “I can get Project Z done in two weeks but I will need to spend some money for extra help or we will have to stop our work on Project X.” If you are unwilling to set these expectations, you will need to plan for employee attrition and even your own eventual job change due to burnout.
3. Be generous with praise and careful with criticism. If you can’t stop yourself from compulsively correcting everything everyone does for you, at least have a sense of humor about it and encourage your team to have a sense of humor about it too.
4. Accept that you will make mistakes and so will people who work for you. It is better to manage to allow for some mistakes that you will have to answer for as a boss than to manage to prevent any mistakes. A good boss appropriately prioritizes the areas where mistakes can be tolerated and the areas where they cannot and communicates these priorities. A good boss also remembers the positive more than the negative and has a ready list of why each employee and the team is valuable.

Have you struggled with perfectionism at work? Please share in the comments. Back on Wednesday with Ruly Ruth!

William-Adolphe Bouguereau (1825-1905) - Maternal Admiration (1869). Image from the WIkimedia Commons.

We know from our prior discussions of perfectionism that perfectionism has genetic and environmental components. Because personality is thought to develop during childhood, the interactions between parents and children have an important impact on the forming personalities of young children. By examining the parent-child dynamic we also gain insight into the possible roots of our own perfectionism.

The parent-child relationship is prone to perfectionism problems. The natural tendency is to focus on transmission of perfectionist tendencies from parents (especially mothers) to children. We don’t need a scientific study to know that many parents see an opportunity in their children to live their own lives anew, perfecting any mistakes the parents made. When children make mistakes, some parents internalize these mistakes as their own mistakes and blame themselves rather than developing an appropriate distance to realize that the child is a completely separate personality. We also know that good parents have the best intentions for their children and want their children to have the best opportunities and lives with less struggle and more joy.

Rather than lay yet more blame on already guilty-feeling parents, however, I would like to focus this discussion along two themes: 1) what are the environmental triggers that tend to result in perfectionism in children and 2) how can you help a perfectionist child cope with life?

Avoiding Perfectionist Parenting

There is not one sure-fire formula to raise a child with a healthy perspective on perfectionism but it appears that one of the most important things you can do for a child is to avoid any messages of conditional love. Children should never be made to feel that you love them only when they are successful and that you feel less toward them when they are struggling or have failed.

Concern with mistakes. . . . It is the element of perfectionism most linked to psychopathology. And it comes about because a child has been made to feel that approval is contingent on performance.

The conditionality of love doesn’t have to be stated. It can be communicated in simply “the way the whole environment is structured,” . . . “If the parent is enthusiastic only when the child accomplishes something or spends a lot of time working at something, then it’s unspoken yet demonstrated by the environment.” . . .

The truly subversive aspect of perfectionism, however, is that it leads people to conceal their mistakes. Unfortunately, that strategy prevents a person from getting crucial feedback—feedback that both confirms the value of mistakes and affirms self-worth—leaving no way to counter the belief that worth hinges on performing perfectly. The desire to conceal mistakes eventually forces people to avoid situations in which they are mistake-prone.

–Hara Estroff Marano, “Pitfalls of Perfectionism,” Psychology Today. (This is a wonderful article and is really worth the click-through. Lots of great information on parenting strategies for healthy kids.)

As you can see, it apparently means as much or more to children to say, “I love you” or “You’re great!” when they have failed or when they have done nothing particularly special than when they are successful.
Some studies show that the influence of the same sex parent (mother-daughter, father-son) is the most important in terms of perfectionist tendencies.  However, some authors have noted that either perfectionist parent has a huge impact on their children. More from author Mary Edwards Wertch’s book, “Military Brats: Legacies of Childhood Inside the Fortress,”:

“From the beginning, Georgia remembers, her father labeled her ‘disobedient.’ Always critical of her, be began to harass her about her weight when she was ten years old. It became the central issue of their relationship. . . . He imposed strict regulations on Georgia and supervised her himself, even to approving the contents of her lunch box. Most nights she was not permitted to join the family in dessert. On holidays when candy was given, hers was rationed. There were special exercise programs which he designed and oversaw. And her father weighed her every three days.”
. . .
A son of a Navy commander relates:
“My dad was a perfectionist; he couldn’t make mistakes. At Christmas, Dad wouldn’t let us decorate the tree, because it had to be perfect. He laid the tinsel on one at a time; he’d let us put the Christmas balls on the tree, then we’d go to bed and he’d put the tinsel on. I remember once I got up and he’d moved all the balls, because they weren’t in the right place.

–Mary Edwards Wertsch, “Military Brats: Legacies of Childhood Inside the Fortress.”

While we might think these parents are extreme examples or rare, when you look closely at yourself as a parent, you will be sad to find examples of your own perfectionist behavior. For many parents, the issue is academic success, demanding excellent grades. Others may choose sports, popularity or appearance. Knowing how much self-worth children derive from their parents’ approval, it is a warning to us all to be very careful with the messages, intentional or unintentional, we are sending to our children.

Raising the Perfectionist Kid

We also know that because perfectionism has a genetic component, some kids will become perfectionists regardless of how non-perfectionist their parents are. What can you do to help the perfectionist child develop a sense of balance?

The National Association of School Psychologists has developed a wonderful parent/teacher handout on “Children and Perfectionism” which you can read here. Some of the suggestions (excerpted below) are a little surprising:

• encourage becoming comfortable with uncertainty and ambiguity.
• model and encourage graceful acceptance of your own mistakes.
• have the student sign a “contract” not to be perfect: sleep late, get a “B,” etc.

–Virginia Smith Harvey for the National Association of School Psychologists, “Children and Perfectionism.”

Delving into the subject of parent-child perfectionism is not easy and forces us to confront our own mistakes and the hugely important role we have in shaping the lives of those around us. These lessons could also be applied in the work context and on Monday we will explore exactly that.

Have a great weekend!

The discussion of perfectionism this month is not just limited to personal traits displayed at home. Perfectionism has broad impacts in professional settings as well. Two such industries are professional sports and occupations involving life and death decisions, such as law enforcement and the military. The results of extensive research in these areas suggest that even in the professional context, perfectionism has to be closely monitored and, if left out of control, can have damaging effects.

Professional Sports

Army-Navy Basketball Game. Image from the Wikimedia Commons.

There is probably no industry more concerned with perfectionism than professional sports. Athletes have to maintain an extraordinary level of achievement and their physical performance is often linked to significant monetary impacts for themselves, their teams and their sponsors.

A whole field of sports psychology that is devoted to exploring what motivates professional athletes to excel in their respective sports. While there are many studies of perfectionism in sports, one key study by a team of European researchers (Oliver Stoll, Andreas Lau and Joachim Stoeber), found that perfectionism in sports has benefits.

[A]thletes with both high levels of striving for perfection and high levels of negative reactions to imperfection showed the greatest performance increments over the series of trials.

The findings suggest that perfectionism is not necessarily a maladaptive characteristic that generally undermines sport performance. Instead, when learning a new training task, perfectionism may enhance performance and lead to performance increments over repeated trials.



–Abstract, “Perfectionism and performance in a new basketball training task: Does striving for perfection enhance or undermine performance?,” Oliver Stoll, Andreas Lau and Joachim Stoeber

Based on this type of research, you might expect trainers and coaches to start developing a breed of uber-perfectionist athletes, satisfied with nothing less than perfect performances. However, you may be surprised to learn that almost no one takes this view. Experience has shown many coaches and trainers that perfectionism has its limits. For a few perspectives in this area from a variety of sports, see below.

There are some advantages of perfectionism such as having a strong work ethic, commitment to your goals, and a willingness to learn and improve, which often disguise this mental roadblock to success. It can also help you achieve a few goals quicker.

However, I find that perfectionism presents more disadvantages than advantages when you enter into competition.

–Lai Yin, “Don’t let Perfectionism in Golf be your Mental Trap,” Mind Your Golf Blog

With the expectations of perfection a runner will train harder and longer, both of which are fantastic, but there will come a point of greatly diminishing returns. Overtraining can set in and chronic fatigue, both mental and physical, leads to lower levels of performance and a reduced capacity to train. How does the perfectionist respond to the fatigue and poor performance? He or she reverts to what gave them success in the first place, that being train more and train harder. Rest is not an option because rest means you are not working toward getting better, and for the perfectionist, that can lead to a high level guilt.



The running perfectionist will tend to blame themselves personally for every poor workout, every poor race and every sluggish recovery run. At some point the running perfectionist begins to tie their self-image and self-worth to their running. As result, poor performance equates to the perfectionist being a poor person, at least in their mind. Because their self-concept is so closely tied to running they begin to have high levels of fear of failure.



Even when the running perfectionist does run well, they don’t really enjoy it. Nothing is ever good enough and there doesn’t seem to be any level of satisfaction. The perfectionist must do even better. The pressure of perfectionism robs the runner of enjoyment from running and makes them feel miserable no matter how their running is going.



–RunOhio, “Perfectionism: A Recipe for Disaster”

In my own bodybuilding career, my aim has changed from a perfectionistic, Lombardi-inspired “winning is everything” attitude to “competing against myself.” My goal is no longer first place. I don’t care who I beat or who I lose to. I really don’t even care if I get a trophy anymore. My goal is to be better than I used to be. Every time I step onstage, if I look the best I have ever looked, then I’ll feel like a winner no matter where I place.

–Lori Braun, “Quest for Perfection. Desirable or Unattainable?” FemaleMuscle

Roger Federer was an obsessive perfectionist when he was younger and often “self-destructed” during matches. His biography, The Quest for Perfection, explains how Roger’s game suffered from his constant desire to hit perfect shots, and how he later changed his way of thinking to focus on more realistic expectations.

–Tomas Mecinger, “Perfectionism in Tennis,” TennisMindGame

One bodybuilding coach even advises taking individual personality traits into account when designing a training program. For perfectionists, the following training methods are advised:

• Design a program that emphasizes small, achievable, attainable, goals. Encourage contentment upon completion of these smaller goals. The perfectionist individual should be happy with what they have achieved, not unhappy with what they have not.
• Encourage team sport, to teach the value of teamwork to absorb the stresses associated with perfectionism.
• Factor in relaxation techniques such as meditation and visualization.

–David Robson, “How Your Personality Affects Your Training,” bodybuilding.com

Being a good coach, trainer or athlete therefore requires one to strive for enough perfection to improve skills but not so much as to impede performance through fear of failure, overtraining and lack of rest.

Public Safety Professions

Immigration and Customs Enforcement Officers. Image from the Wikimedia Commons

Other industries concerned with perfectionism are the public safety professions, particularly law enforcement and military organizations. How does perfectionism manifest in these professions? In public safety professions, there is a bright line test for success and failure, i.e. life and death. The consequences of failure are permanent and emotionally fraught. Therefore, avoiding failure is essential for self-preservation, team or unit preservation and achievement of your professional obligations. It is not hard to see why perfectionism is a problem in these professions.

Dr. J.R. Slosar who has studied perfectionism in law enforcement officers provides the following additional insights into the problem.

Police officers are expected to be in control and can develop a constant need to be in control. . .

Socially prescribed perfectionism, involving high and unrealistic standards from others can be inherent in law enforcement work. . . .

Another aspect of perfectionism that develops from feelings of intense self-scrutiny and high standards and expectations is an attitude of competition. The competition is a result of intense self-criticism and criticism of others, often not overtly expressed or seen, and channeled instead into competition. An important question is if law enforcement training breeds and fosters competition in trainees and then reinforces an aspect of perfectionism. Through competition, the intensity of perfectionism and over-achievement is heightened, resulting in some trainees who become “rising stars” by winning the competition battle. Placed on a pedestal as a winner, an experience of failure can literally lead to a dramatic fall and demise.

–J.R. Slosar, Ph.D., “The Role of Perfectionism in Law Enforcement Suicide,” Presentation to the FBI Symposium, September 23, 1999. In: Law Enforcement & Suicide, ed. By Sheehan & Warren, FBI Academy, Behavioral Sciences Unit, Quantico, VA., 2002, p. 539-49. Dr. Slosar is also author of the recently published book, The Culture of Excess.

Apparently, the pressure to be perfect is so intense among law enforcement officers that any experience of failure can trigger suicidal tendencies! Dr. Slosar suggests that the demands of the profession may require that law enforcement candidates be screened for perfectionist tendencies on application to the profession.

Taking a perspective from the outside looking in, law enforcement can . . . prescreen for perfectionism and attempt to screen out or re-interview persons who bring a high perfectionism factor to the job. Certainly bringing perfectionism to the demanding job environment puts one at greater risk for suicidal behavior in the future.

–J.R. Slosar, Ph.D., “The Role of Perfectionism in Law Enforcement Suicide,” Presentation to the FBI Symposium, September 23, 1999.

It should be hardly surprising that a culture of perfectionism also permeates our nation’s military forces. As author Mary Edwards Wertsch writes in Military Brats: Legacies of Childhood Inside the Fortress:

[T]he authoritarian military requires perfection of its members–in part as evidence of total compliance to the demands of authority– and the individual careerist reinforces this programming with personal ambition. The combination makes for extremely powerful conditioning.

–Mary Edwards Wertsch, “Military Brats: Legacies of Childhood Inside the Fortress”

So again, we see in public safety professions that there is a limit to the benefits of perfectionism. Perfectionism motivates high standards of physical fitness and achievement and helps diverse groups cohere. Too much, however, results in severe personal disappointment with the occurrence of any type of failure, to the point of suicidal tendencies and self-harm.

Learning from Athletes and Public Safety Professionals

What lessons can you learn from the above discussion?

1. If you are in a situation where perfectionism is required, do your best to encourage team rather than individual efforts to share the burden of perfectionism and give yourself adequate time for rest and relaxation.
2. Prepare for inevitable failures. Know what to do to mitigate damage and how to recover mentally and physically.
3. If you struggle with keeping your perfectionism in the healthy range, be very careful of putting yourself or loved ones in situations where perfectionism is prized. The mental strain can be too much. Professions or situations where individuality is prized over standardization may be a better fit.

Are you in a profession that values perfectionism? Please share in the comments.

All this month, we have been discussing perfectionism, its advantages and its crippling effects when misapplied. Last week, I reviewed Dr. Alice Domar’s book, “Be Happy WIthout Being Perfect.” Today, I am discussing a book that road tests the opposite approach, “Be Happy By Being Perfect All the Time.” Of course, the book is not actually called that. The book is titled, The Happiness Project by Gretchen Rubin.

Ms. Rubin to date has had an impressive life. She grew up in Missouri and attended Yale University and Yale Law School. Ms. Rubin not only was the editor of the Yale Law Review but also went on to become a law clerk for Sandra Day O’Connor at the U.S. Supreme Court. She met her husband, James Rubin, (the son of Robert E. Rubin, former Secretary of the Treasury) at Yale Law School. Their wedding was written up in The New York Times and they currently live in New York with their two young daughters.

It’s a pretty perfect sounding life, eh? Apparently not perfect enough. Ms. Rubin, after achieving the pinnacle of legal education and training, decides to leave law for the pursuit of writing. Her first projects included biographies of Winston Churchill and John F. Kennedy as well as a thoroughly researched manual on the good and evil practices of those who become very successful! It was very brave indeed to take on these high-profile subjects. Her books were fairly well received but, not surprisingly, those who have devoted their lives to the subjects she chose had some claws out for her.

At this point, even though she has a fairly good start going as a writer, Ms. Rubin still is dissatisfied and creates a new book, her most successful yet, The Happiness Project. The book is about Ms. Rubin’s search to become “as happy as I should be.” Ms. Rubin spends an entire year of her life focusing on a new theme each month trying to make her life “happier.” The monthly topics include “Remember Love,” “Aim Higher,” “Be Serious About Play,” “Contemplate the Heavens” and “Buy Some Happiness.”

Ms. Rubin is an extremely intelligent person who can probably out-research any of us on any subject. She is the Martha Stewart of research. She also writes clearly and has a talent for coming up with marketing catchphrases that she sprinkles throughout the book, like “Twelve Commandments,” “Secrets of Adulthood,” and a series of “Splendid Truths.”

You can definitely learn something from the myriad research topics in this book.  However, one can argue that a lot of what is presented in The Happiness Project is a method of distracting your focus on things that trouble you through perfectionism.

My first complaint about Ms. Rubin’s approach is that it does not require a person to be brutally honest with themselves. The examples below could be interpreted one of two ways.  One,  Ms. Rubin could be sugarcoating her current situation and hiding it in some legalese. Or two, Ms. Rubin might be demonstrating the perfectionist tendency to make uneven comparisons or have unrealistic expectations.

Another classic perfectionist sign is Ms. Rubin’s statement of approval/validation hunger:

“One of my worst qualities is my insatiable need for credit; I always want the gold star, the recognition.”

–Gretchen Rubin, The Happiness Project

One could argue that the the whole concept of The Happiness Project is an exercise in external validation, with Ms. Rubin consulting every source beneath the sun on the “perfect” way to do every action.  The phrase “Studies show . . . ” appears in this book probably 500 times. There is so much research it starts to become comical. I hope that passages such as the following were really supposed to be comical and not serious, but I am not so sure.

“[Jamie and I] hugged – for at least six seconds, which I happened to know from my research, is the minimum time necessary to promote the flow of oxytocin and seratonin, mood-boosting chemicals that promote bonding. The moment of tension passed.”

–Gretchen Rubin, The Happiness Project

I don’t think Ms. Rubin has failed to find happiness because she doesn’t know how but rather because she doesn’t want to do what it would take to really make her happy. There is enough evidence in this book to suggest to me that the real source of Ms. Rubin’s unhappiness is her relationship with her husband.  The following connections were particularly interesting.

The February chapter focusing on their marriage is full of very strange mental gymnastics where Ms. Rubin tries to forget any disappointment she feels about anything Jamie does. Ms. Rubin even has a goal for perfecting the quality of their fights. “I wanted to be able to have fights [with my husband] that were more fun, where we could joke around and be affectionate even while we were disagreeing.” If you are a couple who “fights” like this, I would like to meet you. I suspect you don’t exist!

You can view more fighting tips, from the author herself, at her YouTube channel.

At first I questioned whether I was reading too much into this troubled marriage theme and whether my weakness for gossip was getting the best of me. My suspicions were not eased, however, when Ms. Rubin decided to write a novel in month nine, picked the subject of “two people having an affair in Manhattan“ and titled it (I kid you not) Happiness.

So, while I can’t say for sure what exactly would make Ms. Rubin happy, I think it is fairly clear that all of the extracurricular activities she pursued did not really contribute in any significant way to her happiness. They might have improved her life in various ways but at the end of the day, the test of this book is, “Does Ms Rubin feel like the happiest person alive? Has Ms. Rubin achieved the perfect level of happiness?” You will need to read it yourself to judge the answer. Interestingly, Dr. Domar’s book has a quote from Mehmet Oz, M.D. on the cover that says plainly, “Perfection is the enemy of happiness.”

Why have I spent so much time talking about a book whose fundamental concept I am not sure I agree with? Because it is a very brave and very honest account of how an extreme perfectionist views the world.

1. Self-blame for all imperfections.
2. Black-and-white, “perfect or nothing,” “my way or the wrong way” thinking. I was disappointed, for example, when Ms. Rubin rejects immediately the helpful suggestions of her friends, preferring her own methods. One suggested Ms. Rubin explore therapy to help discover her inner motivations and another suggests meditation during Ms. Rubin’s experimentation with “mindfulness.” Ms. Rubin explored neither.
3. Unrealistically high expectations (even for happiness!)
4. Routine/fear of change.
5. Fear of losing control. Famously, in order to dance uninhibited to music, Ms. Rubin has to have her entire family leave the house and the blinds closed!

There are a few hints that Ms. Rubin wants to work on her perfectionism but mostly you get the sense that she wants everyone else to accept her perfectionism or maybe even to become just like her! If you have a perfectionist in your life, this may be the book you need to read to get some insight into the perfectionist thought process.

This book has numerous opportunities to be screamingly funny but you get the sense that Ms. Rubin sees no humor in all that she has done. Ms. Rubin’s version of happiness does not seem to involve mirth, glee, or big belly laughs. It is rather an effort to be happy in academic sense . . . seriously (very seriously) happy.

Can perfectionism solve unhappiness? Please share in the comments.