Kaizen is a Japanese business term that has been popularized in the United States, and it basically means “continuous, small improvements.” I recently read an excellent book on this topic, One Small Step Can Change Your Life: The Kaizen Way and immediately realized that Kaizen could be a great way to tackle improving our money management habits. Kaizen = baby steps.

The idea behind Kaizen is to break down a new habit—something you’d like to do better—into incredibly small steps. Each task should be so small, in fact, that you simply MUST do it. When you make tasks this simple, you also outsmart your own nervous system. Tiny improvements are so non-threatening that you don’t raise your anxiety level about them and quit—which is what often happens with money challenges.

Putting Kaizen into use

So how might you use Kaizen in your family’s money system? I’ll give you an example from our family. We need to choose a new electronic money management system—either online or in the form of software. This greatly stresses me out. As a result, I’ve been avoiding researching it—I’ll research it a little, then quit because I’m nervous about making the change.

My husband and I decided to break it down into smaller steps. We already talk together about money once a week, so the first week, we simply talked about the need for a new program, including why our old system wasn’t working and what we thought we needed. We purposely stopped our discussion there instead of getting into a convoluted conversation and then immediately going online to research other systems. Our next steps:

The second week: We did some online research about the best budget-tracking programs and picked three to consider.

The third week: We looked at one new program. We read its online description and looked at the FAQs or tutorials, paying attention to a couple of program features that are particularly important to us.

The fourth week: We repeated the process with the second new program.

The fifth week: We did the same thing again with the third new program.

We haven’t yet picked our new financial program, but giving ourselves permission to research it slowly and consistently has paid off. We haven’t thrown in the towel or stopped looking into new programs as we might have in the past, when we tried to do too much, too soon.

Think about your own financial challenges. If you’re trying to cut what you spend on groceries, for instance, make a tiny initial goal. Try to save just 1 percent on your weekly shopping trip. If you normally spend $150 on your weekly food haul, aim to save just $1.50. Who can’t do that, right? The next week, try for 2 percent. Keep going until you’ve saved 10 percent—or whatever you think is reasonable.

Another Kaizen key: Focus on one financial goal at a time. Stick with it and master it before you move on to something else. So in the grocery example, don’t try to both save dollars and start shopping at multiple stores for the best deals. Wait and work on cutting spending at your single store first. When you’ve mastered that task, consider trying an additional money-saving hack.

How might Kaizen work for you?

Teri Cettina is a mom of two daughters and freelance writer who specializes in personal finance and parenting topics. She blogs at Your Family Money. Follow her on Twitter: @TeriCettina.

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