The history of creativity and innovation suggests that many larger-scale transformations often start small. That's the theme of a book published a decade ago, "Little Bets: How Breakthrough Ideas Emerge from Small Discoveries" by Peter Sims.
He writes that the Google co-founders didn't set out to change the world, create one of the fastest-growing startups in history and revolutionize the way we search for information. The collaborators on the Stanford Digital Library Project wanted to figure out how best to prioritize library searches online. "You start small and you learn through the process," says author Peter Sims. "This is what creativity and innovation is all about."
A parallel idea comes from the goal-setting literature. Michael Kitces, publisher of the financial planning industry blog Nerd's Eye View, notes that financial planning often focuses on reaching big, long-term goals. The scale of our ambitions often means that we fall short.
The lesson, he writes, is to break down ambition into a series of smaller bites that cumulatively build on a series of wins and course corrections.
Sims and Kitces are dealing with different issues, but their insights share a similar framing or perspective to addressing a difficult problem:
Take small bites and little bets. Both highlight the importance of good data and measurements for their experimental approach.
In personal finance the data foundation is a household budget. There are plenty of budget resources to tap into.
The Consumer Financial Protection Bureau, the National Endowment for Financial Education and Lutheran Social Service offer budget worksheets. There are well-known apps like Mint and Pocketguard, while websites like Nerd Wallet offer articles with links to resources. Customers of banks and credit unions have access to online budget tools
