A few days ago, I was reading the excellent leadership book The CEO Next Door by Elena Botelho and Kim Powell, which basically takes the same core idea behind The Millionaire Next Door (lots and lots of interviews and surveys) and applies it to leaders and their leadership skills rather than millionaires and their financial skills. It’s very good and I’m getting a great deal of personal value from it, but there was one passage that really spoke to me in terms of personal finance that I want to talk about today.

On pages 48 and 49, the book gets into the ideas of aspirational intent and transactional intent.

Aspirational intent refers to our “big picture” intentions in life. I intend to be a good father and a good husband and a good man. I intend to reach a state of financial independence as early as I reasonably can and then enjoy a simple life with my wife and my grown children and (perhaps) my grandchildren. I intend to live a healthy lifestyle. I intend to find ways to help local charities get maximum value out of their meager budgets. I intend to write a novel sequence that I’ve been turning over in my head for years and years. I could actually write a lot of “big picture” intentions for my life. Some of those intents overlap, and some of those intents might contrast with one another.

Transactional intent is different. Transactional intent is our intention in a given situation. If I sit down to eat, what is my intent with that meal? If I go to the store, what is my intent with that visit?

Well, there are actually a lot of transactional intents I could have at the dinner table. I might intend to have a great conversation with my wife and my kids. I might intend to thoroughly enjoy the gastronomic quality and the flavor of the food that’s been prepared. I might intend to eat small portions of the healthiest items until I no longer feel hungry. Some of those intents can overlap, and some of those intents might contrast with one another.

Similarly, I might have a number of different transactional intents at the store. I might intend to figure out what to have for supper that night and buy the ingredients for it. I might intend to just follow this grocery list in my hand because it matches a meal plan I already have at home. I might intend to buy an item or two spontaneously, for the fun of it. Again, some of these intents can overlap, and some of these intents might contrast with one another.

In their book, Botelho and Powell make the key point that success is usually found when you can bring aspirational intent and transactional intent into alignment. That’s actually trickier than it might sound.

As a person, I have a number of different aspirational intentions, as I listed above. Good father, good husband, good man, healthy person, virtuous person, financially independent person, charitable person, novelist… and other things, like simply enjoying some pleasures in life.

As you’ve seen, most life situations present a bunch of different transactional intentions, too. I might buy things as a result of planning, as a result of necessity, as a result of desire, as a result of spontaneity, as a result of social pressures, and many other things.

The key is to have a transactional intent that lines up with a key aspirational intent, as often as possible.

Take a visit to the grocery store, for example. My transactional intent when I go there is to get healthy food for the week for me and my family at a low cost. Makes sense, right? That approach ticks off the “good father” and “good husband” and “healthy person” and “financially independent person” aspirations that I have.

How can I “get healthy food for the week for me and my family at a low cost”? Well, for me, my strategy for doing that is to shop at a discount grocer (financial aspiration), to make a meal plan at home before I leave (financial, marital, and parental aspiration), to choose healthier meal options that ideally everyone will still like (health, marital, and parental aspiration), and to buy store brand items and items on sale when I can (financial aspiration).

What doesn’t fit in there is an impulse buy at the store. It’s usually something unhealthy (literally working against my healthy aspiration) and it’s an extra cost (working against my financial aspiration). So why do I do it?

The thing is, we all have less obvious intents, both aspirational (big picture) and transactional (little picture). For example, I appreciate tasty food – it is a very, very, very secondary aspirational intent (to try interesting foods) but I allow it to become much more important as a transactional intent. I want a yummy, so I eat it, even though it’s completely in opposition to an important aspirational intent (to eat healthy).

Putting some junk food in my cart is a moment where my transactional intent (get something yummy!) is out of alignment with my major aspirational intents (eat healthy, seek financial independence).

In fact, it’s those moments when our aspirational intents and transactional intents are out of alignment that cause us to get into trouble. We truly aspire to be financially independent, but we spend our money frivolously and our professional time isn’t used to further our careers. We truly aspire to be healthy, but we skip exercise and eat unhealthy foods. We truly aspire to succeed in school, but we don’t bother to study and skip class sometimes. Our aspirations point one way, but our transactions in the moment point another way, and we feel lost, like our lives aren’t going anywhere.

How do you break through this? If part of our financial problem (and problems in other areas of life) are due to our aspirational intent and our transactional intent pointing two different ways, what do we do about it?

The book’s answer is pretty close to my own answer. It comes down to reflection and preparation.

If you have a situation in your life that just occurred where you felt like your aspirational intent and your transactional intent were out of alignment, stop and reflect on that situation. One tool I really, really like to use is called the after action review, which consists of four parts.

First, state what you wanted to happen. If everything had gone perfectly and everything had been in alignment, how would that situation have gone?

Second, acknowledge what actually happened. What actually happened instead? What was different than what you ideally wanted to happen? Why did you spend so much when you didn’t intend to spend anything at all?

Third, learn from the experience. See if you can figure out why those differences occurred. Was it because of the location? The time of day? Did you put yourself in a position where one particular aspiration was shouting really loudly (like when I go to the grocery store on an empty stomach – THIS IS A BAD CHOICE!)?

Finally, adjust your behavior. What can you change to make sure that the reasons why you deviated from what you wanted to happen don’t occur again. For example, this type of thinking is why I don’t go to the grocery store on an empty stomach; I tend to at least eat a snack when I’m getting ready to go to the grocery store. There are many, many other little life tweaks that I’ve adopted because of this kind of after action review.

The second tool that’s really useful for getting aspirational (big picture) and transactional (in the moment) intent into alignment is preparation. If you see an event coming, even something as simple as a family dinner, think to yourself about what your goal is for that meal. What are you wanting to ideally get out of it?

For example, when I think ahead to my family dinner this evening, I want to have a good conversation with everyone while eating just enough of the relatively healthy stuff on the table so that my hunger is sated. That’s my goal with most family dinners, actually. It brings my transactional intent in line with my aspirational intent (be a good father, be a good husband, be healthy).

I actually envision that family dinner a bit, picturing myself eating just a little bit and having a good conversation with everyone, and I find that the process actually guides me quite nicely toward actually achieving that vision, more often than not.

Another aspect of preparation is making sure that you actually understand your aspirational intents and have them in order. What do you actually want out of life? How do various things really rank in importance in your head? When does your job trump your family, and vice versa? When is it okay to eat a really unhealthy meal? When is it okay to splurge on something expensive?

The time you invest in thinking about conflicts between your aspirations, the easier it becomes to make good choices in the moment because all you have to worry about is making sure your aspirational intent and transactional intent are the same without needing to worry about various different aspirational intents. Get your goals straight, my friend!

For the last week or so, I’ve been using this framework as much as possible to try to shape the ordinary things that I’m doing. I think about what my intent is with each action that I take and how it lines up with my big life goals, and I’m finding that doing this makes it a lot easier to make choices where my actions today line up with my big goals tomorrow.

It’s all about the intent. What are you intending to achieve with your actions?

Good luck!

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