Read Time: 4-minutes
Happy New Year,
Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.
Table of Contents*
*Clickable in theonline version.
Point #1 — Your Money & the Rise of Momofuku
“When the now world famous chef David Chang opened the now world famous Momofuku, he didn’t have enough money to put a wall between this kitchen and his diners.
But of all the variables that contributed to Momofuku’s rise, the open kitchen was the most important.
‘Cooking in front of my customers,’ Chang wrote, ‘changed the way I look at food.’
He got to watch what people did after tasting his food. Their facial and physical reactions signaled which recipes were working and which weren’t.
This feedback led to Chang’s iterating and improvising until he landed on dishes so good that word spread so much that daily, the line is out Momofuku’s door.”
It's fascinating that what could have been perceived as a constraint, ultimately became Chang's secret sauce. It's another reminder that we can view things in ways that can turn liabilities into assets.
Chang's financial "limitation" allowed him to harness a simple, but powerful construct:
Feedback loops.
Or a process where results of an action(s) influence future actions to influence future results. Essentially:
Cause → Effect → Response → New Cause
Chang was close enough to see what was working in real time.
The problem with simple ideas is that we can easily dismiss them as too basic.
But as Charlie Munger put it:
“Take a simple idea and take it seriously.”
And in personal finance, feedback loops might be the single most important mechanism for getting the most out of your money.
The problem?
Many people treat opening their bank statements or credit card accounts like opening bills from the IRS. They dread it and avoid it. Because they’d rather not know.
And that dread kills the power of the feedback loop (more on this in Point #4). So let’s reframe this entirely:
Instead of giving yourself "credit" for perfect spending or docking "points" for impulse buys, consider giving yourself credit for executing the process of creating and completing the feedback loop itself.
Opening your accounts isn’t about judgment — it’s about collecting data so you can improve.
Chang didn’t watch diners’ faces to feel bad about the dishes that “flopped.” He watched to learn what to make more of and what to stop making.
That’s the mindset shift that makes feedback loops powerful instead of painful.
So, as you look forward to a new year, consider ditching the resolutions that fail 90%+ of the time. Instead, let's look at 3 action steps to establish feedback loops you can start today that will allow you to enjoy your money more in 2026.
Point #2 — 3 Action Steps for 2026
Here's how to build feedback loops that actually improve your finances in 2026:
Action Step #1: Establish Your Baseline
To check your progress, you need a starting point.
A great figure to begin tracking is your net worth. “Net worth” might sound a little intimidating, but it’s a simple formula:
Assets minus Liabilities equals Net Worth.
You can use free online tools, a simple spreadsheet, or even a piece of paper. The tool doesn't really matter. What matters is capturing your first data point, so you have a baseline for comparison.
Action Step #2: Identify Your “High-ROI” Spend Items
Next, let’s work on your spending feedback loop. Specifically, let’s identify the spending that brings you the most value.
Consider pulling your last few months of bank and credit card statements and skim through to see which purchases you enjoyed the most. You can even score some that stick out if you’d like.
Examples:
Weekly coffee with friends: 9/10
Unused gym membership: 2/10
Concert tickets: 10/10
Impulse Amazon purchases: 4/10
Dinner at that restaurant you love: 9/10
Subscription you forgot about: 1/10
Now ask yourself: are there ways I could rearrange my spending so I can spend more on my favorite items?
Action Step 3: Calculate Your Important Ratios:
Next, let’s calculate what percentage of your income goes to:
Fixed costs (housing, utilities, groceries, insurance, debt payments)
Flexible (dining out, entertainment, travel, shopping, subscriptions)
Savings (retirement contributions, emergency fund, investments)
A good benchmark is the 50/30/20 mix: 50% fixed costs, 30% flexible, and 20% savings
Your Move: Consider blocking out 30 minutes this week to complete all three steps. Establish your net worth baseline. Identify your High-ROI spend. Calculate your important ratios. By the end, you’ll have started feedback loops for your net worth, maximizing your spend, and your mix of spend.
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Point #3 — “I dread looking at my finances…”
“Hi there, I’ve been doing my own budgeting off and on using an app called Monarch. Despite paying for the app and it being incredibly helpful and intuitive, there’s still such a big part of me that dreads and even fears sitting down and taking a look at my finances. Lots of feelings of guilt, fear, and overall just wanting to get it out of the way. Same goes for listening to anything personal finance related; this [subreddit] has helped a LOT, but I still fall back into dread and worry related to money.
I’d like to change the relationship I have around money and want to approach it with a sense of curiosity and gratitude that I have it, rather than fear I’m spending too much or I’m too needy of a person to want creature comforts and new clothes here and there. Anyone else run into this, and have you found levity from these challenges?
Did you catch that? This person has one of the most popular budgeting apps available. They're paying for it. They know it's helpful. And they still dread opening it.
Never underestimate the mental side of money.
One of the biggest obstacles to completing your feedback loop isn't the spreadsheet or the app or complexity. It's the negative emotions that you feel the moment you think about looking at your finances.
Guilt. Fear. Dread. The feeling that opening your credit card statement is like stepping on a scale after the holidays. You know you need to look, but you'd rather avoid it entirely.
This is exactly where the reframe from Point #1 helps.
Instead of overly focusing on whether you perfectly hit your spending plan, start giving yourself credit for going through the process. These are the kinds of wins to give yourself credit for:
Did you open your accounts? That’s a win.
Did you calculate your spending ratios? Win.
Did you establish your 2026 net worth baseline? Huge win.
When you shift your mindset from "I need perfect numbers" to "I completed the process," you can feel optimistic about facing your finances — no matter what.
Your net worth might be lower than you hoped. Your fixed costs ratio might be at 65% instead of 50%. Your savings rate may still be in the single digits.
None of that changes the fact that you showed up and looked at the data. After that, you can formulate small, achievable action steps to improve on your results.
That's the mindset and approach that can lead to better outcomes. To a more enjoyable relationship with money.
Point #4 — 3 Causes of Failed Feedback Loops
In the spirit of inversion, or positioning yourself for success by first avoiding failure, it would be wise to explore the common reasons that cause feedback loops to fail.
Bestselling author of Atomic Habits James Clear explains:
“One bad habit that commonly frustrates physicians is when a patient doesn't take their medications as frequently as prescribed. A few years ago, a company called Vitality launched a new product called the GlowCap, which was intended to help solve this problem.
Here's how WIRED Magazine described the product:
‘The device is simple. When a patient is prescribed a medication, a physician or pharmacy provides a GlowCap to go on top of the pill bottle, replacing the standard childproof cap. The GlowCap … connects to a database that knows the patient’s particular dosage directions—say, two pills twice a day, at 8 am and 8 pm. When 8 am rolls around, the GlowCap and the night-light start to pulse with a gentle orange light. A few minutes later, if the pill bottle isn’t opened, the light pulses a little more urgently. A few minutes more and the device begins to play a melody—not an annoying buzz or alarm. Finally, if more time elapses (the intervals are adjustable), the patient receives a text message or a recorded phone call reminding them to pop the GlowCap. The overall effect is a persistent feedback loop urging patients to take their meds.’
—WIRED
When feedback loops fail, it is often because of one of these three problems:
Measurement isn't automatic.
Comparison is irrelevant.
Feedback is slow.
The GlowCap solves all three of these problems and that makes it an excellent feedback loop. First, it tracks your consumption and reminds you when to take your pills automatically, so you don't have to worry about measurement. Second, it is specifically tailored to your prescription, which makes it instantly relevant to your needs. Third, it provides feedback quickly when you get off track: first the light, then the music, and finally the text message or phone call. Solving these three problems is essential to building an effective feedback loop.”
Bottom Line: Invert your financial success in 2026 by making your financial feedback loop automatic, relevant, and timely. The 3 action steps in Point #2 are a great place to start to keep your efforts relevant. Consider adding a recurring 1-hour block to your calendar at the end of each month to make your financial feedback loop regular and automatic.
Point #5 — Quotes of the Week
Continuing the “Feedback Loop” theme, which of these is your favorite?
“We reflect upon that which we are about to do, and yet our plans for the future descend from the past.”
Point #6 — My Questions of the Week
What part of your financial routine do you look forward to? Is there any part you dread? Does giving yourself credit for going through the process make it more appealing?
Reply to let me know! I read every response.
Thanks for reading — I hope you found a helpful idea or two.
I’ll see you next Saturday with more.
Have a great weekend,
Benjamin Daniel, CFP®
Founder, Money Wisdom
P.S. Want to take control of your money, stop stressing about your expenses, & feel confident about your financial future? There are 2 ways I can help you:
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Disclaimer:
This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.
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