Are Systems More Important Than Exact Numbers?

Last week I wrote about why I’ve become less specific with numbers as I’ve gotten older. As I trust myself, my body, and even my relationship with music more, I keep track of exact numbers less.

Could this be true for the area of personal finance as well?

Numbers provide something objective to cling to when a task is new (or when the stakes are high and require intense monitoring). In many cases, however, systems may provide more comfort than exact numbers. 

Well-thought-out and effectively set up systems take some weight off the mind. Most of all, they do something numbers can’t. They provide scaffolding and parameters for more sustainable goals. For example, you can’t control the market, but you can control your savings rate.

The Forest For The Trees

I once read that you can count any item you own over $100 when calculating your net worth. (Head gears turning... Rugs? Furniture? Guitars? Microphones? Cloth diapers?) 

My ultimate reaction? No thanks. I don’t think I’ll bother to do that. If I really need a confidence boost, then maybe.

Otherwise, such counting is probably not a good use of my time (or a healthy way to look at our belongings).

I don’t plan on selling anything right now anyway. 

My point is - you don’t need a picture-perfect exact number on virtually anything in life to start moving in the direction you want to. 

Right now, I believe in looking at your net worth in different categories - the category where you count your belongings and the ballpark category where you don’t. A category where you count your house or cars (I use this category when I need a psychological boost) and a category where you don’t. 

Flexible thinking is a real savior. Sometimes it’s good to know how to measure a situation in a variety of ways. In one way, you can be super realistic with yourself on the road to a goal and in another way, you can celebrate little wins.

Trading In Precision For Ranges

I have a sense of what we spend on groceries each month (it’s our most out of control category). Every few months, I’ll check in to see if my intuition is on point (or off track).

During this check-in, an exact number may be helpful (but even this is rare). I often do the math in my head and use rounding. Mostly I ask - am I buying healthy things for myself and my family? Am I looking for deals?

If not much else can be done to squeeze efficiency without subtracting from basic enjoyment, my time, attention, and nack for detail are probably needed someplace else (like actually learning how to cook).

(This leads me to wonder, can expert cooks tailor a dish to their own taste by breaking the rules only after they’ve learned to master the rules? I would have no idea. My guess is they can afford to deviate from a recipe once they know the ins and outs of cooking. This concept of “inexactness gained with expertise” clearly cuts across disciplines. When I deviate from a recipe now… the outcome is disastrous.)

Remodeling Our House With Cost Ranges

Developing a sense of intuition with numbers is a skill that develops with awareness and time. 

We are going to remodel our back deck and two upstairs bathrooms within the next year. We have taken on several large remodeling projects before, but never with a little one running around.

This time, I want my husband to calculate how much time the projects will take him. (Yep! Haven’t thought of that one before!)

But first, he is adding up the big-ticket items (vanities, shower stalls, the roof off the deck, etc.) in order to form a range for each project. 

The low-end range is if we can find the majority of items used (or on Craigslist) and everything goes perfectly. The high-end range is for if things go terribly wrong (and no one within a 100-mile range is selling anything stylish.)

These futuristic ranges provide effective fodder for planning. They help guide us along the way but aren’t set in stone. They provide scaffolding for big-dreaming, small changes, and most importantly - living within our means.

Head Games: Daydream About Teabags?!

Reflecting on the faulty logic that informed my youth, it’s not surprising that I missed the larger vision of health and wellness by clinging to insignificant numbers and facts.

I don’t want this to happen to me with my money and creative projects as an adult.

I still find myself dazing off and calculating items in my head sometimes (like the cost of a daily teabag). Then I look around and sincerely wonder - what are others daydreaming about? Do other people have the meaning of life down pat or does their escapism involve a teabag too? Why do I care about the cost of a dumb teabag?!!! (It’s 19 cents btw, $69.35 a year - half that if you use the tea bag twice).

Brains can be ridiculous.

Still, I Like Numbers As an Audience Member

If you have a blog where you pubicly track numbers, I think such an approach offers something valuable. Specificity can provide insight into how others live, providing examples we may not have considered for ourselves. 

That being said, number ranges are a wise way to go for my personality type (vulnerable to lacking central coherence and getting hung up on small details).

How do I know this? Well, I’ve completely removed any concept about how much I exercise from how much I eat. And I'm healthier than ever. Fit bits, counting steps, counting calories, and even measuring my heart rate aren’t on my radar anymore. Given their very specific nature, they aren't good for me.

Instead, I think about how my dog needs exercise and I prioritize his enjoyment. This helps me get out of the house each day and has resulted in pretty great health.

An Afterthought

In so many areas of life so far, I’ve analyzed a topic to death by zooming in, forming an opinion, zooming out, and then operating like a normal human being again (minus the past obsession... and onto the new one).

This is just a personality characteristic (or personality flaw depending on who you talk to). Either way, it’s a mode of operating that has prompted an interesting relationship with numbers (since numbers are so inherent to the “zoomed in” phase). It seems everything - from my relationship to art to food to personal finance - operates with numbers in the background. I’m at a point where I want to “set it and forget it” in many areas.

Sometimes I'm aware of the numbers, oftentimes I'm not.

In both cases, I no longer bow to numbers to signal progress. I rely on habits, systems, and ranges more because I  can genuinely trust myself. 

Do you agree or disagree with this logic?

Do you think systems and ranges are more useful than exact numbers once someone has become familiar with a topic?

DISCLAIMER: AS ALWAYS, IF YOU NEED PSYCHOLOGICAL OR FINANCIAL ADVICE PLEASE SEEK A PROFESSIONAL FOR YOUR SPECIFIC SITUATION.

6 Replies to “Are Systems More Important Than Exact Numbers?”

  1. I really like the analog of the experienced chef and quantitative specificity in that once there’s a mastery, it may be unnecessary/counter productive to use measuring spoons or scales every time and might be even better to deviate from or modify it.

    I put this to the test last year when we had a lot money going every which way with the home build, asset allocation tweaks, and constantly shifting between our various accounts that it was far too time consuming to manage the details. So, for the first time ever, I just took my hands off the wheel related tracking with any sense of specificity. Like your teabags, I knew how much we spend historically in each category as well as fixed expenses so I just paid the bills. I also knew our behaviors didn’t change, so discretionary expenses wouldn’t likely change. As it relates to the house, I was keeping eye on the total expenses, but not at a detailed level like how much is the house/garage/studios each costing? In essence, I was not using any measuring cups and definitely deviating from my usual recipe. It was actually liberating, but weird at first. Only now, a year later, am I going back to assess the details and drill in on specifics, but purely for my own edification. Guess what? All the details are pretty much precisely what I had mentally estimated them to be, so it was a worthwhile exercise for sure and seems to be he norm carrying over into 2020.

    1. Thank you for sharing your very relevant experience. Your past history makes total sense. I think building a home would be incredibly anxiety-provoking in terms of money. I would probably watch purchases closely just as an anxious activity – which is what makes me think numbers provide some concrete reality when the world (or your life) seems out of control! Good for you that you were able to trust yourself and go with the flow of the experience. It’s insightful to think that you checked back a year later and things were about what you could have pulled off with exact measurement – which is a good lesson for us all. If the engine is working, I want to put my energy somewhere else instead of being detail-oriented in a way that doesn’t make a difference.

  2. i like to see enough mastery before someone decides to break the rules of improvise, but that’s just me. you mentioned cooking as an example. i think we now know enough in our house to tweak what we cook. every now and then an improvisation swings and misses.

    with regard to money i would start with systems. for instance: step 1. get on the right side of the ledger. we never calculated crap like savings rate but managed to get this far (which is pretty far). that stuff might have value for some but we were more concerned with getting the direction correct. the velocity was irrelevant. if you’re taking actions that are generally correct pretty consistently your results will be generally and consistently good.

    1. Good points Freddy. I swing and miss on plenty of things – creative and otherwise. I don’t think I’ll ever be an expert cook (or a creative one for that matter).

      I’m glad you are on the side of systems (it seems most people I’ve heard from are)! I like the way you put it – getting the direction correct matters more.

  3. With numbers, it’s a good starting point when you want to create a recipe. You follow the ingredients “to a T”. But once you get the hang of it, you can go off on your own and have a system where you can improvise in order to show your creativity. You can make up how much water, flour, etc.. you need and add in some extra ingredients on your own.
    I think it’s kind of the same with money. When you first start tracking your spending, you may want set a budget on how much you want to spend because of various reasons(cut down, save more) but once you have a sense of what your financials are you can start spending on whatever you want because you have an idea of what your numbers are and don’t need to micro manage it. For me, I care more about getting cash back/points on my credit cards than my spending because I know that I could cover it when the bill comes.
    Systems are important because you feel more at ease with yourself in that you’re not restricted by meeting a certain number. You create your own habits, routines, etc.. with the system you have.

    1. Sounds like some good reasoning Kris! Thanks for expanding on my metaphor and adding your insights.

      I don’t think it would be enjoyable to have specific limits or restrictions on any certain area in life (unless you like that challenge or really need to reign it in for some reason.) Systems win for daily enjoyment of life almost every time.

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