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).
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.
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.