The Greatest Freedom Money Buys Is Freedom From Thinking About Money

The other day my wife and I were driving when she broke a few minutes of silence to ask - “If you had limited water and were lost in the jungle, how would you ration it?” She loves asking me these types of questions because she knows I will struggle to find an answer longer than most. I gave complex answers about how long the body can go without water and hypothesized about how the humidity levels in the jungle might affect hydration. After multiple attempts, I gave up.

She told me “You should drink it how you normally would so that your brain functions at its best for the first few hours. If you don’t get out early, your chances are low of ever getting out.” I was impressed by the simple counterintuitive logic of the answer. It also got me thinking about a book I read a few years ago – Scarcity by Sendhil Mullainathan and Eldar Shafir. 

In the book, they talk about how scarcity of resources leads to tunnel vision. We think we are doing ourselves a favor by focusing on something we lack (time, money, health), but it really just makes us “less insightful, less forward-thinking, and less controlled” in all the other areas of our life.

If you’re on a diet, you find yourself thinking about food or a lack thereof all day and forget to pick up the kids from the bus.  

If you’re squeezed for time, you focus on urgent matters like getting dinner on the table and not the important ones like noticing that your child has been more distant this week.  

If you don’t spend within your means, you find yourself worrying about your lack of retirement savings while you’re at work, and your job performance suffers, resulting in less income.

So, how do we go about stopping this vicious cycle? The authors suggest setting up systems so that beneficial behaviors become “opt-out” decisions, not “opt-in.”  

If you’re on a diet and prone to forget things, everything – even the smallest of tasks - goes on the calendar.  

If you’re squeezed for time and likely to neglect family time, family time gets scheduled so you are faced with the difficult decision of whether to skip it or not.  

If you don’t spend within your means, you create a savings plan that is invested automatically at the beginning of the month so you don’t have a choice about whether to save or not.

So, what are you short on? What is it costing you? And how might you change that?   

Thank you for reading, 

Alex 

This blog post is not advice. Please read disclaimers.