Monday, 14 January 2019

Why I’m implementing a shopping ban this year

I realised something startling during the Christmas perish 2018: I’m earning the most money I’ve ever earned in my life yet I still felt strapped for cash, like I was living paycheque to paycheque and anxious about money.

The reason behind this I believe is lifestyle creep. I’ve written about it before here but the gist is that as your salary increases, so does your spending to match it. I thought by being aware of this I would be immune to it, alas I am but human!

Along with lifestyle creep there is another phenomena know as the Diderot Effect. Simply put, the act of buying one thing leads to making further purchases. For example, you buy a new phone, then you feel the need for a new case, a screen protector and then insurance to protect the whole thing. This Christmas we bought a real tree, then we needed a stand to keep it watered, then a star, then lights, then decorations… what began as a simple £35 purchase quickly spiralled to £80!

My main reason for implementing this ban is that I want to save £250 a month to use for university tuition payments as I plan to go back to higher education this September. It’s definitely achievable but to do so means I will have to be more intentional and careful with my spending. I will have to make sacrifices and combat many triggers and overcome certain ingrained habits.

Fortunately I’m not the first person to attempt this, so there is a bit of a template to follow. I’ve been a long-time reader of Cait Flanders and her writing on personal finance. One thing she is very well know for is implementing a shopping ban, having even written a book about it.

The rules of the shopping ban are entirely up to you but the essence is that you only spend you money on bills, groceries, the essentials and any approved items that you chose before the ban starts. To borrow from Cait’s template here’s mine below:

What I’m allowed to buy:
  • groceries and basic kitchen supplies (plastic wrap, tin foil, etc.)
  • toiletries (toothpaste, soap, shampoo, toilet paper, etc.)
  • cleaning products
  • gifts for others
  • anything on my approved shopping list
  • true emergencies (health, lost transport card etc.)

What I’m not allowed to buy:
  • take-out coffee (this shouldn't be too hard as I can easily prepare coffee at home)
  • eating out (I currently eat out about once a week but will allow myself to limited opportunities to go out with friends)
  • clothes (except for those identified on my approved shopping list)
  • household items (decor, furniture, etc.)
  • electronics and appliances

The hardest part of this will be participating in this shopping ban as part of a couple. While my partner supports me in this is will surely throw up some further challenges along the way. 

I've been careful to not cut out all the fun and have budgeted for a couple of holidays this year and some entertainment.

None of this is set in stone and I’m sure I’ll make mistakes, learn what my triggers are and revise it as I go. The good thing is that I have a strong, clear goal to work towards which should keep me on track.

Sunday, 30 December 2018

How creating an approved shopping list curbed my spending

At this time of the year, with sales, bargains, deals in every store and corner of the internet the urge to spend can be more pressing than normal. 

However there is a simple step to being a more mindful consumer. Such as how we would typically make a grocery list when going to the supermarket why not keep one for all the other purchases in life?

For a few years now I have curated a 'to buy' list that has lived on my phone (so it’s handy wherever I go). I add items or services to this list that have piqued my interest for a specific reason and most importantly, that help me towards my long-term goals. A better name for it is 'approved shopping list' (hat-tip to author Cait Flanders for this!) 

Here’s a small example of what’s currently on my list and how they contribute to my long-term goals:

For various reasons I found myself in one of London’s biggest shopping malls on Boxing Day and thankfully I had this list to guide me and keep my wallet in check. After 6 hours of shopping I only ending up buying a black leather belt and lunch.

The reasons why I think this works:

Creates intentionality: It turns mindless, impulse purchases into mindful, considered purchases. It also helps prevent window shopping or browsing becoming an activity or hobby.

Cooling off period: It can be tempting to purchase things in the heat of the moment, especially during a sale*. As I've seen suggested elsewhere, you could put the date, 30 days from when you added the item to the list and only after that date are you allowed to buy it...that is, if you still want it. What I usually find is that some items will be on the list for so long that I’ll realise I no longer need/want them.

Value-based, goal-driven shopping: Of course life happens and emergency purchases are warranted but this can help guide your money to it highest and best use. There have also been many times when I have bought something impulsively. That’s fine, but I have to accept that with each 'unapproved' purchase, I’m delaying achieving my long-term goals.

Less debt: By knowing what you want to purchase you can create a savings goal and purchase only when you have the funds to do so, not the credit.

*I'm all for being frugal but if you wouldn’t buy it at full price, then why buy it solely because it’s on sale?

Friday, 13 July 2018

Why 10 x more doesn't equal 10 x the value ​

As children when we like something, we want more of it. We like playing with a certain toy so the logic goes that more toys will be better. This line of thinking carries through to adulthood.

We get value from one book, so we think having 10 of them will bring us 10 times the same value. We get value from one t-shirt but surely 10 of them will provide more value. A roof over your head is valuable but an extra bedroom, bathroom, double garage, workshop and annex will better...right?

Yes and no.

We get trapped in the thinking that if something brings us x amount of value then say - 10 of them will bring us 10 times more value. However, in economics, the law of diminishing returns states that if one factor of production (number of workers, for example) is increased while other factors (machines and workspace, for example) are held constant, the output per unit of the variable factor will eventually diminish.

How does this apply to the real world? Here's Mark Manson's thoughts:

“Diminishing returns means that the more you experience something, the less rewarding it becomes. The classic example is money. The difference between earning $20,000 and $40,000 is huge and life-changing. The difference between earning $120,000 and $140,000 means your car has slightly nicer seat heaters. The difference between earning $127,020,000 and $127,040,000 is basically a rounding error on your tax return.

The concept of diminishing returns applies to most experiences that are complex and novel. The number of showers you take in a day; the number of chicken wings you inhale during happy hour; the number of trips home to visit your mother in a year — these are all experiences that start out highly valuable at first but then diminish in value the more frequently you do them (sorry, Mom).”

Or, for example, if you go from living on the street to living in a studio flat that’s a huge improvement! But if you then go from the studio to a one bed, sure it's an improvement but likely not as much. And then you upgrade to a 2 bed house, the second bedroom would certainly provide utility and value in terms of guests being able to stay, more storage space, a home office, but since you can only sleep in one bedroom at a time it doesn't improve your quality of life 1 for 1. The difference is incremental, iterative. What’s more, too big a house could cause further problems such as high mortgage payments, more to clean, more repairs, higher insurance etc.

Obviously if you have a true need for a bigger home, a second car or multiple TVs because your family is growing then go for it. I'm not here to judge. The point is not that it's bad to want or to have more than one house, car, phone, gadget but to understand that with each item, the value you derive from the second, third on so forth is not 1:1.

Once we understand this we might be able to curb our desire to equate more with better, and be a little more mindful in our purchases and wants.

Wednesday, 4 July 2018

Consumption overload

Recently I've been thinking a lot and talking with friends about the sheer volume of content there is to consume. Not only are we expected to keep up with the news that is directly relevant today, but also our friends, our circles of interest, the latest TV series, world news and more. And even if you choose follow only one information outlet, topic or creator there are a multitude of platforms on which to consume their information.

I'm no historian but I imagine information was first passed through speech, then drawings, writing, radio, television, the internet and beyond. As technology progresses there are more and more ways to communicate and a lower threshold for entry. Anyone who owns a smartphone has almost infinite ways to both create and share information.

However, this democratisation of communication comes at a cost. The words of James Gleick can't say it any better - "When information becomes cheap, attention becomes expensive". And since with most outlets you can subscribe for free it's so easy to opt-in. So much so, that everything has become a firehose of information and we need a way to control it.

I've tried almost everything throughout the years, searching for the perfect way to manage and stay on top of all of my media, from read it later apps to RSS feeds. Yet algorithms, muting and curation can only do so much. As The Minimalists say "the easiest way to organise your stuff is to get rid of it." And this can also be applied to the media we consume.

About 10 years ago, after reading the 4-Hour Work Week by Tim Ferris, I stopped regularly reading traditional news. Tim called it selective ignorance - "From this point forward, I’m going to propose that you develop an uncanny ability to be selectively ignorant. Ignorance may be bliss, but it is also practical. It is imperative that you learn to ignore or redirect all information and interruptions that are irrelevant, unimportant, or unactionable. Most are all three." The idea behind it is that if something is truly relevant, important and actionable, someone will tell you about it.

Decide what type of media is relevant, important and most importantly actionable to you and your current life situation today. And once you’ve done that you then need to refine, refine, refine.

It's simply no longer enough to know your preferences. You have to work towards your preference and forsake all others.

I used to think that knowledge is power. But not the kind of knowledge that is gleaned from skim reading the headlines or listening to podcasts on double speed. I want to read with depth. I want quality over quantity. There’s no prize for reading more books or keeping up with more newspapers nor does anyone else care.

And yet, there is one fear I harbour about this selective consumption. Won't I simple be creating a bubble for myself? By just reading one newspaper, won’t my information be biased? An informational walled rose garden that is rich, beautiful and well-watered but only contains a single species of flower.

Here's Ryan Holiday on such a question:

"One of the most powerful things you can do as a human being in our hyperconnected, 24/ 7 media world is say: “I don’t know.” Or, more provocatively: “I don’t care.” Most of society seems to have taken it as a commandment that one must know about every single current event, watch every episode of every critically acclaimed television series, follow the news religiously, and present themselves to others as an informed and worldly individual. But where is the evidence that this is actually necessary? Is the obligation enforced by the police? Or is it that you’re just afraid of seeming silly at a dinner party? Yes, you owe it to your country and your family to know generally about events that may directly affect them, but that’s about all. How much more time, energy, and pure brainpower would you have available if you drastically cut your media consumption? How much more rested and present would you feel if you were no longer excited and outraged by every scandal, breaking story, and potential crisis (many of which never come to pass anyway)?"

Yes, you run the risk of not knowing something but you’ll never know everything so stop trying. There's a reason why people become specialists in their fields, or are world champions at a particular sport; it comes from putting more wood behind fewer arrows and making sacrifices to continually do so.

The reason I find this important is that I thought by consuming more information I would have more to write about here on this blog. But the paradox is that all that time consuming content, ate up the time I would use to create - to write. And if this has affected me, how might your consumption be encroaching on your life?

Drop me a comment if you find the level of media simply overwhelming and any tips to manage it.

Thursday, 3 May 2018

What is mindfulness and what is it good for?

Mindfulness seems to be everywhere, from mindful eating to mindful leadership. And while that’s entirely admiral it doesn’t really tell us what mindfulness is.

Mindfulness can be defined as - “the psychological process of bringing one’s attention to the experiences occurring moment to moment and without judgement.”

For me that’s a little vague so the best way to explain mindfulness it through the analogy of health. Health can be abstract as well, but we usually know when we feel healthy and when we’re feeling unhealthy. Also we usually know when we are doing or eating something that is unhealthy versus healthy. So mindfulness is something we all already possess but through practice we can cultivate it to be stronger. Just like an athlete trains regularly so that they can be ready to compete when needed, we can also do contemplative practices, such as meditation, to cultivate mindfulness.

Mindfulness can be applied to many areas of life but for me, at least, the single greatest benefit is the ability to think and be aware I am thinking.

Here’s is what neuroscientist Sam Harris has to say on the matter from his book Waking Up:

“In the beginning of one’s meditation practice, the difference between ordinary experience and what one comes to consider “mindfulness” is not very clear, and it takes some training to distinguish between being lost in thought and seeing thoughts for what they are. In this sense, learning to meditate is just like acquiring any other skill. It takes many thousands of repetitions to throw a good jab or to coax music from the strings of a guitar. With practice, mindfulness becomes a well-formed habit of attention, and the difference between it and ordinary thinking will become increasingly clear. Eventually, it begins to seem as if you are repeatedly awakening from a dream to find yourself safely in bed. No matter how terrible the dream, the relief is instantaneous. And yet it is difficult to stay awake for more than a few seconds at a time.

My friend Joseph Goldstein, one of the finest vipassana teachers I know, likens this shift in awareness to the experience of being fully immersed in a film and then suddenly realizing that you are sitting in a theater watching a mere play of light on a wall. Your perception is unchanged, but the spell is broken.”

To be aware of thinking in the moment - especially those moments when we need it most, such as arguments, high pressure environments, anxiety inducing experiences - gives us the gift of choice.

As famed psychologist and concentration camp survivor Viktor Frankl says: “Between stimulus and response there is space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

With less mindfulness:
Stimulus > response

With greater mindfulness:
Stimulus > choice > response

Mindfulness drives the wedge of choice between stimulus and response. When we are lost in thought we don’t have the ability to choose which thoughts to follow. To be able to disentangle your self from the reactivity of your thoughts and begin to choose how you respond allows for greater mastery over your general wellbeing.

To come full-circle - mindful eating and mindful leadership are examples of where you can get a little more granular with it’s application. You may have decided that you want to lose some weight or eat healthier. Are you aware that you will habitually snack on some nuts should someone place a bowl of them in front of you even if you aren’t hungry? Are you aware of when you are full when eating a meal? Maybe you want to your employees to respect you more. Are you aware of how you are perceived by them when you tell them to do one thing and do another yourself? Are you aware of how you celebrate their successes in relation to giving constructive feedback?

Mindfulness allows us to untangle ourselves from our habitual responses.

Meditation is a deliberate form of practice that cultivates mindfulness just as exercise does for our health. Greater health is a foundational value that supports our lives in a myriad of ways, such as a stronger immune system, the ability to play with our children without getting out of breath or being mobile enough to pick something off the floor. And it’s benefits compound. Those who exercise regularly are healthier than those who do it once a week, so the more you flex your mindfulness muscles the better able you’ll be to call on it when needed.

What do you think - is mindfulness as important to your life as health? Are you cultivating it in your own life and if so how?

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