Broken Systems: Why We Continue To Fail

Failing at something is not very fun. Failing at the same thing over and over is maddening. But almost everyone I know, myself included, has a certain area of life (or more likely areas) where we constantly fail to live up to our own expectations. We tend to have great intentions, but rarely meet even our own standards. When we try to make changes in our lives we often look at the specific symptoms of our problem, yet fail to account for the broader context to the challenges we face. We like to focus on individual items, but we must understand that our lives are built around systems.

Businessman Filing InformationWe all have systems in our lives. We have a connected set of activities and routines that we perform on a daily basis. Whether we analyze it or not, we have systems for many things in our lives. How you get ready for the day is a system. There is a constant set of actions you routinely do to prepare yourself for the day. They may be quite efficient and thought out, or it may be rushed and anxiety inducing. Constantly leaving the house late and feeling stressed getting ready is likely a symptom of a failed system rather than a preferred outcome. Often, our intentions are good. We may even have a nice goal in mind. But we rarely take the time to set up full systems that put us in a position for success. Continue reading Broken Systems: Why We Continue To Fail

Get Off The Couch & Do Something: Battling Inertia

I’m Guilty. The articles that are often the hardest to write are the ones that make me look in the mirror. And I’m guilty. I’m guilty of letting inertia get the best of me. I would like to think that I’m pretty good with my time, energy, and effort- but often I find that I can get lazy. Or at least inefficient. I find that I tend to do the same things over and over. I get quite comfortable with my routines and the products and services that I use most often. I don’t even dislike change. However, the minimal amount of effort that change requires often necessitates a battle with inertia. For anyone who hasn’t thought about science since 4th grade (myself included)- Inertia can be described as resistance to any change in the state of motion. In essence, we tend to keep doing the same things over and over unless an outside force changes our direction.

lazy manAs humans, we have a tendency to gravitate towards comfort and consistency. Even if things are pretty bad, we’ll continue to do them due to laziness or fear of change. It is even worse when things are ok but could be a lot better. I tend to fall in that second category. I get complacent when things are going well but could be better. When I’m saving and spending with plenty of margin I don’t worry about change. When work is going well I don’t think about honing my skillset. When my life and marriage are good I don’t often think about better.

Inertia happens all the time in areas of our personal finance. We often continue to make inefficient decisions with our money and fail to take any action. Here are some of the more popular activities where inaction can be expensive. Continue reading Get Off The Couch & Do Something: Battling Inertia

Cash is Better Than a Big Garage

I’ve got a lot of stuff. I used to have more, but I still have a lot. The people who know me best might actually find it amusing to observe my transition from avid collector (aka mild hoarder) to a vaguely defined minimalist. I actually still enjoy quality objects and I still collect several things. However, I have come to the realization that cash is still a great equalizer and much better than even the biggest garage.

full garageThe evolution of cash and the speed of the marketplace: Once upon a time trying to find objects, especially unique or inexpensive ones, was an arduous task. Trying to find a used bike that was your exact size meant calling around everyone you knew, paying a retail markup at a local bike store, or spending hours searching flea markets or garage sales. If you were in a big city you might have the luxury of finding a decent classified section. (Photo: Planetgreenrecycle) However, this has all begun to change. The concept that makes cash better than all your stored junk hinges on the speed of information. It is now possible to find what you need and purchase it quickly and efficiently. The simple combination of amazon, local retail, craigslist, and ebay can get you almost anything you need quickly and simply. You no longer need to store hundreds of items or keep things for just-in-case. Most of the time, you are better having cash and the knowledge of where to quickly get the things you need. Continue reading Cash is Better Than a Big Garage

If You Carry A Credit Card Balance Your House Is On Fire

There are few things in the financial world that are as polarizing as credit cards. It seems everyone has an opinion. Some people love them, some people need them, and to some people “credit card” sounds a bit like a curse word. Credit cards have the incredible ability to facilitate poor decisions, yet a limited few individuals seem to flex their power to leverage cc spending. Credit card companies do their best to market the idea of responsible credit card use (quite similar to alcohol beverage distributers). And they are really good at their craft. Over the last fifty years, they have taken an outcast concept and integrated it into our society. While the notion on using a credit card can be justified, carrying a balance on a card is difficult to justify for anyone that can do third grade math.

creditcardcutCredit card debt is a unique proposition. Companies will lend you money in a very convenient way then charge you tons of interest if you do not pay them back. It seems simple but so many people fall into the trap of credit card debt. Credit card debt has almost nothing to do with income. You will not earn your way out of it. If you have credit card debt it is a clear sign that you are disorganized. It means that you have been living above your means or so close to the edge you needed help. Chances are good that you had an “Emergancy” and Visa picked up the slack. The ironic part is that credit card debt is a middle income problem. People with money don’t need credit cards and truly impoverished are unable to qualify. You don’t accidentally get out of credit card debt. It must become a priority. Credit cards are not for emergencies, they are emergencies when you can’t pay them off. Continue reading If You Carry A Credit Card Balance Your House Is On Fire

Perfection: The Enemy of Relaxation

I really wish this post would be perfect. I wish my home was just a bit cleaner and tidier. If I spent a little more time I’m sure I could make my work perfect, or that project for school just right, or that party just a little better. The pursuit of perfection can be paralyzing. From something as simple as having friends over for dinner and planning a surprise party to starting a blog or a small business, fear and the desires to make things perfect often keep us from taking action. Given enough time, almost all of us could make the activities in our lives perfect. Or at least pretty close to it. Whether it be work, school, family, sports, finances, or exercise, surely perfection would be obtainable. Wait, is perfection actually obtainable?

qualityvstimeI want to do the things that are most important in my life well. I actually enjoy working hard and working efficiently. I enjoy seeing a job well done. I also enjoy relaxing. The nagging thought of perfection can rob us of relaxation. For most activities there is a point where good is good enough. We don’t have to be perfect to meet our goal. Often, getting to good enough takes much less time than perfection. In some cases, getting to perfection takes more time than we will ever have. It is rare that a blog post will impact me for years to come, but J.D. Roth wrote about this subject (picture from GRS) when defining the fundamentals of personal finance. Understanding good enough is one of the key tenants to an efficient life and a primary factor that determines how well we are able to relax. Continue reading Perfection: The Enemy of Relaxation

Everyone Wants to be Your #1 Priority

We live in an interesting world. Your Boss, Your Professor, Your Girlfriend, Your Kids, Your Job, Your Readers, Your God, Your Debts, Your Friends, and Your Television are all competing for your time, attention, and priority. And everyone wants to be your top priority. We are forced to economize our time. We must, by definition, make choices about how we live our lives. What do you do when school, work, children, civic duties, sleep and hobbies all command 40 hours a week? You don’t do them all. You must make difficult choices about which parts of your life will not get your full attention. You already prioritize, you just may let others do it for you.

priorityIf you do not define your priorities, society and others will define them for you. Have you ever taken the time to consider and actually list out what your priorities are? List your top five ideal priorities in order. What comes first? Pause: do it mentally or write it down. For bonus points take out a scratch sheet of paper and actually write them out. What do you spend the majority of your time, money, energy and attention concentrating on? Is it close to ideal? We must enforce limits to maintain our sanity. Our health and relationships will often give out before our money does. I would guess that there are very few people at the end of their lives that would trade more “success” for quality relationships or a healthy body. Our goal is to simply use the time we have efficiently so we are able to do the things that are most important in our lives. Our goal is also to move in the direction of mental and physical sustainability by moving our current priorities toward our ideal. Continue reading Everyone Wants to be Your #1 Priority

Live an Efficient Life: A Life Without Waste

What is an efficient life? What is efficiency for that matter? We’ll start with defining our term. Efficiency is any system designed to achieve maximum productivity with minimal waste or expense. And this has truly become the thesis for Simple Economist. An efficient life is one lived without wasted time, money, or resources. It is a life where the unnecessary has been removed and only the useful remains. It is a life in which we understand what brings us true satisfaction and we are actively pursuing it. It is about knowledge, self control and behavior. By applying the principles defined in economics, we can leverage efficiency to live a fulfilling, productive, relaxing, and awesome life.

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The post is designed to be an evergreen post with further reading in almost every category. I’ve listed 9 practical areas in our lives where inefficiency tends to creep in over time. Areas where we end up wasting time, energy, money, or resources due to disorganization and poor planning. I’ll be the first to admit that I am not always productive as I wish. I still waste more than I should. I’m only slowly becoming aware of when I’m being efficient and when I’m not. And we must be careful because inefficiency is quite profitable for others. McDonald’s and Visa know this. Marketers are fully aware that we live inefficient lives and are often there to fill in the gaps. If we take the time, we can utilize the knowledge and resources we have developed to live awesome, exciting, efficient, waste free lives. Continue reading Live an Efficient Life: A Life Without Waste

The Sin of Unapologetic Wastefulness

There are very few things that can upset parents, politicians, economists, environmentalists, or anyone who is thinking of growing a mustache more than simple, unapologetic waste. It will look different for each person or individual. And rarely are the monetary issues the largest concern. Growing up, there was nothing that peeved my parents more than opening a coke, having a sip, then leaving it out to get flat. A kid loading up pounds of food on his plate- taking a bite then throwing the rest away, spending by politician’s opponents, sprinklers on in the rain, or idling in an SUV for fifteen minutes on a trip across the street, are enough to make the skin crawl of some individuals. The common denominator is that we all have a point where we find wastefulness painful to watch. For some it is our kids (or others’ kids), our friends, celebrities, or even rich people.

MP900444789So what exactly is the sin of unapologetic waste? Well, I use the tongue-in-cheek term sin as a notion in which all people understand as bad. Not necessarily in a religious sense, but something that cross culturally is accepted as unacceptable. The concept of unapologetic refers to the idea that someone is proud, guilt free, or boastful of their situation. Someone that trumpets their own accomplishments and waste without a hint of remorse. And wastefulness can be anything including encompassing money, time, food, relational capacity, transportation, or natural resources. Although most often associated with natural resources and wealth, the frustration of wastefulness is a shared emotion of anyone who has ever lived in America or spent time in a first world country. Continue reading The Sin of Unapologetic Wastefulness

What’s Your Flat Tire?

Boom. Pop. Shaking. Loss of Control. That awful feeling you get when you hear or know when your tire is going flat. A few months ago I was taking a short ride out to get a few groceries. I was biking along the road and somehow managed to ride over some pieces of a broken taillight hanging out in the bike lane. My tire was slightly punctured and was leaking slowly. I wasn’t too far from home so I kept going for a little bit. My once easy bike ride suddenly felt like I was peddling down the road with a four hundred pound gorilla on my back. Even the small hill seemed terrible, like trying to run in deep sand. Eventually I did make it home. I gave the tire a nice little inspection confirming my disbelief that the tinniest shard of plastic had slowed down my life that much.2553583162_c700880aa8

The ironic part about a tire on a bike, car or plane, is that it is one of the least expensive, yet most vital parts of the vehicle. Of the thousands of parts that make up a car, a tire is often one of the simplest- yet, most crucial to its functioning. When it is not working- even though it is just a tiny part, it makes the entire vehicle almost inoperable. It doesn’t matter how nice the leather is or how big the engine, a car won’t go very fast or far on a flat tire. How about a multimillion dollar plane that can’t operate because it ran over some debris in the runway and punctured one of the tires? Or what about that bike in your garage with a flat tire waiting to not be ridden? Continue reading What’s Your Flat Tire?

Getting Rid of Justin Case

I’ve had many long, hard fights with my dear friend Justin. In fact, he is always coming over and filling my house with things I don’t need. It took many years but I’ve finally kicked Mr. Case out of my life. At least mostly. He still tends to to come visit occasionally and enjoys spending time with house tools and infants. But I’m making progress. He also makes me worry. He has the strange ability to keep me uncomfortable even in the most comfortable of situations. He brings with him a long list of potential hazards that dot my future path. Most of the time, he is not needed. He just gets in the way. I think it’s time we all take a collective breath and kick Just-In-Case out of our life.

winter2012-DontLeaveHomeFor many of us, we surround ourselves with stuff and the anxiety about all the potential what-ifs. We tend to keep things around that no longer have current use. We tend to worry about minutia even if the probability of problems and issues is tiny. In fact, many people proudly boast about the little details they worry about and the lack of sleep it causes them. But not me. I’m flexing my stress free muscle and cleaning out the crap I don’t need in my head and my closet.

Continue reading Getting Rid of Justin Case