$150/mo to make sure my financial future can’t blow up is too much money.
But $450 once a quarter is totally cool for my wine clubs.
Meeting my finance team for 25 minutes a month is tough to commit to.
But I’ll play XBox for 25 minutes every night when I get home from work.
I couldn’t tell ya what my income, spending, or savings were last month.
But just ask me about the stats for my fantasy football QB last week.
Most of us apply two different standards to our decision-making based on the desirability of the process.
If it’s something we don’t want to do, even though we know we should we’ll focus on the cost while heavily (and often irrationally) discounting the benefit.
“Oh, that sounds expensive and it’ll take too long. Besides, I’m sure it’ll all work out”
But take the exact same cost and time commitment to something we enjoy and suddenly, we’re focused on the benefit and discount the cost.
“I just love driving up to wine country every few months to pick up our case of wine. It really helps me recharge.”
It’s a very human thing to do. All of our monkey brains are wired that way.
It’s also the root cause of penny-wise/pound-foolish decision-making.
So Instead of applying a cost/benefit analysis with a high probability of “process bias”, I try to make decisions with an analysis of the ROI of my time and money.
I know 25 minutes a week focused on my finances will return MORE than 25 minutes’ worth of time and money. Let’s do it!
I also know that taking a Saturday off to go to wine country will return more than an afternoon’s worth of focused productivity from the recharge. Twist my arm!
Kevin Cunningham calls poorly mapped mental cartography a “dumb tax”. The better your mental map, the less “dumb tax” you pay.
Rewiring your decision-making process to disregard the desirability of the process will result in better maps and less dumb tax.
