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Our first guest post on Lifehacker. I hope there will be more!
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Sep 29, 2006
Sep 28, 2006
Want to make more money? Drink more.
It's easy to make more money: just drink more! In particular, drink socially with friends (drinking at home alone has no apparent correllation with making more money, even though I'm positive it must have some impact). The Journal of Labor Research says social drinking boosts your income, so it must be true right? It's always nice to run into an article that casts your weaknesses as strengths and your addictions as good habit.
Let's count the cognitive biases and logical fallacies in this study, just for fun.
Sep 27, 2006
Sep 26, 2006
Mindfulness as an alternative to impulse purchasing
For the last few weeks, I've been stalked by some mysterious gadget. It haunts my thoughts but I don't even know what it is.
It might be Steve Jobs fault. A couple weeks ago he introduced new ipods and showed off a futuristic iTV gadget. Those looked cool!
It might be leftover interest in GPS tracking devices I was looking at a few weeks ago. It may even be some unsettled desire from that camera I bought earlier in the summer. I've still got a hole that I didn't quite fill. I'm not sure what I'm after, but I find myself checking Gizmodo for the perfect new, new thing.
I've got a few other influences countervailing the impulse to spend. A bunch of us have adopted a goal to track what we spend for a week. It's a simple way to increase awareness about where our energy is going. Money is a store of exchangeable value, but we get it by exchanging our life energy for it. I keep thinking, "How crazy is it that I'm dying to part with my money, for some mystery gadget I probably don't even need". I've also been reading some books about buddhism and meditation and those have me trying to be mindful of my thoughts: just hanging back and observing. Its funny how a spending compulsion sweeps you up. By being mindful of your thoughts, you can feel the drive to consume change the way you are thinking moment by moment.
I'm enjoying "hanging out" with the spending compulsion so much that the entertainment I'm getting from introspecting is starting to replace the desire for a new thing. Try it yourself: consider tracking what you spend for a week, and the next time you get swept up with a craving for the new, new thing, hang back and be mindful of where the desire is coming from. You might find that learning about your compulsion is more rewarding than the thing you thought you wanted.
Sep 23, 2006
Sep 22, 2006
What's your real daily allowance?
This might seem like a no-brainer to people who have their finances all figured out, but for people like me that don't really pay that much attention to my bank account other than to make sure there's still money in there, I found this to be a great exercise.
What is your total income, broken down by day?
Depending on if you get your paychecks weekly, bi-weekly, twice a month on specific days, or monthly, you'll have to calculate this differently. If your income is irregular, that might also make it more difficult to determine. I get paid bi-weekly, every other Friday, so I just divided my last paycheck by 14 to get my daily income.
What are your regular expenses?
Every month I have to pay the same amount for my mortgage and my condo dues, so rather than have to worry about them too much I decided to subtract them from my daily allowance. Just to be anal about it I multiplied them both by twelve and then divided that amount by 365 to get my amortized per-day amount for regular expenses. I did the same for property tax. This was an interesting exercise in itself because you will essentially find out how much you're paying every day for your living situation. I'm paying a lot more than I would've guessed. I could save money by living in a cheap hotel. People would make my bed and clean my bathroom for me. But I guess there are trade-offs as well.
How much do you want to save per month?
I have a new goal to live on 43 Things to live within 80% of my income. There's a bit of flexibility about what that actually means, so here's my definition: I'd like to live off of 80% of my post-tax income, after 401K, but before regular expenses. To get the 20% that I'll need to subtract from my daily income, I took the total daily income before removing regular expenses and divided that by five. That number is the 20% of my income that I'd like to save each day.
Calculate your daily allowance
Subtract your daily regular expenses and daily savings from your daily income to get your daily allowance. Knowing exactly how much I could spend, on average, per day was very satisfying because it's a real number that you can keep in mind on a daily basis. If you go over one day, it might help you realize that you need to spend a few days going under.
If you give this a try, let me know how it goes. Did you do anything differently? Was the final number more or less than you had hoped it to be?
