How to make your intuitions cost-sensitive

by apophenia 1 min read8th Feb 201127 comments

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I recently wanted to keep track of my income and expenses, in a cost-sensitive way.  I am not very good at treating money as a real object, and very few people are good at valuing an expense appropriately.  I'd been having some financial difficulties as a result, so I wanted to be able to reason about what to cut or reallocate in a sensible way.  For me, sensible means using intuition instead of hard rules like a computer program.

I took several sheets of grid paper and taped put them together.  Using colored markers, I drew in my expenses.  If I spent $50 at the grocery store, I would make a blue box that surrounded 50 squares on the grid paper, and label it "Groceries".  I color-coded the expenses, but this is optional.  I left some white squares representing my savings.  I had a whole empty sheet where I could pencil in incoming money as I worked an hourly job to motivate myself (I work from home and need to self-motivate).  I realized certain things were a bigger deal than I thought, and other expenses I didn't need to fret about as much as I had been.  I think humans are intuitively better at visualizing than dealing with numbers.  My main tips for this project are to use a felt-tip marker so the lines really stand out, and to do it by hand instead of computer, so nothing moves around on a "redraw" and you learn the contents as you make it.  Also, I used a scale of $1=1 square, but if you have a lot more/less money than me you could use a different scale or omit savings.

I plan to start life-logging and reviewing the use of my time the same way, which is my other exchangable, limited resource, and which I manage even less well.

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