#74: Kondo your credit-card statements
14th February, 2022
Welcome to the Idiot Money newsletter. This week, becoming wiser with money by understanding that the weirdly overlooked purpose of money is to make your life better, including:
  • That some of the best skills in life can be cultivated for free.
  • How typical approaches to budgeting are useless.
  • And Kondo-ing your credit-card statements.
To make more skilful life choices, cultivate more life skills. Too often, the focus for cultivating financial life skills is to do what you’re already doing more efficiently. However, the best skills, financial or otherwise, start with challenging the stories that govern your choices. Don’t worry… challenge doesn’t necessarily mean change!
‘One day,’ wrote the queen of sorting people’s shit out, Marie Kondo, ‘I had a kind of nervous breakdown and fainted.’
In a scene that could qualify as the quaintest ever psychedelic revelation, when Maria came to, she heard a mysterious voice, ‘like some god of tidying telling me to look at my things more closely.’
This self-avowed obsessive tidier realized she’d been making a big mistake.
‘I was only looking for things to throw out. What I should be doing is finding the things I want to keep. Identifying the things that make you happy: that is the work of tidying.
Marie was onto something.
There’s a great difference between the processes of scratching stuff out and building stuff from scratch. It’s why Kondo’s approach to tidying is magical compared to those obsessed with ever-cleverer storage solutions. And it’s why typical approaches to budgeting are bullshit.
Time spent tidying, however clever, is wasted when the stuff being tidied up would have been better ignored or discarded.

Meditation is a life skill

I’m always on the lookout for foundational life skills. The sort of stuff that makes it easier to glide past life’s little (or large) frustrations, rather than slaving away getting better at dealing with them.
Like meditating.
Not only does being able to meditate mean you’ll never be bored, but there’s also more than a grain of truth in Blaise Pascal’s quip that ‘All of humanity's problems stem from man's inability to sit quietly in a room alone’. Developing this ability is therefore at least moderately handy.
Not to mention good for your eyes, your posture, and your bodily tension.
And – most importantly – (and as we’ve seen before, in explaining why meditation isn’t relaxation) your ability to pay attention to how you pay attention is fundamental to making better financial decisions.
Odd, then, that humanity’s made such an effort, not to make it easier to sit still, but to enable excuses not to.

Fasting is a life skill

Another foundational life skill is fasting.
Aside from the myriad health benefits, fasting is freeing.
Fasting frees you from your gut hijacking control of your body and your brain.
And from being so desperate for a feed that you’re unable to focus on anything else.
From becoming hangry.
And from being forced to eat crap because you’re sure you need ‘something’ but find yourself in a nutritionless desert.
Most importantly, fasting frees you from the story that a hunger pang is an indication that you’re hungry. This simply isn’t true. And its implications for your financial choices are huge.
If you’ve ever fasted for more than three days or so, you’ll be aware that hunger pangs arise around the times you typically eat, and fade quickly after. Between about three and five days they disappear altogether. They’re mental expectations, not physical danger signs.
The more easily you can thank the hunger pang for its reminder and reassure it that all is well, the more easily you can take control of your priorities.
This is an incredibly useful thing to understand. With implications that extend far beyond your stomach.
For example, that pang you feel upon encountering a problem that a solution must be for sale somewhere. Maybe it is. But maybe it’s a costly reflex that serves not to make your life any better, but to distract you from the stuff that actually would, born of reflection rather than reflex.
If you’ve never missed a week’s worth of food, you’re missing something far greater. And yet the vast majority of people haven’t voluntarily gone so much as 24 hours between meals. Plenty object to the very idea by flapping about with all the grace of a portly pigeon on a windy day.

Expenditure fasting is a life skill

Like food fasting, expenditure fasting is also a life skill.
Go for a week deliberately trying not to spend money on anything.
Maybe combine it with a food fast. That’ll sure make it easier, and more beneficial.
Just as the chief benefit of food fasting isn’t losing weight, the chief benefit of expenditure fasting isn’t about spending less money.
It’s about challenging the fundamental stories that rule your life, possibly in reeaaaaaallly unhelpful ways.
Fasting forces you to pay attention.
It forces you to identify what really adds to your life, rather than what merely doesn’t obviously detract from it. The difference between the two is huge.

Typical approaches to budgeting are bullshit

As we’ve noted many times before, one of the most important things you can internalise about personal finance is that we’re not crap at knowing what we want, as is often claimed. We know what we want when we pay attention. We’re just crap at paying attention.
Totting up money in versus money out isn’t paying attention.
That would mean that anyone earning a fortune would be spending their money wisely, whatever they did with it. Which is obviously insane. But this is the world we live in – that we choose to construct. Most expressions of the belief that all consumption is good consumption are a touch more subtle, but they’re no less stupid, psychologically speaking.
Nor is categorising expenditure based on where it was bought paying attention.
That would mean that meals out with friends whose company leaves you walking on air had the same effect on your life as those with insurance salesmen. Or that the first glass of wine that lubricates a first date is the same as the tenth glass that ruins it. Or clothes bought because you were replacing something beautiful and/or functional were the same as those bought as a hopeful but ineffective form of therapy. And so on.
Nor is setting an amount you’re ‘allowed’ to spend on certain things by starting from your current expenditure paying attention.
That would mean not challenging your current choices but entrenching them – the opposite of what you want to do!
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Meditation and fasting are both brilliant tools because they both challenge the incredibly common, but unfathomably unhelpful story that the best solution must be for sale.
And they’re tools that, while you will benefit from learning to use them better, everyone already possesses, and can pull out instantly, at any time.