Pay attention


Is there an amount of money that's too small to concern yourself with?  People make that case, usually saying something like "Life is too short to waste time counting pennies."  They're missing the point, though, because they're focusing on the wrong thing.

If you focus on the amount of money, it's easy to miss what the real issue is, and end up doing the wrong kind of analysis.

Some people do a "time is money" analysis, such as:  It's not worth spending an hour to fix an error that costs you less than you could earn by working for that hour instead.

Some people do a "bang for the buck" analysis, such as:  It's better to put your effort where it can make a huge difference (getting a lower interest rate on a mortgage loan, perhaps), than to put it where it only saves you a few cents (figuring out which box of cereal has the lowest unit price).

Both these sorts of analyses (and others like them) are wrong in two ways.  

The less important way is simply that they're wrong:

  • It's not true that ignoring a minor error costs less than spending the effort to fix it.  In particular, it's not true if it's a systematic error--one that would be repeated every month or multiplied in larger transactions.  It's also not true if ignoring it marks you as a chump, to be taken advantage of in other ways or by other people.
  • Similarly, it's not true that that optimizing small transactions offers a small return compared to optimizing the big ones.  Careful attention to unit prices, stocking up during sales, and the other tricks of a careful shopper can easily shave tens of dollars off your monthly shopping bill--which, multiplied by 12 months in a year for 30 years, puts it at the same order of magnitude as the huge savings from a better mortgage rate.

As I say, though, that's the less important way in which the whole line of thinking is wrong.  The important error is in imaging that the world can be divided up into "big things" that are worthy of your attention and "little things" that you shouldn't waste your time with.  That's a grotesque error with considerable potential to ruin your life.  

The "things that are worth your attention" are the things that you're doing.  

There are things that aren't worth your attention, but the correct response is not to go on doing them while thinking about something else.  The correct response is to do something else.  Something that's not worth your attention is not worth doing.

Understanding this is the most powerful tool I know for aligning your actions with your values--and nothing will do more to make you happy than that.

The reason to pay attention to the little transactions--saving three cents on a can of soup, perhaps--is not because such savings, multiplied over all your transactions, add up to a significant amount of money (although they do).  The reason to pay attention to the little transactions is that you're doing them.

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Paul Michael's picture

which I think always applies - "look after the pennies, the pounds will take care of themselves." I often get strange looks from people when they see me umming and ahhing over a 12 cent difference in a box of cereal or laundry detergent, but it all adds up. Sometimes to a very nice sum of cash. Nice article Philip.

Linsey Knerl's picture

I can plan my shopping list, cut coupons and watch sales like a hawk.  I'll be on my way home, feeling good that I saved 30% on my grocery bill.  Then I'll see on my receipt that I was charged an extra $6 for produce or one of my larger coupons didn't scan.

With a 30 minute drive to my grocer, it's not worth the drive back.  Even though my savings turned out to be a wash, it's better than being $6 in the hole.  Every penny does count, especially because you can only control so many things.  Try to take care of what you can, I guess. 

Your post also addresses the cost to people who don't work within a traditional "my time is worth X" money system.  As a freelancer, I can almost always justify doing something myself, even if it costs time.  To the unemployed person (who can't use that extra time saved to earn cash) there is no time/money exchange.

Thanks for the post! 

Guest's picture

Great words of wisdom! "Anything worth doing is worth doing well." I think a topic on, "Things not worth doing and the process of evaluating them," would be a good one.
Often we get caught up in routines that govern more of our time than most of us might like to admit. I have entertained the thought of ratifying my routine in ways that would, at least, help me lead a more "worthy" and meaningful life even if it would still be another gripping routine. Yoga every morning, packing a healthy lunch, thirty minutes of cardio, more altruism... (Cliché continues) This is not where I wish to go. However, this is tied into the original idea. Attention and evaluation helps to change old behavior. From this end we could create a new statement, “Anything we do is worth the time to introspect why we do it.”

Thanks for the chance to think!

Guest's picture

"There are things that aren't worth your attention, but the correct response is not to go on doing them while thinking about something else. The correct response is to do something else."

So I should be doing something else than grocery shopping since I deem it not worth my attention? Like preparing to meet God as I expire from starvation?

Philip Brewer's picture

My theory is that, if it's the way you avoid starving, your grocery shopping is worth your attention.

My point is that what you think is worth your attention is a good guide to what's worth doing, just as what you think is worth doing is a good guide to what deserves your attention.  When you find that they don't match up, it's worth giving it some thought.  Is it your attention that's misplaced? Or are you spending your time doing something that's not the most important thing you could be doing?

Guest's picture

Comparing unit prices doesn't take that much time. One thing that helps is to choose a store that makes it easy. I've been going to Pathmark because they post unit prices on sale prices too in addition to unit prices on regular prices. For everywhere else, it'll help to bring a calculator when you shop.

Philip Brewer's picture

All the stores here post unit prices, but they're often useless.  Back when I used to buy soda, I'd look at the "unit" prices on the shelves, and find that the six-packs had "cents per can," the small bottles had "cents per ounce," and the big bottles had "dollars per liter"!  I don't think I ever saw "cents per milliliter" or "dollars per quart," but I wouldn't put it past them.

In particular, the orange juice sizes seem designed to make unit price comparisons hard.  They've got half-gallon cartons and then three-quart and gallon jugs.  Since that's an easy 2, 3, or 4 quarts, you'd think they'd say that.  They don't, though.  They have gallons, fractional gallons, and ounces, and seem to carefully avoid directly comparable units.

Still, as you say, it's easy enough, as long as you learned your weights and measures in elementry school, and can do a little basic arithmetic in your head (or bring a calculator).