Overspending is bad and how to stop it

Overspending is probably the biggest reason people get into financial trouble. I’ve seen six figure earners living pay-check to pay-check. I’ve also seen people with average incomes build significant wealth. The differentiator is their attitude to spending.

There are lots of ways to overspend. Buying a bigger house than you need, fancy cars, even just grabbing a cup of overpriced coffee. I’m going to focus on day to day spending, as it’s where most people can quickly make the biggest impact.

The good news is there’s an easy way to stop overspending. It’s so easy, you can do it right after you’ve read this:

Set a weekly spending budget. Take it out in cash at the beginning of the week

It sounds too simple right? It is simple, and it works.

Set a weekly spending budget

My guess is most people don’t have a weekly budget. They tend to just spend, check their balance infrequently and hope they don’t run out between being paid. It’s not a good strategy. To not overspend, you have to know your limit. Even then, it takes quite a bit of work to stay in it.

To find that limit, total up your regular outgoings (house, car, groceries, gym etc.) and subtract it from your income. What you’re left with is free spend. I appreciate this is overly simplistic and doesn’t allow for saving, but you get the idea. You need to come up with a budget for your free spend that you will stick to.

Let’s say you’re left with £1,000 as free spend. That’s roughly £250 a week — anything more and you will overspend.

Take it out in cash at the beginning of the week

At the beginning of the week, take out £250 in cash and commit to not using a card. [1] It’ll take just a few days before you notice how powerful this is. There’s something about having a week’s allowance in your pocket — it makes you more conscious about spending.

You’ll notice a few things start to happen. You start to anticipate significant spends and make sacrifices to compensate for it. You’ll be extra frugal at the start of the week, because it sucks to finish out the week on a shoestring. You’ll find yourself doing mental calculations each time you spend. What % am I spending? How much will that leave me with for the rest of the week? Is is enough for what I have planned? You’ll also be less susceptible to impulse buys. You’ll still get the urges, but they will follow with thoughts like do I really need to be spending this money?

Let’s take a couple of examples from my own life:

Catching up with Barry

My friend Barry visited me on Wednesday. We often have a blow out and eat somewhere fancy. I thought about this on Monday and realised I could easily blow two thirds of my weekly budget in an hour. I would need to make a sacrifice or two.

I spent hardly anything on Monday and Tuesday, so I could go into Wednesday with nearly the full weekly budget in my pocket. We ate somewhere nice, but not particularly fancy. I paid for the meal, which came to about 25% of my weekly budget. With four days left in the week, I can now stick to my budget. With a quiet weekend, I may even have some left over. I wouldn’t have had any of that internal dialogue without a weekly budget and the cash in my pocket. I would have just paid on card and not given it a moment’s thought.

Gymnastic course

Last week, I stumbled across a gymnastic course I wanted to do. I knew it would provide me with value. It was also affordable and on offer.

Normally I would have just bought it immediately, without a thought for how it affected my budget. Now, I had a dilemma. I was running short for the week as it was and had a few things I wanted to do at the weekend. If I bought the course, I would be in overspending territory.

I went back and forth for a few days and finally decided to buy it. My reasons were that it was high value and on offer. It also wasn’t particularly expensive — about 30% of my weekly allowance. Because I was already tight for the week, I ended up overspending by about 20%. I guess it wasn’t the right thing to do, but it also wasn’t a big mistake. It made me determined to come in under this week to make up for it.

Again, I wouldn’t have had that internal dialogue if I didn’t have a weekly budget and the cash forcing me to think about. I definitely wouldn’t have paused before buying it. And, I wouldn’t be trying to come in under this week to make up for it.

Give it a try, I think it’ll work for you too. Figure out your free spend budget and take out the cash at the beginning of the week. Avoid any spending on card throughout the week. Notice how things go. I’m think you’ll start having some of that internal dialogue and will spend less.

P.S. If you want to dive a bit deeper into this type of stuff, check out The Millionaire Next Door and The Richest Man in Babylon. They are great books.

Notes:

[1] If you are in a situation where you cannot avoid using a card, just do it and allow for that spend in the week. Aim to be over at end of the week or start the next week short — to the amount you spent on card.


8 Things I Learned From a Writing Legend

On Writing Well will change how I write forever. I found myself furiously taking notes because I didn’t want to forget the best bits — and I want to share a few of them.

The book is for anybody that wants to learn how to write, and mostly everyone will benefit from getting better at writing. Whether you’re sending a quick email or the CEO briefing the company — getting your ideas across succinctly is important.

1. The most important sentence is the first one

I knew this, but it was a nice reminder. When I start to read something, I want to know quickly that it’s worth my time. If I don’t get a reason to keep going, I won’t. There are too many things competing for my time and my attention span is shorter than it used to be. If I become uninterested for about half a minute, I’m already thinking about bailing.

The first sentence needs to grab the reader and give them a reason to go onto the second sentence — and so on. You have to hook them immediately and steadily pull them in as you build into what you’re saying.

If you’re publishing online, this advice extends to the title of the article. If you don’t compel the reader to click, they won’t even reach the first sentence.

I don’t give much thought to how I start my writing. I made more of an effort with this article. I started with a bold statement that ‘On Writing Well will change how I write forever’. I also promised to ‘share some of the best bits’, giving a reason to keep reading. Hey, if you’re still reading, I guess it worked. 😉

2. The essence of writing, is rewriting

This was my biggest take away, and it was emphasised throughout the book.

I’ve always appreciated clear, beautiful sentences. It’s easy to assume someone either has a way with words, or they don’t. But remember, the perfect sentence probably started as a crappy one.

Good writers spend more time rewriting, than writing. A lot of fussing and tinkering — making it clearer, tighter, simpler. Removing words or whole paragraphs that aren’t doing work. Changing the order of things. Reading it aloud to see how it differs from how you speak.

Paul Graham is one of my favourite writers. His essays take weeks to write. Even this very short 423 word essay took over an hour. He spent twice as much time rewriting, compared to writing. He also has close friends give feedback on early drafts, forcing more rewriting.

It sounds like a lot of faffing about. Is it worth the effort? I think so.

People make decisions and take actions based on what you write. You want them to be the right ones. They change their minds or become inspired. Or they don’t. It’s important to give yourself the best chance of getting the outcome you want.

The other benefit to rewriting is it forces you to take your time. I often get a strong sense of clarity when I take a break and return with fresh eyes. It’s not unusual to delete or re-arrange large chunks — or sometimes pick another direction altogether.

I’ve become lazy lately and often skip rewriting. I’m going to change that, starting with this post.

3. Narrow the story, think small

I struggle with this a lot. I start off writing about one thing, but soon find myself trying to tackle a handful of connected things too.

Let’s say you want to write about strategy. It’s a big topic of it’s own, and there are lots of points you can make about it. You might find yourself saying that strategy must be clear and well known by everyone. You then find yourself drifting into it being a leader’s responsibility — before you know it, you’re covering large topics of leadership too.

You’re better off narrowing it to one aspect of strategy and finding something specific to make your point. Far better to convey one thing well, than several unclearly.

Try it. You might be surprised how easy it is to get back to the wider point you wanted to make in the first place. You realise all you need to do it clarify it — the narrow story did a good enough job of getting it across.

I need to fight hard against the tendency to cover big topics or many things in one go. As soon as I go down this route, I start to get overwhelmed by the size of the task — and then I get bored of writing. I resort to covering each topic in less detail (and less well), and end up covering a number of things poorly. The point is lost.

The right thing to do is pause and not go down that route. Come back to something narrower and more specific.

4. Look for the human element

The human element brings a story to life. Where you can, interview people and get them talking. It will help turn a seemingly drab topic into something fascinating.

William Zinsser gives the example of when he was asked to write a long article about Sotheby’s, the London auction firm. He found out that Sotheby’s was broken down into various domains (silver, art etc.), each one with an expert in charge. In interviewing each of them, he stumbled across some great anecdotes that helped liven up the story (unloved objects buried in the strangest of places etc).

Another example is writing about the growing problem of homelessness. It would be easy to tackle the topic in a factual way, but much more interesting to tell the story of a homeless person. It would get to the heart of what it means to be homeless (how people end up being homeless, how hard it is to reverse the situation, the dangers of being on the streets etc.) You can weave the main point you want to make throughout the story.

5. Imitate your favourite writers

I sometimes worry about too closely imitating my favorite writers, but Zinsser encourages it.

If you like how someone writes, give yourself permission to be inspired by them. Take note of how they use language and practice using their tricks. As time goes on, you’ll settle into who you’re supposed to be. And you’ll be a better writer for it.

6. When the end presents itself, grab it

If the first sentence is the most important, the last sentence comes a close second. It’s the last thing someone remembers.

I’ve always struggled with how to end something. I don’t give it much thought until I start to notice I’m getting there — and then I lazily fall back on summarising everything above. It never feels the right thing to do. But it’s like that email you write in a fit of anger, knowing you shouldn’t send — you do it anyway.

William Zinsser’s advice is, if you’ve made the point you wanted to make, look for the nearest exit. The best type of ending often comes as a surprise to the reader, but feels right all the same. Try to end with something that encapsulates your idea, but also jolts the reader with it’s sharpness and unexpectedness. Some other ways to end are coming full circle or ending with a quote.

7. Use a dictionary and thesaurus

I was surprised by this. The closest I’ve come to using a dictionary or thesaurus recently is a quick search for the meaning of a word on google.

But it makes sense. Two of the biggest mistakes a writer can make is being unclear or boring. It forces the reader to work too hard. A thesaurus helps you find interesting ways of saying something. The dictionary is a good place to check you’re using the right word.

I’m going to make an effort to use both in my writing over the next few months.

8. Writing is hard work

Getting just a few paragraphs to flow together and be a joy to read is hard. It requires clear thinking, patience and an obsession for the smallest details. It can be frustrating work. Only a burning desire to want to write better than everyone else will pull you through.

It seems fitting to leave you with a quote from William Zinsser himself:

A clear sentence is no accident. Very few sentences come out right the first time, or even the third time. Remember this in moments of despair. If you find that writing is hard, it’s because it is hard


Writing Well

I finally got round to starting On Writing Well by William Zinisser yesterday and I’m loving it. I knew I would like it when I saw the names of some of the first chapters — Simplicity, Clutter, Style, The Audience, Words, Usage.

It starts with emphasising that it’s hard to write well. The skill in keeping things simple and stripped back. Thinking through the order in which you say things. Making sure sentences and paragraphs fit together well. Removing the unnecessary.

He makes the point that readers have an attention span of about 30 seconds, so there is no room for confusing them. If you make the reader work too hard, you’ll lose them to someone else.

Here is a fantastic example from the book of how writing can become tighter and simpler:
1

2

How awesome is that? I can’t think of a better way to show how unnecessary words and sentences creep into writing.

It’s a reminder to me that I’ve become lazy in my writing. I rarely do any editing and forgot that it is the most important part of writing. Carefully removing unnecessary chunks and words. Changing the order of things. Sometimes deciding not to publish the post at all.

I’m looking forward to finishing the book. Even in just the first few chapters, I have a renewed motivation to improve my writing!


What do you think or do differently to mostly everyone else?

I’ve been watching some of the early Curb Your Enthusiasm episodes recently and theres no two ways about it — Larry David certainly thinks and does things differently to mostly everyone else.

It got me thinking, is that really such a bad thing?

Ok, so you might not want to replicate Larry David’s approach to life (although it’s an entertaining way to consume time). But, if you think or do some things differently to mostly everyone else, it means you’re consciously not taking a path that the majority expects of you. It makes you interesting and unique. It makes you stand out a little — and that’s a good thing.

I would say nearly all of the people I think are successful and interesting, tend not to follow a normal path — or they have several things about them that are unusual. It might be something they believe, that others would mostly disagree with. A habit or hobby that is different to the norm. Maybe they take unusual risks. But there is always something unique about how they think and act.

Off the top of my head, here are a few:

  • Jason Lengstorf sold everything he owned and has been traveling the world and working remotely for nearly two years.
  • Steve Jobs dressed in an unusual way, wearing the same outfit mostly every day — new balance trainers, jeans and a black roll neck.
  • Wim Hof has some unusual disease prevention and fitness habits. He takes ice baths, practices extreme breathing, swims long distances under polar ice and climbs Everest in nothing more than a pair of shorts.
  • Mark Zuckerberg & Bill Gates made risky decisions early in their career and dropped out of top colleges to start businesses.
  • Richard Branson had an unusual approach to impressing his girlfriend. He bought an island (that he couldn’t afford at the time).
  • Alastair Humphreys set off on his bike one day and ended up cycling around the world. It only took him four years.
  • Benjamin Franklin started his day in a way unlike the majority. He would take an ‘air’ bath, which involved opening the windows of his house and then sitting in front of the window naked, to get the full effects of the fresh air.
  • Nate Green works a very focused and productive ~ 4 hours a day and spends the rest of his day away from the computer, not doing work.

It got me thinking. What is it that I think or do, that other people would consider unusual?

  • I ditched my smartphone for a Nokia 130.
  • I’m not on Facebook.
  • I wake up very early. At the moment about 5:30am, but in the past I would wake at 4:00am and be in the office for 6am.
  • I’m a minimalist. I own fewer things than most people and am constantly throwing things away — normally to the dismay of Ella (usually because I’ve throw something out that she wanted to keep!).
  • I stick to a paleo diet — so don’t eat dairy, grains, legumes or processed food (well, for the most part!)
  • I don’t own a microwave. I think they look cumbersome and ugly.
  • I have zero interest in politics and don’t vote. I also do my best to ignore news.
  • I chose to step out of a high paid career to pursue a life with more freedom (this is a work in progress).

Ok, not all of the above are overly unusual, and I certainly stray from them now and again. But, they do tend to put me in the minority.

It’s also worth noting that this isn’t confined to people, it also applies to companies. When you’re looking for a company to work for, I think it’s useful to look for things that they do differently than most other companies.

Again, it might be a view they have, something about their culture, the CEO, the way they work, how they are structured etc. Beware of gimmicks though. I’ve seen some companies stand out, but only because stand outing was a specific strategy to attract talent. It wasn’t genuine.

Basecamp is a good example of a company doing a number of things genuinely differently. One that jumps to mind is they work 4-day weeks from May through to August. How cool is that? They don’t do it because it sounds cool, they do it because they believe it works for them.

What do you think or do differently to mostly everyone else?

Back to the title of the post. What do you think or do differently to mostly everyone else?

If you can’t come up with anything, it doesn’t mean you’re doing anything wrong. But, it might be a sign that you don’t experiment with things outside of the norm very often. And sometimes it’s the things outside of the norm that can add surprising value to your life.

Food for thought.. 🙂


Book review: When Breath Becomes Air

I read ‘When Breath Becomes Air’ by Paul Kalanithi last week and it was awesome. I loved it so much, I finished it the same day.

Paul was diagnosed with terminal lung cancer in his thirties, just as he was about to complete his training as a neurosurgeon. With the blink of an eye, he went from doctor to patient – just as everything he had worked so hard for was starting to come full circle.

The book is a reflection on his career and how he faced his illness and mortality. The surgery stories are just mind-boggling. I can’t get my head around how surgeons approach long, risky operations with a sense of normality. It makes you appreciate how gifted and special they are.

The braveness and selflessness with which Paul coped with his illness is inspiring. You have to read the book to get a real sense of it.

I’m also envious of how good the writing is. It’s deeply personal and easy to read, which must have been so hard to write. He effortlessly moves between being funny and dealing with devastating setbacks. The writing is so good, you often feel like you’re in the room with him.

I’m finding myself thinking about a few things after reading When Breath Becomes Air:

Paul left behind a wife and an eight-month-old daughter. The moments he savored with his daughter before he passed were incredibly moving. I could feel myself welling up, and even as I write this, it feels uncomfortable. My daughter Fearne is nine months and I couldn’t begin to think about not being a part of her life with Ella over the coming few decades. It made me think about being grateful for what I have and savouring my own moments with them even more.

I’ve also found myself reflecting on being a good person and living a good life. If I was asked ‘what is the first thing that comes to mind when you think of Paul Kalanithia?’ – I would say ‘he was a good man’. I would like for people to think that about me.

One of my favourite all time books and highly recommended.

Here are a few links for further reading:

Paul Kalanithi – Wikipedia
PaulKalanithi.com (his interviews and essays are grouped here)