While sitting in a long line of traffic, I started thinking of a block that creeps into many people’s decision-making: they try to avoid spending money, but wind up losing opportunities that would have earned them more than they would have spent.

That day, the toll bridge in Seattle had been shut down, so all of us were shunted on to the other, non-toll, bridge. For $3.69, you can usually get across the toll-bridge quickly and easily. The other bridge has become a stop-and-go nightmare as so many drivers choose that route to save money. While I was experiencing the waste of time that many people willingly choose, I was thinking about how gladly I would have paid the toll so I could get back to my office an hour earlier and make some money. Instead, I was spending more time driving, NOT getting work done.

Traffic Jam!Fooled by a veneer of rationality?

Usually, a quick way to test whether you have an internal block is to look at whether your actions are rational or irrational. If, rationally speaking, you know it makes more sense to get your report into your boss early, or finish your billing on time, or hold your temper around a client, and yet you consistently do the opposite, it’s a fair bet that you have an internal block that is keeping you from acting rationally. Yet when saving money is part of the equation, our actions can sometimes appear rational on the surface even when a closer look shows us they are not. This veneer of rationality surrounding saving money can keep us from recognizing—and challenging—our own block.

Take that pesky toll. For most people reading this, $3.69 is a trivial amount of money. Pay the toll, if it will buy you upwards of half an hour of time, and you can put that half hour into things like completing projects early, getting more work done, or networking—any number of ways to impress your boss or lay the groundwork for a new job, either of which can lead to a lot more money in your pocket than the outlay for the toll. What is a half hour of your time worth, if you had to reach into you wallet and pay for it? If you own your own business, you can use the time to put your efforts into bringing in more clients, creating a new service or product your customers need, or other efforts to make your company more valuable. Finally, at the very least you could use that half hour for some real downtime (going for a walk in the park, playing with your kids, canoodling with your significant other) that will improve your mood, creativity, and/or quality of life. All for the low, low price of $3.69.

Saving Money Can Cost You

But so often, instead of looking at what an outlay brings us, we immediately think “I can’t afford it,” or “I don’t need that.” A lifelong habit of being careful with money—or a lesson painfully learned from a sudden loss of income—leads to an automatic rejection of any expenditure that we are not forced to make. And that can paradoxically lead to a loss of opportunities and therefore a loss of money.

There are a lot of things we “make do” with in order to save money that may in fact be losing us money. Anything that saves you time that you could better use to improve your business or advance your career can fall into this category. This includes everything from buying new software to having an expert prepare your taxes to picking up dinner at the deli counter on the way home. In fact, anything that you do that is not central to your business or career that could be outsourced is something to consider as a trade off for the dollar value of your time, like bookkeeping, chauffeuring the kids around, rotating the tires on your car, or cleaning your home or office.

Ooooh, that last one is an especially big bug-a-boo for a lot of people. Somewhere along the line they learned that it is morally wrong to pay someone else to clean for them when they are able-bodied enough to scrub their own toilets. But look what you lose when you take the time yourself to do that. You take time away from building up your business in ways that only you can. Just about anyone can vacuum; only you can do the rainmaking, or provide your professional services, or do whatever your customers come to you and not the other guy for. And if you work for someone else, taking time to clean your own home means you don’t have that time to get the certification you need for the next step in your career, or to meet someone in your field who could help you get into that great company you’ve had your eye on, or any of the other things that might move you up.

How To Determine Whether to Spend the Money or Not

To find out if you have a block around spending money that is preventing you from actually making money, try this exercise. Take a piece of paper. Draw a line down the middle. On the left-hand side, write down something you have been avoiding and what it would cost you to buy it. On the right-hand side, write down what it would buy you (e.g., “time to work on presentation” or “time to take on one more client”). Estimate what that could be worth to you. Yes, I mean a dollar amount (“a $5000 bonus” or “$30,000 for one additional client relationship over the next five year”). Now, come up with a percentage likelihood that you will achieve that benefit. (e.g., “15% likelihood that it will lead to the bonus” or “100% ability to work with potential client off my waitlist”). Multiply the potential worth by the percentage likelihood. If the resulting number is greater than what you wrote down on the left-hand side of the page, you have just shown yourself that the rational choice is to spend the money here.

Yes, I know your calculation is not really a hard and fast number, but it is a fairly rational way of estimating what the expenditure is likely worth to you. It is certainly better than a knee-jerk reaction of “spending any money is bad.” Then, if the upside looks like it is more valuable to you than what you have to pay to get it, it is time to spend the money. If it is just too speculative, don’t do it.

Got the Money Block?

Now, if the upside is more valuable than what you would pay and you still can’t bring yourself to do it, you’ve got yourself a money block. Do what you can to stay in your head, being rational, about the expenditure instead of just listening to your feelings that are screaming “Don’t waste money!” You’ve already calculated that it wouldn’t be a waste of money. So take a deep breath and make the commitment to doing the rational thing.

Of course, if you are currently working on a shoestring and you really have to pinch every penny, then you will have to trade some of your time for money, at least until you get some leeway into your system. Then, once you have more money that you can use to “buy” time, you will be able to shift your efforts from money-saving to more money-making efforts. For now, do what you have to. But keep doing those calculations. At some point, sooner than you expect, the upside of spending the money will outweigh the downside.

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