Unintended Consequences

“Be careful what you measure.” It’s an adage that was planted in my brain quite a few years back, probably in organizational behavior class in business school or as advice to a newly minted engineering manager. The idea was to avoid setting business goals that might result in unintended consequences.  A classic example would be to reward a software developer for number of lines of code written, only to end up with a lot more code – AND a lot more bugs. 

Since then, this idea has popped up regularly in the context of financial planning, including in this Transaction Cleanse. In a recent blog post, I mentioned that I thought some of my success in avoiding spending was simply that I am measuring it. That is absolutely true, but let’s dig a little deeper to see if there might be any unexpected downsides to not making a purchase just to polish a metric.  

For starters, it depends on the purchase in question.  Is it that post-hike chocolate syrup-covered scoop of Bailey’s ice cream which, truth be told, neither my health nor wealth will benefit from? Or are we talking about holding off on getting gas simply to see that coveted zero on the Transactions tracking spreadsheet? If I’m lucky, I might end up paying a few more cents a gallon when I have to refill in a panic.  If I’m less lucky and I push it so far I run out of gas, I might get stuck paying for a cab ride to a gas station.

But listening to an interview with author Gretchen Rubin on Jean Chatzky’s new podcast HerMoney, I realized there is another factor at work: the tendencies of the purchaser.  In particular, Gretchen confessed to being an “underbuyer”.  That is, she delays buying things she needs until she absolutely has to have them, or later.  For example, she might tell her kids: “Kleenex? Oh, just use TP instead.”

Those who read my Dumb Bunnies post will suspect that I am the opposite, an “overbuyer.” I go to great lengths to avoid running out of anything. This is partly to keep trips to the store, which I detest, to an absolute minimum. It’s also because I don’t like using TP where Kleenex does the job better. Plus, variety is the spice of life.  So I need to have 15 boxes of cereal because, hey, maybe today I want Cheerios, not Go Lean Crunch. And there's no telling what might happen if I have to eat plain granola when I’m in the mood for Trader Joe’s Ginger Clusters!

But let me get to the point, lest you start to think this is a food blog, not a money blog. For an underbuyer like Gretchen, tracking Transaction Cleanse metrics might tempt her to live even even closer to the edge, the only buffer between her family and disaster a few squares of TP. On the other hand, being an overbuyer means that, for me, delaying a purchase so my metrics look good is likely harmless.  At worst, I might get stuck blowing my nose on Charmin a few times.  Of course, the price of this buffer means I’m a bit lighter in the wallet. But that’s a metric for another day…