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Why efficiency is dangerous and slowing down makes life better | Psyche Ideas

https://psyche.co/ideas/why-efficiency-is-dangerous-and-slowing-down-makes-life-better

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Why efficiency is dangerous and slowing down makes life better | Psyche Ideas
The urge to do everything faster and better is risky. Far wiser to do what’s good enough for the range of possible futures

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We worship efficiency

We worship efficiency

We often see efficiency as good and inefficiency as wasteful. Economists teach us that increased efficiency improves our standard of living and make our lives better.

However, too much of a good thing has the opposite effect. Some motivation produces excellent performance while too much produce choking. Some choice creates good outcomes but too much leads to paralysis and bad decisions. The challenge we face is in finding the right balance.

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Inefficiency creates a buffer

Some inefficiency can be seen as an insurance policy.

Year after year, if you don't get into a car accident, you may think that you have 'wasted' money on insurance. But insurance enables us to be resilient against problems that could overtake us. To be prepared, we need to learn to live less efficiently.

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Analyzing our options in uncertain times

In the face of radical uncertainty, instead of asking which option will give the best results, we should be asking which option will provide us with good-enough results under the broadest range of future states.

Instead of maximizing return on investments, we should be setting a financial goal. Then we should choose investments that will allow us to achieve that goal under the widest set of future financial circumstances.

It's perhaps time to rekindle social norms that serve to slow us down in an uncertain world.

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Inefficiency

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Efficiency Makes us Fragile

Total efficiency constrains us. We become highly invested in maintaining the status quo because that is where we excel.

However, innovation is a threat and change is terrifying. Being perfect at something is dangerous if that is all you can do.

Inefficiency Allows for Change

Inefficiency forces us to develop other traits that give us the flexibility to adapt to changing circumstances.

Leave aside the fear of new challenges. Leave aside the fear of not being the best. When you put yourself in situations where you aren't the most skilled, you learn and grow and adapt. When change comes, you will have a broader range of skills to explore new possibilities.

Try making a budget

  • Create a full inventory of expenses in front of you: Categorize them into fixed and variable; urgent and non-urgent; necessities and luxury; avoidable and unavoidable.
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Financial planning

 ...is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.

Maintain a personal balance sheet

It’s a statement wherein you can jot down your assets and liabilities.

  • Pull together your bank statements and other proofs of the liabilities
  • List down your assets like the bank balance, all investments, home value, and value of other assets.
  • Take a sum of all the assets to arrive at the total value of your assets.
  • List down your liabilities the (car loan, home loan, credit card balances etc.)
  • The sum of all the liabilities will show the value of the money you owe.
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Making Your Budget Too Strict

Budget for the life you have. When you’re going through your budget and assigning spending categories, be realistic. 

Don’t tell yourself you’ll never buy a single discretionary i...

Budgeting for a Life You Can’t Afford

This becomes a problem when you’re spending for a life you can’t afford. It puts pressure on your budget and encourages you to live in a paycheck to paycheck cycle.

Assess your financial situation, cut back on your expenses, prioritize your money goals, and then come up with a new spending plan.

Budgeting Without a Purpose

It’s hard to stick to a budget that doesn’t have a goal.

When there isn’t one, your budget becomes an afterthought rather than a spending plan to reach your financial goals.