Doing the math

Each plant has a certain amount of space it needs. Plant them too close together, and your vegetables will be too crowded to thrive. (Image by Th G)

Eclectic Music used to bill clients for music lessons every six weeks on a set schedule. It was miserable.

It was a long enough period of time that it was a significant sum of money, and for late-payers it still didn’t solve the core problem of the every-four-weeks billing system, which was the sense of constantly being billed. “Can you check that again? I don’t think we owe. I feel like we just paid.”

Yeah, you “feel like” you just paid because you were two weeks late on your last payment, and that was three weeks ago, and this is your reminder about next week’s payment. I get it — I am not good at time either. But time keeps ticking, and the bills aren’t based on feelings. They’re based on numbers and reality, which cannot be bargained with or negotiated away. Those who don’t understand this will struggle, but those who take the time to do the math will benefit greatly.

There are many systems in place in the world that are actually built around the expectation that people won’t think things all the way through. For example, a conventional fitness center will sell memberships based on the fact that most people will use their membership only rarely, pricing the membership in such a way that the monthly fee is a no-brainer. The result is hundreds of dollars for a half-dozen trips to the gym until you finally get around to canceling your subscription.

Or take ride-sharing services like Uber and Lyft. Drivers are paid in such a way that they are essentially selling the depreciation of their vehicle. They might begin with a relatively high hourly rate, but when you factor in the immediate costs of operating the vehicle plus wear and tear, it isn’t such a great deal.

And then, the way cars are sold—with auto loans that stretch the purchase out into five years of payments—means that people have bought cars that they can’t afford, lured by the apparently low monthly payments. When you run the numbers, you realize that you’re paying thousands of dollars more for the vehicle than it was worth in the first place, and the value keeps dropping every day. So that Uber driver is potentially driving to recoup the cost of a depreciating asset that, when you factor in finance charges, they overpaid for; meanwhile, the car is declining in value with every Uber trip.

It’s easy to see that ignoring or not understanding the math leaves you vulnerable to being exploited. However, fully understanding the math is powerful. My colleague Jen, like many people, has a childhood history of math trauma, but she deeply understands the power of numbers and how to wrangle them. In our latest project, we help teams to be more productive in part by being more realistic about how long tasks take. If you have three hours of meetings and four hours of tasks and workflows (30 minutes of email processing, 45 minutes to write that proposal, 15 minutes of planning for tomorrow, and so on), your day is already full and you can’t add anything to it. Sorry, Boss. What do you want me to not do so that I can do the ninety-minute project you’re asking for? The numbers don’t lie.

With a clear grasp of the math, we can be more intentional about how we want to reach our goals. Back in music lesson land, I’ve seen lots of people skimp on an instrument, for instance, using a $30 ukulele when $75 can get you a beautiful instrument that will actually stay in tune. I understand that not everyone has the extra $45 to spend, but when the lessons cost $1,440 for a year, that “extra” $45 to have an instrument that isn’t a toy could mean the difference between wasting $720 on six months of lessons and quitting in frustration versus hanging in there and actually learning to play ukulele—and sounding good when you do.

Paying more attention to the cold, hard, numbers has helped me to get out of debt and run a profitable business. It’s also helped me to ameliorate a lifelong tendency to be late. I know there are still places where I could be more effective and make better decisions if I took the time to do the math, and I’m working on addressing them as they come up. Even though limitations and constraints can be frustrating, they are also incredibly valuable. When I use data and feelings to guide me, I will enjoy a more sustainable and satisfying result.

Have you ever been surprised at how much time or money you were actually spending on something when you ran the numbers? How have you used numbers and data to guide your decision-making? On the other hand, are there any places where you’re willfully ignoring constraints? I’d love to hear your thoughts.