I recently came across a wonderful essay by Michael Barrish entitled System. In it, he describes a model for life made up of three stages:
In 1988 Laura and I created a three-stage model of what we called “living process.” We called the three stages Good Thing, Rut, and Transition. As we saw it, Good Thing becomes Rut, Rut becomes Transition, and Transition becomes Good Thing. It’s a continuous circuit.
A Good Thing never leads directly to a Transition, in large part because it has no reason to. A Good Thing wants to remain a Good Thing, and this is precisely why it becomes a Rut. Ruts, on the other hand, want desperately to change into something else.
This pattern immediately made sense to me. In most aspects of my life, I follow this cycle, except that the three stages are never anywhere near equal in length.
If you were to look at the long scale of one of these cycles in my life, it would go something like Good Thing, Rut, Rut, Rut, Rut, Rut, Rut, Transition, Transition, Good Thing, and so on, in an endless cycle.
The “Good Thing” is what I’m always striving for. It’s as close as I can get to something like an ideal life in that aspect of my life.
However, over time, things change. I hold onto some aspects of the “Good Thing” in the habits I’ve created or the automatic things I’ve put into my life or the permanent alterations done during the earlier Transition. Some aspects fall away, though – the more difficult habits in terms of time and effort often fall away, as do things that fall away due to the hustle and bustle of everyday life. I don’t think this is quite a Rut, but a maturing of a Good Thing.
Sometimes, however, I fall into a Rut. This Rut is usually better in some ways than earlier Ruts, as it encompasses more of what I value right now and more knowledge and understanding of the world, but it’s still a Rut. It’s an area of my life where I’m not actively thinking about changing anything and just going through the motions.
What ends a Rut? There are usually two agents of change. One, I notice something in my life that I’m unhappy with. It’s usually a tiny pebble, but if I don’t do anything about it, it ends up being like a pebble in my shoe, a constant irritant. It eventually nudges me to make some changes due to constant irritation with that aspect of my life. I usually pick up on this when I’m thinking about my life, which is something I do regularly and will discuss below.
The other agent of change is an unexpected event in my life. Perhaps it’s a medical crisis, or maybe it’s an addition to my family. In either case, that unexpected event either causes major disruption to my routines or forces me to really consider aspects of my life that hadn’t been on my mind prior to that.
During a Transition, I’m usually deeply focused on making changes to my life. Sometimes this is fun, like when I notice something I want to change in my life and I choose to make those changes. Sometimes this isn’t fun, like when an unexpected event drops on my lap.
Good Things, Ruts, and Transitions in My Own Financial Life
My own personal finance history is a good example of this pattern.
When I first graduated from college and moved into a full time career, the huge increase in salary was a Good Thing. It enabled me to do a lot of things that I just couldn’t do during college and I dabbled in a lot of consumer behavior. I bought a new vehicle. I started hanging out with a heavy spending group of young professionals. I bought lots of expensive meals and rounds during happy hour. Sarah and I adjusted our standard of living upwards.
After a while, this turned into a Rut. We kept up a lot of expensive routines, but they gradually became just that – routine. After a while, I even recognized that I was in a Rut.
So, what moved me out of a Rut and into a Transition? There were two things, really, that happened pretty close to each other on the calendar. The first was the birth of my oldest child, which brought about a lot of changes in many areas of our life. The second, and perhaps even more influential, was a day when I realized that our credit cards were maxed out and we didn’t have enough money to pay the bills.
Those two events brought Sarah and I into a Transition period, where we rebooted our entire financial picture. We radically altered our spending habits, chopped off a lot of debt very quickly, and put ourselves on a much healthier financial path. That was clearly a Good Thing.
Since then, I think we’ve largely stuck with the Good Thing. We have a lot of good spending habits that we stick with – we’re not perfect, but pretty good. We’re making great financial progress toward our goals year in and year out. Most of that is due to two things: we’ve automated savings for most of our big goals and we hammered some good sensible spending habits into our heads. Our life doesn’t feel like a repetitive and endless cycle that we’re unhappy with, which is what a Rut can feel like.
We’ve certainly broken out of Ruts in more narrow aspects of personal finance over the last several years. For example, we decided to cut the cord and get rid of our cable package, completely changing our family’s entertainment routines. That was a Rut jolted into a Transition. In terms of our overall financial picture, though, we’ve mostly been in a positive Rut, one that we’re happy with not changing in any radical way.
Looking at my life through these principles reveals some valuable truths that apply well to personal finance and to life.
Good Things Turn Into Ruts When You Don’t Think About Them
The aspects of my life that go from being a Good Thing into being a Rut are aspects where I’m not giving them the time and attention that they deserve. I start taking them for granted. I stop asking myself what I need to do to keep this Good Thing going.
Personal finance has stayed in the Good Thing category for so long because I give it a lot of attention as part of the process of writing articles for this site. I’m forced to think about my finances in great detail.
What about the other areas, though?
For me, the best way to keep Good Things going in my life is through regular time spent reflecting on my life. I consciously put aside time in my life to think about the major areas of my life and whether I’m happy with their direction in general or with specific aspects. This takes place in four distinct ways.
One, I spend a bit of time each morning reviewing the day ahead of me. How am I going to spend my time today? How can I spend it in ways that are most valuable to me? What do I most need to get done?
Two, I spend about 45 minutes journaling each day. I use a technique called “morning pages,” which basically means you open up a notebook and just start writing whatever comes to mind for the next 45 minutes. I find that my mind often goes down a rabbit hole of some aspect of my life and I end up working out what makes me happy or unhappy about that aspect and what I should change.
Three, I review the things I want to change about my life once a day in the evening. I have a list of things I’m working on that I want to improve about myself and I ask myself if I did my best today to improve in those areas. I actually give myself a 1-10 score on each of those things. I wrote about this in detail in the article Did I Do My Best Today? and in my review of the book Triggers.
Four, I do a weekly review where I consciously walk through each of the nine major areas of my life and make sure I’m doing something positive in each of those areas. The nine major areas are physical, mental, spiritual, social, parental, marital, vocational, avocational, and financial. For each of those, I just ask myself what I did in that area that was positive and meaningful, whether I’m happy with my life in that area, and what I might want to do in the coming week in that area.
Finally, I do a big review every three months. I usually block off a work day to sit down and give each of those nine areas a really in depth review. Are there any “unclosed loops” in those areas? What would I like to do in those areas for the next 90 days? Am I happy with this particular aspect of my life? If not, what can I change about it to bring me closer to happiness?
I’ve found out that these processes do a really good job of figuring out which parts of my life are Good Things and which ones are falling into Ruts, at which point I try to inject some kind of Transition into it. What’s a better way to do this? How can I get there?
The Difference Between a Good Thing and a Rut
The difference between a Good Thing and a Rut is whether or not you actually feel positive about the results of your efforts. If you have a Good Thing going, then you feel good about the effort you’re putting in and the results you’re getting in that area of your life.
On the other hand, when you start to feel like your effort is falling behind or you’re no longer happy with the results you’re getting or you’re finding that this particular area of your life isn’t bringing you real joy any more, then you’ve fallen into a Rut.
The trick is that this shift often happens subtly and quietly. You often don’t even notice it. It just happens. Because of that, you can be in a Rut for a very long time because you’re still thinking of it as a Good Thing because you’re not really looking very close at it. You’re just going through the motions.
A Rut Isn’t Always Bad, Particularly When It’s Not Your Focus Right Now
One might think that I’m saying that having an aspect of your life in a Rut is always a bad thing. It isn’t. Being in a Rut has an advantage – it frees up your attention and focus to be spent on other areas of your life.
It’s really okay to let some aspects of your life fall into a Rut sometimes. In fact, that’s probably normal and healthy.
However, it means that you should approach Transitions knowing that you have a good chance of eventually falling into a Rut. You want to set things up so that even if you realize you’re in a Rut eventually, it’s not that bad. You’re not digging yourself out of a disaster.
For me, the best way to do this is through automation and routine. I try to make as many things as I can happen automatically in my life, like paying bills and contributing to savings goals and adding to retirement accounts. I try to come up with really good routines that I know work well and have good outcomes and just stick to those routines, often using an actual checklist for them (like my morning routines and my evening routines and my exercise).
Obviously, a big motivation of these kinds of moves during a Transition is to set up a Good Thing in life, but it also ensures that when a Good Thing becomes a Rut, it keeps chugging along in at least a somewhat positive direction.
Transitions Are About Thinking, Good Things Are About Refining and Doing, Ruts Are About Continuing
A big part of the value that this model can add to your life is that it can make your Ruts a whole lot better. Obviously, Transitions and Good Things are wonderful parts of life, but the reality is that parts of our life will be in a Rut sometimes. The question is what you can do to make that Rut as good as you can.
For me, I think the best approach is to look at a Transition as being mostly about thinking and a bit of experimentation. You see a problem and you’re trying to learn how to solve it. Ideally, you’re trying to solve it in a way that really fits in your life and makes sticking with these changes as easy as possible while still achieving the goals. That takes thought.
The Good Thing happens when you have a good plan in place and you’re executing it and you feel that forward momentum and it’s good. You might refine your plan a little, but the forward momentum is there. What you’re really trying to do is to make sure everything you’re doing is part of an automatic or nearly automatic routine in your life.
The Rut happens when you’re less focused on that area of your life and you need to rely on automation and routine to make sure that area doesn’t just fall apart when you’re not focused on it. This is where things like automatic contributions to a Roth IRA or automatic weekly transfers to a savings account can make a real difference. You’re in a Rut, but the wheels aren’t falling off the bus.
That way, the only reason to come out of a Rut is when your personal goals change or an unexpected event happens. Ideally, you should never exit a Rut due to a hole dug by your bad behaviors.
So, how does this apply to money?
Automate your savings. Start an aggressive automatic contribution to your retirement savings. Set up a weekly automatic transfer to your savings account for an emergency fund. Turn on automatic contributions to your child’s 529 college savings plan. Those should be Transition moves.
Make a lot of big moves when your focus is on that area of your life. If you’re thinking about your finances, now’s the time to do things like change your auto insurance package or homeowners insurance package. Now’s the time to think about moving to a different area with a lower total cost of living. Those big moves that aren’t easy to undo are powerful ones to do when you’re in Transition.
Build better spending habits. “Better spending habits” doesn’t mean “cutting all spending on everything fun.” Rather, it should mean “cutting spending on things you don’t care about that much so you can afford the things that really matter to you.” Figure that out and refine it over time so that you’re comfortable with some new spending rules for yourself. For example, try buying store brand household products and food staples instead of name brand items. Try establishing a routine at home where you make coffee before you leave rather than buying it on the way to work. Push yourself toward these kinds of behavioral changes with 30 day and 90 day challenges.
Adopt some sort of daily reflection habit. This is the best thing you can do to ensure that each aspect of your life is either a Good Thing or in a Rut that isn’t going in a bad direction. Some time spent just thinking meaningfully about each area of your life each day, even if it’s just a few minutes, can help you see what’s coming and help you avoid disasters from bad Ruts.