What decision can you make today that will prevent you from having to make 100 decisions in the future?

Tim Ferriss asked himself this question. He decided to not ready any new books published in 2020. No reading book reviews, no agonizing over which new books to buy. He talks about his inspiration for the idea:

This was one of the most important lessons Jim learned from legendary management theorist Peter Drucker. As Jim recounted on the podcast, “Don’t make a hundred decisions when one will do. . . . Peter believed that you tend to think that you’re making a lot of different decisions. But then, actually, if you kind of strip it away, you can begin to realize that a whole lot of decisions that look like different decisions are really part of the same category of a decision.”

What’s another way in which we can make a single decision that prevents difficult future decisions?

How about upping your savings rate? Specifically if you got a raise or are anticipating getting a raise. Why not up your savings rate, whether it be in your company’s retirement plan or elsewhere. Not only are you doing your future self a favor, but it prevents your from experiencing lifestyle creep. From a recent Morningstar report:

Getting a raise means an individual’s expenses will increase: First, the higher income will be used to pay for an extra latte to get through the midweek blues; then an extra trip to the spa; then a car upgrade. This phenomenon is known as lifestyle creep, a gradual increase to an individual’s standard of living.

This effect can put someone’s retirement plans at risk because existing savings and other common retirement assets are relatively fixed. And, contrary to our best intentions, many people don’t actually increase their savings rate when they get a raise.

You don’t need to believe in ego depletion or willpower to see how upping your savings is a good idea. Saving for the future is rarely a bad idea. It doesn’t mean you shouldn’t enjoy your newfound income. It just means smartly balancing these competing needs.

Morgan Housel in a recent post talks about how financial well-being is the confluence of income, life style and savings. Earning more and spending all of it is the very definition of lifestyle creep. Morgan writes:

The world is filled with the financial equivalent of athletes who finish every workout with four Big Macs. Wealth, at every income level, has less to do with your gains and more to do with your ability to leave gains alone without cashing them in.

That luxury car, or other object, you crave isn’t likely to boost your happiness over the long run. The thing is nobody, who matters, really cares what car you drive. What matters more for your peace of mind is the knowledge that you are making an investment in your future. Your future self will thank you.