The Escape Artist is an environmentalist. I want us all to live in harmony with the birds, the flowers and the little kittens.
At the same time, The Escape Artist believes in capitalism and getting rich. And I don’t see these 2 values as being in conflict.
If the human race can reduce waste and its environmental footprint then maybe, just maybe, we are not all doomed. With smart design cities, we could all live much cheaper and be rich. I don’t think it would be that difficult…we just have to stop screwing everything up.
But this is not the fault of capitalism. In capitalism, the price mechanism provides incentives to allocate and use scarce resources as efficiently as possible. Good companies recognise that just making a profit is not good enough. The best companies maximise profit by continually looking for ways to reduce waste and costs whilst finding ways to grow revenue.
We would do better to think of our finances as if we were Chief Financial Officer (CFO) of our own companies. Let’s take food as an example. The less food we waste, the less we need to buy and the more we can save. That’s good for us as individuals as well as the environment.
The less food we waste in aggregate, the less land need be intensively farmed and the more space there can be for wilderness, nature reserves and other good things. It may not be obvious but there’s a link between throwing food (and other stuff) away and screwing up the environment.
According to WRAP:
- The average UK household is throwing away the equivalent of six meals every week; and
- An area almost the size of Wales would be needed to grow all of the food we throw away from our homes each year.
Eliminating the cost of food waste is one of those areas that is too small on its own to get anyone to financial independence. This is not like firing your financial adviser and managing your own portfolio which could save many people hundreds of thousands of pounds.
But here’s the point. If you have a mindset that minimises food waste, you’ll probably minimise other wasteful spending. So eliminating food waste is not a bad place to start. Unfortunately most people don’t fully understand the power of the aggregation of marginal gains. So The Escape Artist is here to help join up the dots.
We all have different sides to our personality. To maximise earnings, we may need to sell, charm and influence other people. But to eliminate food waste, I embrace my inner beancounter.
Imagine you are Chief Financial Officer of FU Money plc, a company whose mission is to maximise profit and pay you dividends for the rest of your life so you never have to work again. Here is the CFO’s guide to fridge management:
Reduce stock levels (have less stuff in your fridge, part 1)
Think of your fridge as a warehouse full of valuable inventory sat there tying up shareholder capital.
I think of surplus food as taunting me when I open the fridge door and look in.
Hey sucker, you paid good money for me and in a few days time, if you don’t eat me, I’ll be gone along with your money. Ha-ha-ha-ha!
When deciding what to eat, I make it a priority to use the fresh foods that are already sat in the fridge in abundance before buying or defrosting other stuff.
Reduce complexity (have less stuff in your fridge, part 2)
Effective inventory management is easier when you have less complexity, less clutter and fewer SKU’s to manage.
When house hunting, I was struck by how people’s garages were usually stuffed full of unused treasure (or junk, depending on your point of view). Most people’s fridges are stocked the same way.
A fridge stuffed full is a sign of unnecessary complexity. It creates mental as well as physical clutter. In the modern world, we face information overload and too many choices. So reduce complexity…by having less stuff in the fridge.
Analyse and optimise (you are not going to starve)
A CFO balances the cost and benefits of carrying stock to find an optimal solution.
On one hand, the higher the level of stock carried, the less likely a business is to experience stock outs where the customer can’t get the item they want. On the other hand, stock is costly to produce and store and it ties up capital all the time whilst its sat in the warehouse.
Our monkey brain does not do cost : benefit analysis or optimisation. Our monkey brain shouts things like:
I’M HUNGRY NOW! I DON’T WANT TO STARVE TO DEATH! WHO CARES WHAT IT COSTS?!
My wife hates the thought of a near empty fridge. Evolutionary biology may help explain this. One of women’s greatest nightmares throughout history would have been losing a child to starvation.
But the CFO realises that starving to death is a remote scenario in the West these days. We are omnivores, so don’t worry about occasionally running out of any one item. You won’t starve and skipping the odd meal makes you stronger.
Use technology effectively (e.g. air-tight containers, freezing)
The CFO recognises that technology can improve efficiency and uses it wherever it makes financial sense.
We used to have a Chinese takeaway habit which left us with loads of those air tight plastic containers that the egg fried rice came in. Put through the dishwasher, they come up as ideal food containers that then extend the fridge life of anything.
For example, most meat from the supermarket comes in plastic packaging that is airtight. As soon as you open this, air gets in and allows bacteria access. By putting the meat in an airtight Tupperware container you automatically extend its life by several days.
One thing I now do is store more fresh veg in the freezer. My “goto” breakfast is scambled eggs and spinach doused in butter. Spinach is a superfood and the nutritional content is not lost by being frozen.
Use the best information available (Your nose is the best judge)
A good CFO uses the best available data for financial decision-making.
What if you had the most sophisticated and sensitive food contamination detection system in the world? One that had been developed over the last billion years or so, tested on all different foodstuffs by an incredibly wide range of people? You wouldn’t ignore this system and instead rely solely on some dumb paper label made up by health & safety bureaucrats who can’t see / touch / smell the food.
You already have this system. It’s called a nose.
Smell is the best measuring instrument for food freshness. I will happily eat food after its recommended date if it looks and smells fresh. I use these dates as information but don’t follow them slavishly. “Best before”, “Display until” and “Use by” dates are different things. I place more weight on “Use by” dates as these are more relevant to food safety.
What gets measured gets managed (out of sight is out of mind)
A good CFO knows that what gets measured gets managed. People can make better decisions when they have the right information to hand.
Many fridges have drawers at the bottom which are out of your line of sight. We used to keep fresh vegetables in these. The result was that we ended up throwing away lots of vegetables.
Out of sight is out of mind. So put the items with the shortest shelf life (e.g. fresh salad leaves) at eye level so they don’t get ignored.
I place labelled food so that the Use by / Best before date is visible. So don’t stack lots of food on top of other food items. Make sure you can see the label which reminds you when something is getting towards the end of its fridge-life.
The stuff to put in the bottom tray should be the stuff with the longest life that you actually want out of sight. So that’s where I put beer and wine. If I open my fridge and see a load of booze sat there, the unconscious message is DRINK ME!
Everytime you see a treat that you have to refuse, you use up some of your limited stock of willpower. So keep the booze and choccies out of sight.
Utilise your existing assets (check freezer before buying more)
This sounds so ridiculously obvious that I almost hesitate to write it down. But before you buy more food…check the freezer. I’m embarrassed to say that we have 2 freezers. And they are often nearly full. And yet we sometimes buy more food to put in the fridge when we already have the same stuff in the freezer. So now before I fire up the laptop to get a new Tesco delivery order in, I try to go to the freezer and take stuff out to de-frost in the fridge to keep the inventory turning over.
Communicate goals clearly (stick this on your fridge door)
There are 2 components to doing the right thing. Firstly we have to know what the right thing is. Second we have to action that on a daily basis. By setting goals at the outset and regularly reminding ourselves of these, we can help keep on track.
Often the best hacks are the simplest. The easiest way I improved what I ate was pinning The Bulletproof Diet Roadmap to the front of my fridge. You can’t miss it and get a reminder every time you go the fridge. I don’t always eat in 100% compliance with this. But as a visual guide to reducing carbs, cutting out junk and sugar and generally eating a more natural diet, its great.
You can get a copy from the Bulletproof website here.
Conduct “whole life” investment appraisal (buy the right fridge)
When buying a fridge (or any other capital equipment), you should ideally try to consider the costs on a through life basis. In other words, don’t just focus on the sticker price (important though that is) consider expected lifespan, servicing costs and electricity costs as well. All electrical appliances are rated for energy efficiency these days and you want something rated A or B.
You may decide life is too short to do your own analysis of fridge running costs and I wouldn’t blame you for that. But in that case, apply The Principles of Lifehacking. Find a recommendation from an unbiased source.
We often overlook the importance of everyday overhead costs. A fridge is running all day every day, so differences in energy efficiency really matter. A good CFO reduces operational leverage by reducing fixed overhead cost.
If all of this seems like effort, I get that. But its funny how much lifeforce we put into working for The Man. One of the tricks of getting to financial independence is applying the same effort and creativity to your own life.
Want more like this? Check out this interesting UK food sharing venture that aims to eliminate food waste.