Partitioning: How to divide and conquer

Since moving abroad, I’ve split my money across multiple accounts. I didn’t do this on purpose. I fell into it as a result of living in different places.

As I saved more money too, I opened other types of accounts to make better use of money that’s just sitting there anyway. It’s still good to have cash on hand, though, so I didn’t close the first accounts.

As a result, I now have funds distributed across four or five accounts.

I noticed this recently. My primary account looked lower than what I thought it should have been. Because my money’s spread between more accounts, none of them look as big as they would if the money were in just one large account.

All of this probably sounds pretty obvious, not worth mentioning. And that’s what I thought too, until I read of some studies that helped explain how I felt and made me more aware of how useful this might be if I used it more purposely.

The studies show that individually wrapped cookies last longer than if they’re just thrown into a box together, not because of freshness but because we’re less likely to open another package to eat another cookie in one sitting.

The same thing happens with money. A day laborer saves more when his pay is given to him in multiple envelops instead of one big one. Gamblers can help reign in their habit by employing a similar envelop technique, along with anyone who has a habit of spending too much on a credit card.

One researcher calls this “partitioning,” partitioning off segments of a whole in order to create places for us to pause, collect ourselves, and make a new decision, instead of just continuing forward mindlessly.

Mark Twain supposedly said, “Whenever you find yourself on the side of the majority, it’s time to pause and reflect.” Sometimes, though, we need a forced break, a divide, a partition, to remind us to find out where we are in the first place.

With that in mind, in the future, I’ll divide my money even more, on purpose.