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My wife asked me a question the other day that I really didn't even have to think about before answering.  She asked if I've noticed a measurable decrease in our spending each month as a result of our daughter no longer being on baby formula.

Our daughter is eighteen months old, so she's been off of formula for quite a while.  She now eats ‘people food' and drinks milk.  She was on a more expensive formula than the standard formula, though not the ultra-expensive stuff.  Luckily for us, the type that she required did have a version available in Target's Up & Up brand.

But, the answer to my wife's question was a very quick “No”.

Mrs. Beagle became a little annoyed and even asked again, probably thinking that maybe I had misunderstood the question.  I hadn't.  The answer was still no.

She didn't understand and you could tell that it bothered her as she had obviously expected the answer to be no.

The conversation led me to think about how we often make assumptions and how assumptions which prove to be incorrect can be problematic.  So, why do we make incorrect assumptions.

Well, I think in may cases, we don't take into account all the facts.  When my wife asked about the formula, she took into consideration only one aspect, which was the cost of the formula.  She assumed that since we were no longer buying formula, those costs were gone.  Which, in and of itself, is true.

However, there are other costs that factor in.  Our daughter replaced formula with milk.  While milk is vastly less expensive than formula, there is still a cost there.  Our daughter also eats regular food, which means we have to buy slightly more of that, meaning an overall increase in our grocery bills.  As she (and Little Boy Beagle) continue to grow, they will consume more food which will cost money.

Finally, there's the indirect costs.  Think about how the cost of food rises, which eats away some of those savings.  Just from the food perspective, you can see how while formula costs might go down, other related costs to meet their nutritional needs will go up, offsetting all or part of the ‘savings' from the elimination of formula.  They need bigger clothes which can cost more money.

One of the basic facts of being a parent is I'm learning that costs do not really seem to decrease in any fashion whatsoever.  I guess after they move out and start earning their own keep the costs will go down, but until then, as they get bigger, so will the cost of raising them.

Here are a few tips on how to handle things when the answer you get doesn't match the assumption you had made when you asked the question:

  • Understand the butterfly effect – Looking at something from a cost perspective will often not tell you the complete picture, as my wife learned with her question about baby formula.  Changing one thing, the purchase of formula, also created changes in other areas which all had a ripple effect on how and where we spend money.  Bottom line, too look at just the formula costs was overly simplistic.
  • Don't spend what you don't have – It occurred to me that this could have led to dangerous outcomes had the assumptions not been about something so simple as baby formula and had it not been by someone as financially responsible as my wife.  I'm sure others out there have made assumptions on much costlier items, and made follow-up actions that proved dramatically incorrect.  Think about those people a few years ago who assumed that they could afford the monthly mortgage payment that their lenders told them they could afford.  By simply trusting the assumption, many people found themselves in dire straits and ended up losing their home, their credit, and probably a good deal of money along the way.
  • Make it a learning opportunity – I think my wife was disappointed that we weren't spending less as a result of not buying baby formula, but I know that once we talked about it, she thought about things differently.  If you find that an assumption you're making isn't correct, take it as an opportunity to understand what went wrong into the assumption you had, and how to best apply it moving forward.  I'm pretty sure now Mrs. Beagle will be thinking more broadly about things like offsetting costs that, through not fault of her own, she hadn't thought of in the first place.

Readers, when have you recently made an assumption that turned out to be incorrect?  How did it affect you and more importantly, what did you take away that will lead you to making more accurate assumptions in the future?