red queen effect personal financeI’m endlessly curious about how companies innovate.  It’s fascinating to learn how they adapt to fit the changing needs of the marketplace, and how it plays out over time.

I’m also a huge fan of Apple, if only because I find the company’s designs to be things of beauty.  So when I came across an article about the tablet wars I was drawn in.

In the article, the author discusses the Red Queen Effect.  By the end of it, I began to realize that’s likely one of the things that’s keeping you down as well.

Solve the problem of the the Red Queen Effect to solve the problem to your personal finance problems.

The Red Queen Effect

According to the article, the Red Queen Effect – also known as the Red Queen Hypothesis – “refers to Lewis Carroll’s book,Through the Looking Glass, when the Red Queen character declares to Alice that “it takes all the running you can do to keep in place.” Though the Red Queen was running she was going nowhere, because everything around her was running too.”

In other words, continuing adaptation is needed in order for a species to maintain its relative fitness and continue to thrive.

How The Red Queen Affects Your Personal Financial Problems

If you’re in debt, you need to do something to break the cycle of bill problems.  Adapting to your new reality is of paramount importance if you’re going to solve the problem you’re facing.  Without change, after all, you continue to do the same thing over and over again.  We all know that the same actions will usually lead to the same consequences.

You’re in debt, so you keep on running in the hopes that something will change.  A windfall, a dead relative with a big estate, the right six numbers on a Saturday night.  Whatever you’re hoping for, it’s deus ex machina – the opening of the heavens to provide for the solution to all your problems.

Good luck with that.

How To Avoid The Red Queen

In order to solve your bill problems, you’re going to have to do something different.  Maybe a reduction in your spending or an increase in your income is in the cards.  If you’re self-employed, putting a little more hustle into your day might provide some extra cash flow you can use to pay down the debt.

The only way to know is to sit down with a pen and a piece of paper (I’m a huge fan of the computer, but this is one of those times when you need some paper in front of you) and work out your monthly income and expenses.  Don’t put down your expenses the way you wish they were – that’s not going to help anyone.  Rather, write down your actual monthly expenses.

Next, take a hard look at those expenses and see where you can cut a few dollars without feeling like you’re a step away from begging for change on the streets.  If you can cut, do so.  Now.

If you’re still going to need some help in getting the debts resolves, sit down with a lawyer like me (if you’re in the Los Angeles area or in New York City, sit down with me) and talk about your options.

Perhaps credit counseling or better budgeting will help.

Maybe it’s bankruptcy that will save you.  It may not be what you want to do, but the Red Queen hasn’t been your friend all this time.  You’re going to have to change in order to defeat her.

The good news, however, is that once she’s banished life gets a lot better.

Image credit:   mar.al