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The difference between being good with money and bad with money

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In his memoir, Aerosmith frontman Steven Tyler estimated that he spent about 20 million dollars on cocaine during the 70s and 80s, but now he’s revised his estimate down to only 5 or 6 millon.

Either way, I don’t doubt he had a good time, but I bet that with a different purchasing strategy, those dollars could have bought a lot more good times than he ended up with.

Near the other end of the happiness-per-dollar spectrum you might find the habits of my super-thrifty girlfriend, for whom a month of particularly extravagant and careless living might cost her $1200. The other day I appalled her with my anecdotes about how in 2012 I had let my personal living expenses rise to over $3000 a month. I live on a lot less than that now and I’m a lot happier, and I could still live on substantially less than I do.

I learned to be good with money overnight, just over a year ago, when I stayed up late after discovering Mr Money Mustache and Jacob Lund Fisker. Over twenty years of daily money worries ended abruptly with a simple shift in how I looked at money. In the year between then and now I’ve changed careers, become about ten times more confident in my ability to provide for myself, and I wake up happy every day.

Essentially, the realization I had is that money is permanent. You have it until you trade it for something, and then that trade is permanent — you are thereafter permanently without that money. It’s gone and belongs to someone else now. Therefore it’s important to consider the permanence of whatever benefit you traded it for.

Think about it: when you die, you will have earned and spent a specific, finite number of dollars. For you the number might be 2,193,003, or maybe it’s 8,806,550, or even 217,101,992. Whatever it is, at the moment you die, it is a real and actual number. Even if you never wrote any of your purchases down, there’s an actual list of things these dollars were traded for, and each of these trades contributed to (or maybe detracted from) the overall amount of pleasure and fulfillment you experienced in your life.

There’s an enormous range of possible things to trade these finite dollars for, but ultimately there’s only one thing you’re trying to get for your money, which is quality of life. Universally, we want the feelings in our lives to be good, and there’s really nothing else we value. If you could see your “final balance sheet” and look back on how things went, you’d intuitively know which of those transactions contributed significantly to your overall happiness and which didn’t.

This trading can be done extremely well or extremely badly. The joy-per-dollar efficiency between different trades can vary by factors of thousands or millions. Even a free six-million dollar pile of cocaine would probably remove more joy from your life than it would add, so that’s not a good thing to trade for at any price. A five-dollar coffee might add a bit of joy, but even four of them will only add up to about an hour of low-level pleasure, and then it’s completely gone for your remaining decades on earth. You could have spent those dollars on, say, a copy of Qwirkle Cubes instead, which in my life has already created dozens or hours of free, highly social fun and is virtually indestructible.

I used to think of money as something like a running fuel supply. A life simply burns dollars, and if I want a big, fast, high-horsepower life (and who doesn’t?) then I need to be pumping significant quantities of dollars into it on a regular basis. In this context money seemed volatile, short-term and scarce. In other words, my money situation was a matter of how much I had coming in right now compared to what I wanted to spend right now. My strategy was to find a source of fuel that supplied me faster than I would be burning it once I was living like I wanted to. It always seemed a few years away.

I had grown up thinking like that so it didn’t strike me as odd. Under that mentality, the money situation always seemed to be a temporary condition, like weather. There were nice days and crummy days, heat waves and cold snaps — and the fact that it rained two weeks ago seemed like it ought to have nothing to do with whether it was warm today.

One example of this mentality is the common habit of going out to eat on payday, as if the timing of the incoming money should have anything to do with whether the purchase is sensible or not. It implies an overly zoomed-in view of the relationship between money and happiness.  

Now I think of money as bricks and planks, not fuel. Every expenditure comes out of a large but finite pile of all the dollars that will ever be available to me, not a running pipeline that comes from somewhere out of sight. My mentality now is to build something with my dollars, rather than fuel something with them. The thing I’m trying to build is a life that’s set up to generate happiness on its own, as an inevitable byproduct. Every dollar I burn — rather than place somewhere where it will contribute to my happiness for a long time — is a lost opportunity that will affect what I am working with for rest of my life, to some degree.

When you ask yourself if a given prospective purchase will really improve your life in any lasting way, most of the time the answer will be an obvious no. Being bad with money means you use discretionary dollars to buy good feelings. Being good with money means you use them to build a life situation that generates them every day.

For example, last year I reduced my booze-buying and restaurant-going by 80 or 90 percent, and I can’t imagine there’s anything I’m now missing because of it. The thousands of dollars I didn’t spend would all have been burned for momentary pleasure that leaves absolutely nothing lasting, other than excess bodyfat. The months of dirty, stressful work it took to earn those thousands of dollars would have been traded for nothing but a collection of pleasant but extremely perishable instants in which I could taste yam fries or feel the buzz of beer.

I did this same kind of judicious non-purchasing in a lot of areas, and instead of fleeting feelings I bought many truckloads of bricks; my savings paid for ten months’ worth of living expenses, which I’m using to build a sustainable business doing what I love doing. It was a major purchase, but it’s also making a reality out of the most important item on my bucket list, and it still probably costs less than what 1970s Steven Tyler would pay for a long weekend’s worth of party favors. My purchase will be raising my daily levels of ease and fulfillment (and lowering my stress levels) every day for the rest of my life.

There are certain hard expenses, such as housing, food and internet access, that will always burn away on a monthly basis, although of course you can make choices that reduce these too, leaving more bricks available to build something with. I bake my own bread now, which costs less than a dollar a loaf, is fun to do, and spares me the paragraph of chemical ingredients found in store-bought bread. It’s not a time trade-off either; it can also be done in less time than it takes to go to the grocery store. I also make great use of dried beans and chick peas instead of buying tins, by using a slow cooker. More bricks for the castle every day.

Of course, I still burn some discretionary money, such as going to a 60-dollar concert once or twice a year, but I do it a lot less because I’m unable to ignore the astoundingly high opportunity cost of trading money permanently for a few hours of quickly-dissolving good feelings. I can get good feelings for free.

Travel is something l still find worthwhile, because I’ve learned to do it frugally, and it always leaves me with better social skills, better photography skills, more friends and contacts, and more insight about what’s important to me. But I’m not interested in sitting by a pool at a resort any more.

I’m playing more cards and board games, and going to fewer movies. I’m drinking less beer and I enjoy it more when I do. I’m eating in restaurants less and cooking with quality ingredients more. I rarely buy books, because I already own so many unread ones, and because the greatest bargain in the history of the world is the library card. I do more walking and very little driving.

None of these changes feel like a sacrifice. I’m actually moving away from a life of sacrifice. I was giving up the important things for the forgettable ones.


Photo by Robert S. Donovan

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Tallgirl1204 January 19, 2014 at 10:22 pm

What a lovely and practical, that puts flesh to an observation I’ve had for some time now that some people seem to let money burn a hole in their pockets. We had a tenant who did that– his income was irregular, and if he had a bad week when rent was due, he didn’t have it. We managed to solve this problem with him by putting him on a twice-monthly payment, which was a little bit higher for our trouble. Somehow he could come up with over half the money twice a month, but not all of it at once.

But in reading your article, I realize I am doing the same things. I can’t afford to retire, yet I regard my income as a stream of water flowing by, rather than a pool that could grow deeper so much more quickly if I didn’t keep dipping buckets into it…

Thanks as always for food for thought.

David Cain January 20, 2014 at 8:30 am

You might gain a lot from reading MMM. I highly recommend this post, for perspective on savings rate and retirement:


tallgirl120r January 21, 2014 at 4:00 pm

Thanks– I actually found you through MMM– you all are a nice balanced pair– he with the practical “you must ride a bike” advice and you with the “and maybe your brain works like this…” Thanks to both of you for what you do.

Darky January 20, 2014 at 4:23 am

Wonderful summary of the most valuable insights about money.

Keep up the good work!

David Cain January 20, 2014 at 9:39 am

Thank you Darky

Adrian January 20, 2014 at 4:24 am

Thanks for the excellent reading, David.

I enjoy your posts as I relate to your writing, on many levels. However, I think there are two things that need further examination, in the above text.

1. dining out is not about getting stuffed on bad food and numb with beer. It’s about taking your family out to a relaxed evening, just enjoying each other, without having to worry about cooking and washing dishes. It’s about a change of scenery. It’s about enjoying incredibly delicious food you could not cook at home. My wife and I traveled a lot and eating the local foods was one of the most amazing experiences – we tasted some incredible foods and wines and we created some memories we will never forget. We almost never have time to look at the photos we take, but that incredible combination of scenery, smell and incredible taste, while dining in a remote fishing village in the South of France will always be vivid in our hearts.

2. I believe the key to a fulfilled life is balance – there’s a fine line between spending your money foolishly and becoming cheap. And when you live your life with somebody, you must make sure you both draw the line in the same place – and that you have the same view of the priorities and where the money should go.

David Cain January 20, 2014 at 8:53 am

Hi Adrian. Don’t get me wrong, I love dining out and will never stop doing it. But it is not always a magical experience and there are a lot of reasons people do it that aren’t always so beneficial. A lot of people go out for lunch at work every day or week, for example, just because that’s the workplace culture. Much of my dining out in 2012 was money poorly spent. Low-benefit expenditures are going to be different things for different people.

Would you not say it’s foolish to pass up a fulfilling career in favor of X number of restaurant meals? I was doing that for a long time, but it didn’t seem foolish until I stopped, because I didn’t realize what it was really costing me. There’s a fine line between frugal and cheap, yes. Being frugal is simply being rational with your money, in terms of how much your spending contributes to your happiness, and cheap is an emotional aversion to spending money regardless of benefit.

I think the idea of “balance” can be misleading, because that implies that if you feel stable with your position then you must be at that perfect place on the see-saw. Many people feel like their spending habits make sense because they’re far from both extremes. But I would argue in most cases in the developed world this center-point is way too far in the frivolous direction, for people interested in having the best quality of life for their income level. You never know what’s best until you’ve sat at all those places and noticed how quality of life changes.

Mike January 20, 2014 at 4:27 am

Hi David, another good article on personal finance. Thank you.

I have a couple of questions:

1. What is your view on seeing a financial adviser to help you with your financial decisions? Have you used one before? If so, what do you look for in adviser? If not, why not?

2. If you didn’t have a successful blog but still had the desire to be independent from ‘The Man’, what other forms of making money and attaining personal independence would you pursue?

Keep up the good work.

David Cain January 20, 2014 at 9:01 am

Hi Mike,

1. I have visited with a financial adviser, and while he was friendly and helpful, I know now that I was only there because I had not yet assumed responsibility for understanding and directing my own finances. Financial advisers typically work off commission, meaning they’ll tell you what you should do with your money, and their advice may not be bad, but their purpose is to get your money into their client’s mutual fund, not to help you optimize your finances. The personal finance community on the web is generally against the use of financial advisers. You can learn everything you need to learn about how to manage your finances yourself, and I think everyone should. There are some great personal finance communities online that can tell you where to start. Check out reddit.com/r/personalfinance, or Mr Money Mustache’s forums for a place to start.

>2. If you didn’t have a successful blog but still had the desire to be independent from ‘The Man’, what other forms of making money and attaining personal independence would you pursue?

I would be doing some kind of small business selling digital products, or maybe freelancing. The internet allows you to deliver products and services to thousands of people with low overhead, even if you don’t have a big website.

Alexandre Heitor Schmidt January 20, 2014 at 4:30 am

I would like to add a thought I don’t even know to explain yet. Seems like some kind of ‘butterfly effect’, but when I’m not caring too much about money, like when I just let it go for someone or something needing it, or when I know a friend has a debt with me, but I just let go, I have a feeling that this good I’m doing (if I can call it so) will return to me somehow. As I said, I don’t know how it happens, but I feel like I get happiness in exchange. Just wanted to share this. Thanks for the life hints, David!

David Cain January 20, 2014 at 9:16 am

Yes, I have noticed this too and heard others talk about it. Generosity seems to come back for some reason.

Josh January 20, 2014 at 4:48 am

Great post. Some of the best things in life are free: sleeping in, going for a walk/jog, sitting in the park or meditating.

Kudos to using the library card. I once used my library card to get a textbook for my chemistry class last semester through a library loan. Usually loans are 2 weeks but I called up the branch and explained my situation and they gave me another month. When that ended I found another copy of the book through my campus library and wound up with a rental for the whole semester! It was a little bit of work, but much more enjoyable than the 8-5 to be able to pay for the $80 book :)

David Cain January 20, 2014 at 9:17 am

Don’t get me started on textbooks….


John January 20, 2014 at 6:57 am

A fresh perspective on the classic dilemma of saving vs. spending. I dig the building bricks analogy. I often find it a struggle with the booze budget as well. It’s not as if I drink every day, rather it seems that the default is drinking every weekend with friends. I suppose you have both kinds of friends-the non drinking type and the drinkers? It’s definitely a challenge to find the crowd that doesn’t want to drink every weekend, being at my age of two years removed from college. I like to drink and think the hilarity that can ensue makes it worth it in some cases, but I’m realizing more and more that being overly drunk every weekend is costly in both a monetary and health sense.

David Cain January 20, 2014 at 9:19 am

This is an issue. I have gravitated away from certain people and certain kinds of social evens as I’ve gravitated away from drinking. It’s not because they’re bad influences, it’s because I don’t want to drink and I don’t want to be around drunk people if I’m not one of them. Alcohol is extremely pervasive in our culture and you do have to make changes socially in order to make a major adjustment in how you use it.

Josh January 20, 2014 at 7:00 am

Very well said! I had a similar money-mindset switch about a year ago, when I was introduced to Mr. MM. (Well, to the MMM website. Not the man himself.) Your analogy of fuel vs. building materials is a great illustration of the switch.

David Cain January 20, 2014 at 9:38 am

Thanks Josh

Lisis January 20, 2014 at 7:05 am

Hmm… on the one hand, I completely agree. MMM changed my view of the world of money as well, and I’ve been living this same way since I discovered him (through you). On the other hand… it’s a bit of a scarcity mindset applied to a concept that isn’t even a real thing. I mean, there pretty much is an unlimited supply of it “out there” if one is willing to go after it (the sort of stuff Ramit Sethi blogs about).

I guess it comes down to priorities… if you value the lattes and fancy travel and high bar tabs and luxurious clothes, you’re probably more willing to trade time/ energy/ effort/ stress to increase your available stash on a regular basis. If you can do without all that stuff (like me), then it’s a bigger sacrifice to go out there and generate cash flow.

Ironically, I discovered Ramit through MMM, and their diametrically opposed messages have been dancing in my head ever since!

David Cain January 20, 2014 at 9:28 am

Yes, and I should clarify that I am not against the idea of earning more money.

But cutting expenses is far more effective, and there are several reasons:

1) You increase the proportional difference between your income and your spending much more quickly when you reduce spending than when you increase income.

2) You learn how to achieve well-being independently of whether you get the material thing you currently want or not. If your answer to craving is to find a way to get the thing you want, your happiness becomes increasingly dependent on material things, and I think this is only going to make you worse at being happy.

3) You become much less susceptible to hits to your income, by being fired or changes in the market, because you know that you can be happy with very little money.

4) Making more money, for most people, almost always involves spending more of your life doing things you don’t particularly like doing. If you’re doing this just so you can have cooler toys to play with in your shorter evenings and weekends, I would say that’s a mistake.

Theoretically there is an unlimited supply of money out there for the person driven to get it, but the more needful you are of it, the less it can do for you, if you know what I’m saying.

Lisis January 20, 2014 at 12:58 pm

I totally do. I’m definitely on the MMM side of this argument… and feeling better about it because of your response. :)

Aditya Thakur January 20, 2014 at 7:21 am

I like to call money “value representation documents” (VRDs). They represent the value you’ve created for the world and in return you can buy value from the world. So when I feel like buying something on an impulse in a shopping mall, I just try to evaluate if that object will give me the kind of value I gave the world in earning that much VRDs. It helps.

David Cain January 20, 2014 at 9:29 am

I like that concept. Thinking in terms of value (with money as a proxy) helped me realize that I could give more value to the world by doing other things.

Wan January 20, 2014 at 7:23 am

Nice insight on money.

I still can’t take a stand on the value of money in my life – sometimes I think it’s crucial but sometimes I think it’s some superficial baggage.

David Cain January 20, 2014 at 9:30 am

I see it as a very versatile tool, but the more you use it the less it is able to do. Like a swiss army knife that loses attachments every time you open it up.

elizabeth January 20, 2014 at 8:10 am

probably the point of that article was not for me to impulsively and immediately buy qwirkle cubes … but i did anyway …. i love the original qwirkle … my family is a game playing sort …. and now i have a valentine’s gift for them …. money well spent, i’d say. thanks.

David Cain January 20, 2014 at 8:25 am

Ah you will not regret it! It was one of my best purchases of 2013. The little cubes are beautiful :)

Toni McLellan January 20, 2014 at 8:25 am

This hit me at such a perfect time. My husband and I have been going on ‘date nights’ to a local pub and eating and drinking stuff that left us feeling gross afterwards. I told him that I knew what we really wanted was to the experience of getting out of the house and just spending time bonding, and had even suggested hitting a local coffee shop to play games instead.

“Fuel or bricks” is a good question to ask from here on out, along with “what feeling am I trying to evoke?”

David Cain January 20, 2014 at 9:32 am

One of my biggest discoveries this year is that there’s so much to do that’s free. I used to think fun is something that had to be paid for, and it’s not true at all.

Travis Keenan January 20, 2014 at 8:33 am

F*ck that was a perfect message for me to discover in my inbox this morning. I almost never comment, but thank you for the contribution your writing makes to my life. :-)

David Cain January 20, 2014 at 9:12 am

Thanks for saying so Travis. I hope it helps puts more money in your wallet in 2014.

Nick Hilden January 20, 2014 at 8:46 am

Great post. Money has always been a tricky one for me, but I think one of the most amazing realizations was that making my own food out of quality ingredients is not only cheaper but less time consuming–not to mention healthier. I’ve been living in Spain for the past year where fruit, vegetables, and other whole foods are fantastically cheaper than in the US–to which I return in a week–and I am not looking forward to the dramatic price hike. I have spent a bit of time in Canada, but not enough to know the food prices. Is it similar to the US where processed, pre-made food is relatively cheap while real food is more costly? Beef and chicken aside (they’re pretty cheap in the US).

David Cain January 20, 2014 at 9:11 am

Yes, quality ingredients are a much better deal than restaurant food! And I’m still reconditioning myself to this fact. When I’m in the health food store I’m always cringing at the prices of quality ingredients, yet I drop more money at a restaurant for a single meal.

Food is more expensive here, although there is a smaller gap between the cost of junk food and the cost of real food. I find produce is about the same in Canada and the US, and processed food is significantly cheaper. I’m always astonished about how cheaply you could live on bad food in the US.

Kenneth January 20, 2014 at 9:07 am

Great post. I love the concept of every purchase being a permanent trade, where you have now and forever after lost the money you just spent. Mindless, habitual purchases just may not be worth it. They may not return greater levels of happiness than the value of the dollars spent. For me, such mindless, habit pattern purchases have included:
3-4 trips to Vegas per year
Cell phone plans with many GB of data
New cars
Eating out at work
Eating out after work too much
Alcohol to excess
Spending too much on Christmas presents
Although MMM came too late for me to retire early, I’m now 710 days away from a good retirement. My savings rate is now around 65-70% depending on how you figure it. I’ve cut out most of the above. Spend $10/mo on my Airvoice cell plan. Have a $100/mo dining budget. I don’t drink any more. I don’t go to Vegas any more or gamble in any way. The funny thing is, I am definitely HAPPIER without all this stuff. That high energy stream flowing through you into spend spend spend can burn you out just like your Rock Star analogy. Now most of that high energy stream of money is being pooled into savings and investments. That makes me happy!

David Cain January 20, 2014 at 9:35 am

Congratulations on your retirement progress!

It is amazing how much happier you get when you create that space between income and expenses. As soon as I had an emergency fund my stress level cut in half. Money is doing the most for us when it’s NOT being spent.

gael blanchemain January 20, 2014 at 9:21 am

No matter how I sugar coat it, saving still feels like a restriction. Yet, I’d rather trade careless fun for serenity: it’s a winning deal especially if your main objective is freedom.
Thanks for Sharing the details of your life strategy, it sure inspires mine :)

David Cain January 20, 2014 at 9:38 am

It used to feel like that for me too.

It helps to realize that NOT saving is much more restrictive. It keeps you highly bound to your job, and that fear is so pervasive it can be hard to feel until it’s gone. Just having an emergency fund gave me an enormous feeling of freedom. I didn’t have to be so worried all the time. Definitely check out mrmoneymustache.com. It changed my life.

gael blanchemain January 20, 2014 at 1:40 pm

OK, it’s true that the servitude of having a 9 to 5 (or worse) is clearly not what I want any longer, that’s already an incentive to saving more.
I’ll subscribe to mrmoneymustache.com and will see where it’s taking me.
I’m also looking into bitcoins farming these days (prudently, though).

Thanks for helping

greg January 25, 2014 at 4:20 pm

Because of the algorithmic setup relative to the power of hardware these days, bitcoins mining looks to many as becoming not very worthwhile. It may be legit to use them as just another way to diversify and as an inflation hedge since a finite quantity of them is cryptographically guaranteed.

I came to this blog via MMM and there via Fisker’s blog (early retirement extreme) – while I have found both to be more extreme than what makes me happy, exploring such things has led me to similar conclusions as David here.

Enjoy your journey!

dan January 20, 2014 at 9:43 am

Did you read “For the Love of Money”, an opinion piece in the Times just the other day? It’s a pretty shocking and enlightening tale about a former hedge-fund trader, and what he considers his “money addiction”. It’s interesting because most people have never considered that money can be seen in that way, as always-wanting-more seems to be ingrained in our society without much reflection.


Thanks for your thoughts, I feel like yours are a natural corollary to Sam Polk’s.

David Cain January 20, 2014 at 1:32 pm

Ah, I saw that this morning and have it bookmarked to read this evening. Thanks Dan.

greg January 25, 2014 at 4:23 pm

I read that one after a friend posted it. I feel the addiction aspect speaks a lot to me since I’m paranoid about considering myself “secure” at any point, but I also feel that the categorical rejection of finance as pointless or worthless doesn’t sit well with me. There was recently a good TED talk posted that described creating financial instruments to use the profit motive to increase the development of breakthrough medications, and just imagine where we’d be without innovators getting access to capital!

Danny C January 20, 2014 at 9:45 am

Very well written. From the perspective of an older person (65), when you think of good times you’ve had, it is never how good/or not a particular dinner was or what occasion you had the best latte ever. The fun memories that feed your soul are times spent with good people and they always seem to be things that were done on the cheap at someones house or some free venue sans alot of spending. This article articulates how me and my wife feel and function very consciously all the time. The preference for our own homemade entertainment rather than paying and possibly receiving something sub par is truly exercising this wonderful choice of conscious living.

Cherry Odelberg January 20, 2014 at 9:45 am

Yes! What refreshing advice and encouragement!
Now, about the taxes…

Glynis Jolly January 20, 2014 at 10:24 am

Of course, I’m beyond your generation and that, I’m sure, has a bearing on my opinion of how money is spent these days, let alone how people spend their time. Your post has given me hope for the future. Knowing that there are some people of the ‘younger generations’ striving to get more out of life by putting more personal effort into it has boosted my moral.

nrhatch January 20, 2014 at 10:33 am
Pandionna January 23, 2014 at 12:48 pm

That looks interesting. I will have to check it out. Thanks for posting the trailer!

mona January 20, 2014 at 10:37 am

this article is wonderful and i think changing mindset in this way helps me a lot to conquer my mindless money spending habit.
thank you

Matt January 20, 2014 at 11:19 am

Great post, David. I jotted down some similar thoughts yesterday: http://matt-he-wanders-on.com/stop-being-lazy-and-retire-already/

Your blog has been the instigator in a journey of self reflection, and I thank you for that!

Chris January 20, 2014 at 12:06 pm

>I rarely buy books, because I already own so many unread ones, and because the greatest bargain in the history of the world is the library card.<
As a librarian I'd like to thank you from the bottom of my heart for this sentence. :)

I have just recently discovered your blog, and am finding it very worthwhile and thought-provoking. Thank you for sharing your ideas and personal journey so publicly!

Fiona January 20, 2014 at 2:29 pm

I really enjoyed this article!! I always read but never comment.

This is so appropriate for me right now!!

Edith January 20, 2014 at 3:46 pm

I also feel MMM has changed my life forever and I found it thanks to this blog. I no longer feel a victim of the system.

Matt January 22, 2014 at 8:44 am

I’m in the same situation, Edith! So thankful for Raptitude and MMM!

Ben January 20, 2014 at 11:07 pm

$1,200/mo including rent and everything else? Where do you guys live/what’s the housing situation like?

David Cain January 21, 2014 at 1:15 pm

She lives with a roommate in a large two-bedroom, and her portion is less than $400/month. Utilities are split too. Her neighborhood is older but safe and within walking distance of downtown and other interesting parts of the city. She doesn’t waste anything, buys clothes used and doesn’t buy anything she doesn’t need. We go to restaurants sometimes but we wouldn’t buy drinks there, for example. Generally we both avoid paying for entertainment, because there’s so much to do that’s free. But there are exceptions to everything.

I had an extravagant month last month (because of holiday festivities), I live in a rather expensive apartment for what I need, and I still came in at about $2000. I’m going to move to a more reasonable place when the lease is up in April, and reduce things further. I’ll probably raise my living expenses a bit once my take-home income is double what I spend now, but for the time being I still feel like I’m living like a king.

Kabamba January 21, 2014 at 12:35 am

In my guitar journey, I found that the free online resources were enough to get me to the place I wanted to be in my playing. But that was only after I purchased a few online courses, just to realize that I was not really missing out on anything.

David Cain January 21, 2014 at 1:17 pm

The internet is amazing. When it comes to music there is so much out there. What kind of stuff are you playing these days?

Caroline January 21, 2014 at 2:19 am

Where I live, they joke that people are so mean, they hang the toilet paper out to dry, so it can be used again. This could be meaness or it could be economy so where do you draw the line?

David Cain January 21, 2014 at 1:19 pm

I’m not sure what you mean. Can you elaborate?

@freepursue January 21, 2014 at 8:37 am

What a great post! That is exactly how I feel and mostly how I live. Your writing on this topic (and many others) is right on pointe. For the last 5 years, I have been moving towards this state of being, not realizing how many individuals online were going through the same evolution. Amazing how what we need most in life, what is most fulfilling, is either free or has little associated costs. I am happier and more productive now than ever before, despite taking a $100K hit in salary at 38 years of age.

Thank you for your unique take on a shared experience.

BTW: High five on the library card. I would not be able to consume books as I do without it!

David Cain January 21, 2014 at 1:22 pm

>Amazing how what we need most in life, what is most fulfilling, is either free or has little associated costs.

Yes. I can’t believe it took me so long to learn this. If you ask people with a lot of life experience what the most enjoyable parts of life are for them, it’s always simple and inexpensive things like visiting friends, simple hobbies and going for walks.

rjack January 21, 2014 at 8:46 am

David – Beautifully written article.

I’m also a big fan of ERE and MMM. In fact, they helped me retire early at 52!

I find as I get older that stuff matters a lot less to me than great experiences. Eating out with my sons can be a great experience because I don’t get to see my sons as often as I like to. My wife and I have scheduled an expensive European River Cruise for this summer as part of our 30th wedding anniversary celebration. On the other hand, I sold my car and we are now a one car family because the car mostly sat in the driveway.

Jacki Maynard January 21, 2014 at 9:17 am

Great post. My relationship with money is in need of a serious overhaul. I think a lot of it has to do with surrounding yourself with similarly minded people. Right now, my friends are SPENDERS, they spend money on drinks, clothes, dinners, everything. Breaking into a new community of savers I think will be the only way to really solidify the ideas you laid out here. Incredibly impressive that your girlfriend only spends $1200/month. That kind of spending would solve ALL my problems.

David Cain January 22, 2014 at 8:53 am

The first thing you notice when you make this change is that nobody else is going to change with you. You can absolutely do it without changing the crowd you run with, but you may notice you prefer different activities, which might have a side-effect of changing who you hang out with. Whatever you do, don’t wait for others to take the lead.

Edward January 21, 2014 at 12:44 pm

Amazing how many people here saying MMM’s site changed their life. I’m adding another to the list. I found it in early 2012 and fireworks went off in my head as I poured through the articles. I’d always been a minimalist but never thought to do it like *that* before. I save 60%+ of my income now and I’ve honestly never been happier with my life! (Err… Except when I was a little kid, before elementary school.) It’s not even about the money anymore–my mind and lifestyle just all feel so much cleaner somehow. I’ll be eating a delicious homemade dinner, watching a good movie on my big flat screen clown TV (bought 6 years ago) and happily think to myself, “Man, I live like a goddamn king!! Life is grand, indeed!”

A thought occurred to me when I woke up this morning–you can so easily make a life change. …And if you don’t like it, you can change back. People who yell, “I want my $5 daily coffee! To hell with saving!” Don’t seem to understand that they can *try* not having it and if that doesn’t agree with them, they can have it back again. You can *try* a low-flow showerhead and if you don’t like it, put the old one back on. Try not going to restaurants for a few weeks, and if it doesn’t suit you start up again. There’s no need to argue back-and-forths about it. Some changes will stick and some won’t. Fearing a change (where no loss can come of it) so much that you wouldn’t even attempt it is ridiculous.

Fantastic post, David!

Alex February 5, 2014 at 6:02 pm

Edward… you just blew my mind with being able to take back life changes. Why have I never pictured it that way before?!

Raging Ranter May 24, 2014 at 9:42 pm

Ive been trying to convince my wife to give up the cable. Maybe i need to present it to her this way. At least try to go without it. If she hates it, we can get it back again.

Georgina January 21, 2014 at 2:28 pm

Thank you for all the wonderfully inspirational articles you have sent to me. Have a great 2014.

David Cain January 22, 2014 at 8:48 am

Thank you for coming Georgina

Stephen January 21, 2014 at 7:43 pm

This is like a well written, non boring version of fundamental economic theory. I’m currently in academia and studied economics/personal finance in grad school and this is truly the essence of economics.

In economics the term that is used is marginal utility. And the goal is an equilibrium where each dollar provides the most utility per dollar spent. Many economist spend years tweaking the mathematical equation yet fail to implement its basic concepts in their own life. I’ve taken 14+ economics classes and this article boils it down in an easily digestible way. I might make some of my students read it. Great stuff, thanks for posting.

David Cain January 22, 2014 at 8:47 am

Hi Stephen. Oh good! It only took me 33 years to come up with this particular theory. I think non-boring is an underrated quality in educational material.

Chris January 22, 2014 at 8:21 am

“My strategy was to find a source of fuel that supplied me faster than I would be burning it once I was living like I wanted to.”

This sounds like the US government! :) Can’t believe we base our economy on GROWTH only. Having a surplus isn’t enough, we need to continually grow. Ridiculous.

I’ve been trying to line my lifestyle up with this mindset by doing some of the same things you did (budget wise especially, YNAB has been a lifesaver for my wife and I). Spend $50 on a board game which you can have fun playing night after night on top of the social fun too? Or go out to eat for well more than that and be done with the cash….

David Cain January 22, 2014 at 8:34 am

It’s hard to believe how unsophisticated our nations’ economic philosophies are. The only approach is “We need more money that last time!”

Jan January 22, 2014 at 7:23 pm


I just found MMM and today I found this blog. How wonderful. I love the idea of thinking of money as a stream and if it gets to its destination, it becomes a pool that can become deeper and wider in time.

As an older person, I just wanted to add, most of the “things” that I bought are now things that I am either throwing away (or should throw away) or donating. I can only imagine how much more traveling I could do if I just hadn’t bought that extra “thing” and how much more the memories of the trips would mean to me now.

Luckily I have never been a spender so it could have been a lot worse.

Thanks to all for their contributions to this blog.

AJMiles January 22, 2014 at 11:00 pm

“the greatest bargain in the history of the world is the library card”


This guy gets it.

Tal January 23, 2014 at 1:55 am

Thanks for sharing.I will add ,that if you live in a place that enable you to grow the food that you like,and live less isolated ,but rather share/play/eat just do more , with your family and neighbors. You will cut some more of your cost of living.And be happier .I live in a community, that makes me happy.By the end of the day one need to prioritize.
watch the movie ,The queen of Versailles.Thanks for the free food for thought.

Carolyn January 23, 2014 at 12:52 pm

I really enjoyed this article (and will be passing it along to friends of mine who need to read it) – and I look forward to the days when I can apply it more fully to my own life.

I have a hard time with that at the moment – I tend to have short bursts of gainful employment (and most of those are for minimum wage or less) – due to ‘seasonal’ work being the only thing available. I can, and do, save during the time that I am employed, but when I am unemployed my savings disappear to pay for my necessary bills (car insurance, student loans – sincerely nothing frivolous).

That being said – when I DO have income? I don’t save as much as I should, because I know that I’ll be unemployed soon and I like to have a few moments of not feeling completely shit about my lack of income – so I spend some, on some frivolous things.


Niz January 23, 2014 at 11:57 pm

Love this.

Niz January 24, 2014 at 12:02 am

Your blogs are always appreciated.

Tracy January 24, 2014 at 9:41 am

I loved this and forwarded it on to my husband. The next evening he used it to give a “budget talk” to his 21 year old daughter. She has been working 3 jobs since December, but spends most of what she makes at the mall or eating/drinking out. We think you’re a genius…

Chantal January 24, 2014 at 4:06 pm

Hi David,

This is such a great post, and comes at such a good time for me. My relationship with money has changed quite a bit in the last year or so, and I am continuing to pursue a simpler life that allows me to spend my money on the things that really ARE important to me, like travel. One thing I still need to wrap my head around is that sometimes it’s ok to spend money on things that are really healthy for me. I sometimes balk as spending $100 for a month-long yoga pass (which is truly a great deal), or on ‘expensive’ health foods at the local grocers, but then, as you said, will go out to eat a couple of times a week and spend almost that without really thinking about it much. It’s definitely a mental thing that I need to get past!

Oh, and I am also a huge fan of library cards, have had three over here in Australia. It’s a great place to learn, relax, and get out of the heat for a bit for free! :)

Anthony January 24, 2014 at 7:02 pm

Most people’s house is full of things and material possessions that we never use, we could spend our money more wisely, every bodies dream is the financial independence and having enough money to buy what they want and do the things they enjoy.

Diogo January 25, 2014 at 5:16 pm

Another great post David!

I totally agree with you. Quite often we get into spending habits that add no value to our well being or happiness ( trading valuable time/money, for worthless experiences).

By bringing consciousness to our spending we can make smarter choices as you so brightly described in your post. Money can give us freedom (choices, places, experiences…), but can also chain us like nothing else.

I guess a self evaluation is crucial here. Before changing spending habits a close examination on what makes us happy and what are we trading our money for is highly valuable. I’ve noticed that things that give me the most pleasure cost very little and that my most precious asset is my free time.

But it is simply amazing how easily I get dragged into spending money on things that I don’t even agree, either because of wife and kids “needs” or social events that I end up joining because I want to be around this or that friend, or to get a temporary flimsy satisfaction…

No doubt a work in progress – of very important nature.

Anon February 4, 2014 at 9:15 pm

Wow, your blog post has hit me in the face like a pile of bricks. I work in a high-pressure industry and make an excessive income but I’m also hiding a massive and unsustainable drug habit that I’ve spent years fighting. Even though I know there are mental and physical health issues that underlie my condition, I also accept that I have choice, every time I score and use, it is a choice. Every time I take on a new, higher-paying contract to service this lifestyle, it is my choice.

Besides from substance abuse, you can imagine my spending habits are pretty awful. I have spent so long living like this that I cannot imagine how to live more frugally again, even though I know that I once did and I was as happy, if not more.

I have spent more time than I care to think about fueling my own physical and spiritual destruction and like many in my position, there is a great deal of guilt attached to those memories, of all the things I could have done with the money I wasted. Two days ago, I visited my father’s grave, it was the five-year anniversary of his passing. I’m living the life that he lived, perhaps even a little worse because I make more money than he could ever imagine.

I want desperately to believe that my life will not turn out the same and that when I die, I won’t leave behind a mountain of debts to my loved ones and a legacy of wasteful, excessive and ultimately self-destructive behavior when I could have been building a life of contentment and peace.

David Cain February 6, 2014 at 2:11 pm

I don’t know much about your situation, but it can’t turn out the same unless you continue the same behaviors every day. Since you recognize it now, I think you are already in less danger of continuing. You can’t do much about the money you’ve wasted, but with a high income you have a fantastic chance to do a lot of building in a short time. You have the raw materials to create a very stable life. The substance habit is obviously a very big leak in the canoe, and the first thing to address.

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