J.D. Moyer

beat maker, sci-fi writer, self-experimenter

Don’t Waste Money

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Burning money — not always a waste?

Recently something clicked for me, a reconciliation of the personal finance philosophies of Mr. Money Mustache and Ramit Sethi, two “rich life” bloggers I follow. The former retired in his thirties via ultra-aggressive savings and a serious no-frills lifestyle (drying clothes on the line, buying cheap staple foods in bulk, bicycle as main mode of transportation, etc.). Ramit, on the other hand, loves to ridicule budgeting (few really do it) and advises his readers that they are better off putting their attention and energy into earning more money (via starting online businesses, freelance work, side jobs, and/or negotiating higher salaries). Superficially it would seem that these two approaches are diametrically opposed, but a unifying principle revealed itself to me after a recent transportation experience. Don’t waste money. I’ll get into what that means (at least what it means to me) a little later.

Generally I have sided with Ramit’s earn more approach, and it was after reading one of his articles that I most recently raised my consulting rates. It turned out to be a good move — none of my clients complained, I didn’t lose any business, and I was able to provide some financial support to an in-law without having to work more or spend less. Reading Ramit’s blog tends to reinforce my belief in the financial systems I already live by: find a way to earn a high income without giving up all of your time and freedom, live well within your means, automate your savings, invest intelligently, and generally make rational financial decisions (for example it’s not always a good idea to buy a house instead of renting; it depends on a number of factors).

But lately I’ve been attracted to the more extreme, anti-consumeristic approach of Mr. Money Mustache. In February of this year we started a one-month long experiment of not owning or leasing a car; we’re now into our seventh month, with an average savings of $150/month. I’ve also been deferring many larger purchases, which has the paradoxical effect of increasing the pleasure and excitement related to each purchase because of the longer anticipatory phase (and often better technical specifications, due to Moore’s Law). In addition, we recently signed up for PG&E’s SmartRate plan, which gives you a 20% discount on electricity rates June through September, except for specific 4x price surge days (we receive alerts on those days and reduce our 2-7pm electricity usage, and overall save money).

I like Mr. Money Mustache’s approach because it takes conservation and sustainability into consideration — save money and retire early and also have a lighter environmental impact. But I lose interest when he starts writing about drying your clothes on the line, buying dried grains and beans in bulk, doing your own plumbing and electric work, and so forth. I’m an urban electronic music producer/writer/programmer, not some rugged DIY jack-of-all-trades homesteader. No disrespect to the latter type, but I like my fine wine, fancy cheese, analog synthesizers, Fluevogs, artisanal chocolate, and HBO Now. And I can afford these things and still meet my savings and charitable giving goals.

The don’t waste money realization hit me when I ran up a big bill last month on CityCarShare. I used the service out of habit, but not efficiently. For example, I used CityCarShare several times for client visits, paying the hourly rate the whole time the car was parked on-site. It would have been just as convenient and much less expensive to take a Lyft or Uber each way (especially now that you can schedule your ride on Lyft — no waiting around for your ride).

To me, not wasting money means choosing the significantly less expensive option that provides the same or better value. It takes some thought and reflection to evaluate value, which is subjective. Even when comparing technical specifications, value is still subjective (a larger laptop screen might not offer more value to everyone — especially if it makes your computer heavier).

Is this so obvious that I shouldn’t even be writing about it? Most people already carefully consider value vs. price when making big purchases. The tricky part is the inertia of regular monthly expenses. It takes effort to even think about these line items, and there is often a time/stress/convenience cost to making a change (for example moving, changing ISP’s, etc.). Measuring the value of a product or service isn’t trivial either — ultimately it depends on your own core values. Deciding which internet service provider to use might ultimately require deep introspection and soul-searching. How much is good customer service worth to you? (If it’s worth anything, don’t choose Comcast).

The feeling of wasting money is different for different people, but nobody likes it. Donald Trump considers paying contractors to be a waste of money. In his mind, working for Donald Trump should be payment enough. When I hire contractors, I enjoy paying them, and it doesn’t feel like a waste, because I value fairness and my reputation as an employer. If I was trying to build a reputation as a ruthless tyrant, I’d behave differently.

Money Values and Relationships

Since I’m married, I don’t make my financial decisions in a vacuum. Kia and I have separate accounts for personal stuff (clothes, gear, gifts, etc.) but that still leaves a lot of decisions about how we spend and save money from our joint accounts. Mostly we agree, but when we don’t, we try not to dig in. I would probably spend less money on groceries if I did all the shopping, but it was Kia who pushed to give up the car, and that’s saved us quite a bit so far.

If you feel like your partner is wasting money, but they feel like they’re getting good value, you can move that particular expense into separate accounts. Ideally, every person should have some pool of money from which they can make purchases that seem ridiculous or wasteful to their partner, but reasonable and prudent to them. It’s a little more complicated to maintain both joint and separate accounts, but it’s worth the effort for this reason alone. (If one person is the primary breadwinner and the other person does more domestic work, come to an agreement re: what a fair allocation for personal spending is, and then don’t question those expenses).

Some joint expenses are hard to untangle, and might require creative thinking. If the wife of Mr. Money Mustache said to him “Honey, you make $400K/year on the blog, can we buy a dryer already?” I would advise him to go with the flow. He could continue to hang his own clothes, joyfully saving nickels and dimes, while his wife happily ran the dryer, free of any resentments. Marital harmony has great value too, so don’t neglect that in your equations.

Some Personal Examples

The feeling of wasting money is entirely subjective, so these examples might not apply to you. But here are some ways that I try to not waste money:

  • Order food and drink conservatively when I go out to eat, especially at expensive restaurants. I like going out to fancy places, but it’s a bummer to run up the bill and then feel uncomfortably full and/or drunk afterwards.
  • Don’t send our kid to expensive summer camp every week of every summer. One summer we ran up a bill on fancy Bay Area summer day camps that was the equivalent of a European vacation. This year we actually did take a European vacation, and discovered that our child was equally “enriched” at the nearby low-cost community arts center for the remainder of the summer.
  • Choose public school. The truth is your child will probably learn just as much and advance just as quickly even at a “bad” public school, as long as they have a reasonably good teacher and you’re reading to them at home. I’ve written about this at length. Of course there are exceptions to this — different kids will thrive in different environments. But for us, private school would be a waste of money.
  • Not owning or leasing a car. Now that I’ve figured out how to summon cars to my house using my phone as a magic wand, there’s no turning back. And I’m enjoying being fitter from biking and walking more.
  • Having a paid off phone. My phone plan allowed me to pay off my phone in installment and then be done paying for it. T-Mobile was the first to offer this, but other providers have jumped on board.

The heart of my realization was that it’s a good thing to think about value subjectively. That’s why don’t waste money is a good guideline. You don’t have to second-guess yourself in regards to bogus “objective” measurements (aka other people’s opinions). You know what wasting money is, for you. So don’t waste it.

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10 Comments

  1. Great post, Thank You. Though I agree with buying good cheese and excellent chocolate- an act that brings me pleasure while supporting smaller companies, I do seek to line dry clothes for the sake of being more environmental. Not only do I reduce electricity and the need to purchase a machine (material that later will be thrown away or recycled), my clothes last a lot longer. In my book The Yoga Lifestyle (http://amzn.to/2aHipyk), I describe the Flexitarian method which in general it includes finding the wise path for each expense. Like you wrote, it depends on your core values. May we all be content with what we have.

    • Thanks for the comment Doron. Agreed re: being content with what you have, though striving/pushing/seeking is equally important for keeping the dopamine flowing and making life interesting.

  2. Sara Thorne

    Interesting post JD. My partner and I are considered by most of our friends and family to be pretty frugal. In fact I know that we manage on around a 5th of the salary of many of them. We both work part time as we value our freedom far more than material things, and we are very fortunate to live in secure social housing with a low rent.

    Our holidays are mostly camping, we brew our own ale, run an old car which isn’t shiny but it’s super reliable, and make do and mend with second hand furniture and clothes. I notice that we might not have all the fancy stuff, but we tend to be far less stressed and generally more appreciative of life.

    I think there is also something really interesting here about the different ways we assign value. I always smile when I read that line drying clothes is a step too far for many Americans. As Brits we grew up with line dried clothes and I wouldn’t have a dryer even if I could afford to run one. There’s probably something only an Englishwoman would understand about the smell and freshness of clothes dried in air and sunshine, and the peaceful, meditative act of pegging and folding outdoors. Our clothes don’t shrink either! On cold winter days, we just hang them on the indoor radiators and get double the use from the heating.

    Its all about discovering our own personal value systems and compromising what feels right to us. I usually read your posts with interest and it’s great to hear that you’re discovering what’s working well for you! 🙂

    • Thanks for comment Sara. Maybe I’ve dismissed line drying too quickly. Certainly we have plenty of sunshine here in Oakland.

      Here’s to living the time-rich good life!

  3. Laff

    I enjoy your posts J.D. and this one is no exception. My spouse and I live quite frugally- for our income bracket. We care nothing for what others acquire (no keeping up with the Joneses), purchase vehicles and even our home with cash, not payments. I buy things mostly on drastic sale- just because I think it’s fun to get more for less. I’ve also reconsidered how much I actually really “need”… in terms of house hold decorations, clothing, and other disposibles. Spouse and I actually find it fun to shop in Goodwill & other thrift places (we definately do not NEED to do this, but look at it as helping them, recycling & getting really discounted stuff). He gets fantastic deals on brand name work shirts – he’s an engineer and keeps a fairly predictable wardrobe of dress shirts & khakis. He also gets his old khaki’s cut down to shorts (all ready broken in, & comfy, and quite inexpensive to get altered). We both like to cook – and rarely eat in restaurants (whoa, that’s crazy exp here!) and drink our booze at home (no D & D for us!).

    So I think we are pretty conservative with funds. All the best to you!

    • It’s great when you and your spouse or partner have the same attitude towards spending and what “living the good life” means. Otherwise it can be a real source of conflict. A friend once gave me some good advice about marriage — “Never argue about sex or money.” Haven’t always followed it 100% but pretty close, and it’s served me well.

  4. Laara

    Thanks I needed that reminder. However, it does become a problem if a person is, …..a hoarder at heart. I’ve saved so many bits of boards, cotton rags, beautiful clothes that almost fit etc…. I do like to move around, so I purchased a very small motorcycle, uses tiny amount of gas, so the big truck stays parked. I have wood heat, pick up used pallets and scrap wood from construction sites, and have 3 egg layers (pets), they eat most of the food scraps, family drops off good food scraps in exchange for the occasional dozen eggs. The kale is up, basil still seems happy- its a very fussy plant….and the chicken waste-dirty straw etc. back on the garden. I have stopped cutting the grass, and the dandelions have lotsa bees. Oh yes a small pottery swimming/drinking pool for the bugs and bees. Having a wonderful time here on Vancouver Island, keep up the good work.

  5. Aaron

    hey J.D, comment isn’t related to this thread in particular but i’ve no idea how to contact you otherwise. i’m wondering how your hair regrowth is doing? any chance of some recent progress photos? I personally have begun deep massaging on my scalp twice a day and it would be great to have some reassurance. Hairloss has plauged my life for about 7 years now and if the technique rob introduced is legit, i will owe you both my life haha!

    • My hair looks pretty much the same as the last set of pictures I posted — I’ve only been doing the massage a few minutes a day so not expecting to see major regrowth at this point. But definitely keeping the hair I already regrew!

  6. I enjoyed this short audio segment from Tim Ferriss:
    http://fourhourworkweek.com/2016/08/22/how-to-waste-money-to-improve-the-quality-of-your-life/

    Opposite title, but same basic ideas: analyze your spending habits, consider what you actually value, spend money in ways that make your life better.

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