One of the easiest personal finance tips out there is to simply stop wanting more stuff. It’s simple, but it’s true–if you had an easy way to basically eliminate your desire to acquire anything new aside from things to cover your barest needs, personal finance would become incredibly easy. Sadly, humans don’t work that way.




This post originally appeared on The Simple Dollar.

Our desires run amok for a lot of reasons. We want things for personal enjoyment. We want them because they’ll fill an emotional hole in our life. We want them to impress others or to keep up with the Joneses. We want to feel rewarded for the hard work we put into our lives.


All of those things–and many more–wind up being justifications for the non-necessities that we spend our money on.

I’m guilty of the same thing myself. I can name tons of things that I want, for various reasons. There are a couple of long-out-of-print board games that I’d love to have (if you happen to have a copy of 1862, let me know), for example. I’d love to have some more Baron Fig Vanguard dot grid notebooks–they’re wonderful for taking notes, but they’re more expensive than I can really justify. I’m going to want an electric car as soon as they’re really viable and approach anything close to cost-effective.

There are non-material things that I want, too. I want to get this mostly-finished novel that stares at me from my desktop screen completed, edited, and published. I want to actually launch a different project that I’ve been working on for most of a year. I want to be in better physical shape (I’m working on that). I want to be better read. I want my office to be better organized.

I could throw either money or time–or in some cases, both–at any of these things and transform that “want” into a reality.


But here’s the problem: everything has an opportunity cost.

When you spend money on something, you’re taking away every other thing you could have done with that money.


When you spend time on something, you’re taking away every other thing you could have done with that time.

The reality of life is that you can have some things, but you can’t have everything. Whenever you have something, that means you’re choosing not to have something else. I could have all of the material items I listed above, but I’d quickly wreck all of our plans for the future. I could take care of all of the projects I listed above, but I’d have to eat into time that I spend on other things, like spending time with my children.


The truth is this: I want to spend every dollar and every moment of my life on the most valuable thing that I can spend it on. I think that’s a goal that most of us share. (It’s also a call to frugality, but that’s neither here nor there.)

My solution to all of this is simple: whenever I want something, I try not to think about how much I want that thing and how great it is; instead, I think of what I’ll have to give up to have it.


Here’s specifically how I do that.

I think of how many hours I’ll have to work to buy this item, and what those hours might represent. I do this by first calculating my true hourly wage–the amount of money I have in my pocket per hour of my life devoted to work. Let’s say it’s $10 an hour for convenience sake.


If I’m at a coffee shop and I’m considering a latte and a bagel, the total might be $7.50. That means I have to give up 45 minutes of my life to work tasks to earn that coffee and a bagel. Is that really worth 45 minutes of my life, especially when I could get virtually the same thing at home for less?

Let’s say there’s a new board game I want (if you’re new here, tabletop board games are one of my main hobbies) and it costs, say, $50. Is it really worth five hours of my life lost to own this game, particularly if I have a similar game or if someone else that I regularly play games with also owns this game?


I try to think of the other things I might do with that time. I look at eight hours of value as being equivalent to retiring a day earlier or an extra day off of work doing something fun. Is that $80 item going to bring me more joy than a full day off of work doing whatever I want?

Similarly, 2,000 hours of silly purchases (at $10 per hour) is basically equivalent to an entire year where I don’t have to work and instead I can live off of the money I saved from those purchases.


Figure out your own true hourly wage and use that as a comparison point for purchases. If you’re on a retirement budget, figure that you’re “working” 40 hours per week for that money.

I think of the other things I could have with that same amount of money. I’m standing in line for that $7.50 bagel and coffee at the coffee shop when I realize I could have the same bagel and roughly the same coffee for about $2 at home, leaving me an extra $5.50. I could put that towards a portion of something else I want instead, or I could bank it to move half an hour closer to early retirement (using my true hourly wage).


When I buy this bagel and coffee for $7.50, I’m giving up those things. I’m basically willing to give up some progress toward retiring early just to have this coffee at the coffee shop instead of at home. I’m willing to give up a portion of the cost of that book that I want (probably about half of the cost) or that board game that I want (probably about an eighth of the cost).

Is that bagel and coffee here worth it to me?

This idea is called “opportunity cost,” and I use it all the time to show myself that I’m not spending money in an optimal way in terms of what I want out of life.


All you have to do to use it yourself is think of other things you might do with the money you’re about to spend on that non-essential purchase. Is it really worthwhile? Is it worthwhile to spend $7 on the name brand version of a product when you could spend $5 on the store brand and have $2 in your pocket for other things? Keep making those comparisons until it seems natural and eventually you’ll find yourself naturally guided to the most worthwhile purchases and away from the less worthwhile ones.

When I’m trying to justify spending time on a project, I think of the least effective uses of my time right now. I think of the most useless websites I’ve visited in the last week, for example. I think of the time I spent leafing through a magazine and not really reading anything of value. I think of the time I spent sitting in the car staring off into space listening to a radio program that I actually can’t remember in any detail.


I waste a lot of time in my life. I also use time in less-than-worthwhile ways. When I think about spending time on a new project, I try to think of the less-worthwhile things I do with my time and I ask myself whether I’m okay with eliminating that time to support this new project.

If I don’t have the time, I don’t even start. If I do have the time, I make sure to de-commit from those other things first.


This might seem like a bit of a negative approach, but the truth is that if you don’t commit serious time to a serious project, it’s going to fail. You’re not going to achieve it and whatever time you do commit is going to go to waste. If you can’t give up the time to make a project work, don’t bother. Focus instead at succeeding at your other priorities.

Something has to be worth what you’re giving up for it or else it’s not worthwhile. When you spend money, you’re giving up something else you could buy; when you spend time and focus and energy, you’re giving up something else you could be doing. If you’re giving up something that actually has more value to you, then it’s simply not a good trade.


It seems obvious, but it’s something that people overlook all the time as they’re overcommitting to projects and overspending. They’re making trades where they’re giving their money and time and energy to things they feel like they want in that moment, but if they step back, they realize later that it’s a pretty bad trade.

Think about what you’re giving up before you give up your money or your time or your energy. Make sure you’re getting the better end of the deal compared to what else you could do with that money.


Good luck!

Don’t Think About What You Want. Think About What It Would Take to Get It. | The Simple Dollar


Trent Hamm is a personal finance writer at TheSimpleDollar.com . After pulling himself out of his own financial crisis, he founded the site in late 2006 to help others through financially difficult situations; today the site has become a finance, insurance, and retirement resource. Contact Trent at trent AT the simple dollar DOT com; please send site inquiries to inquiries AT the simple dollar DOT com.

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