Throughout my life, I’ve noticed this phenomenon:
Expenses are like sea monkeys.
Only, instead of growing when exposed to water, they grow when exposed to money.
This strange phenomenon has happened over and over again. My salary would be covering my expenses, and then I might get a little bit of a raise and voila! My expenses would magically grow to meet my new salary. Somehow, even though I was making more money and should have been better off, I didn’t feel any better off. My bank account still got drained down to zero pretty much every month.
I would hazard to guess that this phenomenon stems from the fact that making more money makes you feel a little bit more at ease. And being at ease leads to you opening up your wallet a little more freely.
I realized, as I was making the transition to my new life (you can read that story here, in case you missed it), that I didn’t actually know how much money I really needed to survive. All I really knew was how much I was spending, and those are two very different things.
So I decided to make a spreadsheet. First, I wrote down the stuff that I would categorize as “fixed expenses”: things that I view as non-negotiable items in general, although you can play with the exact cost a little bit. On that list were things like the cost of a place to live, health insurance, my cell phone. I created a total for that list and was surprised to find that it was lower then I expected.
Even after adding in estimates for variable costs, like food and transportation, I was still a little surprised by how relatively low the actual number was.
Because our expenses always seem to grow to meet how much we make, we have a hard time envisioning how much money we really need to survive. Understanding that I could survive on a lot less then I thought eased my heartburn better than Tums ever could.
Looking ahead, though, pure survival isn’t exactly my financial goal. There are things beyond just surviving that are pretty nice to have. Like a cupcake when I want one. Or being able to see a great play. Or simply eating out and not looking first at the prices on the menu all the time.
I know that money can’t buy happiness…but money can buy cupcakes, and those make me insanely happy.
So, what’s the total cost of a life sprinkled with those little happy-making things? The old me would have simply made an assumption about how much money it would take. And that assumption would probably have been some outlandishly big number.
Instead, I’m making a little life equation (with prices attached), that adds up the things that I think contribute to my comfort and joy. I’m making sure the equation only includes variables that I truly car about, not things that society thinks I should care about.
My life equation will look a little something like this:
1 latte per day + 1 (or maybe 3) cupcakes per week + 1 awesome concert per month + ________ (fill in the blank) etc., etc., = the cost of the little things that add happiness to my life.
Yup, I can live without them. And that’s good to know for when I barely have two nickels to rub together. But I also know what I ideally want and how much it really takes to get there.
And that knowledge provides a great vaccine against getting infected by the idea that I need to work some crazy 80 hour a week six-figure salary job just because I think I need the money.
So how much money do you really need? The answer is probably less than you think.
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