I’ve been looking at wasted money recently. Inspired greatly by a fine blog called Mr. Money Mustache.
The general idea is that we as spoiled humans squander a lot, and that if we were only aware of how much we were throwing away we could make absolutely drastic change.
How much can one cut from their spending with little to no net loss of personal happiness?
It turns out the answer is, simply put, a shitload.
We (I) looked at our outgoings, and without really knowing it, we were spending about twice what all of our peers were spending on various categories. Groceries was the biggest offender, but there were many things.
I decided to do something we’d never really done before as a family, not so much out of necessity as out of shock. We (I) put together a monthly budget.
Long story short, almost one month in and we’re saving about a grand per month. The only thing I’ve noticed is that I’m having shorter showers now, everything else is pretty much as it was.
I spent half a day measuring the usage of various household appliances and making sure we knew what drained the most power. Simply knowing that and being aware of it has halved our daily power usage. That saves 3-4 dollars per day.
That’s only a couple of bucks eh!
Turns out that’s $1460 per year, after tax of course. At a modest kiwi income you’re going to pay tax on that sucker at about 30%.
That’s $1895 before tax, and then there is the $100 you’d earn if you invested that money in an index fund, or some other fancy or non-fancy investment platform.
That’s $2000 a year for basically no loss in personal happiness.
In fact, I’m super happy I’ll be pocketing that $2000 per year.
Power is just one part of the household expenses equation, there are many avenues you can investigate to reduce costs for little to no (mostly no) cost to your personal happiness.
Even knocking something like your internet bill down by 10 bucks a month nets you $120 every year, and that sort of “small” saving adds up very quickly.
It’s easy to mistake this approach as one that is simply about “saving money”, but it is absolutely not about saving money.
The goal is to maximize your personal happiness by not wasting money.
That extra power usage brought me no joy what-so-ever. The $2000 holiday I can spend that money on instead will bring me great joy.
If that spend will truly make you happier then you should spend the money.
If you’re buying those daily coffees simply due to habit, or addiction, then that’s a different story!
We just seem to spend our lives wasting what we earn a couple of bucks at a time for no net gain in happiness.
I’m sure we can do better.