An Easy Way to Save Money and Work Less

Would you like to have more money and work less? I”m sure most people would, even despite a few displaying bravado of how much they are driven to work for work’s sake.  The reality, I think, is that much of this work is based on the need to work.

Here’s a simple way to work less: spend less

I think it’s one of those common sense principles that gets lost in the noise of personal finance blogs, books, shows, etc.  If you don’t want to work forever, spend less money. Additionally, keeping your baseline, “steady state” expense level low can really make a big difference over time.

A while ago, I wrote a post on how time is money, where we discussed the topic of how long we actually work in order to buy things. In looking at it, I think that this concept can be revisited and used to consider how much less we would have to work if we don’t buy something.

Let’s take an example of somebody earning a salary of, say, $60,000 a year. If you divide this salary by a standard full-time calendar of 2000 working hours, you’re at $30 per hour. Taking this effective hourly salary calculation, what if this person had the opportunity to take a deluxe vacation that would cost $3,000. Or, he had an alternative of taking a more modest, no frills vacation for $600.  Both would be relaxing, but the expensive one would entail high end hotels, fancy meals, etc. The difference in costs would be $2,400 dollars – or 80 hours of work. 

Thus, the high end vacation would cost an extra 2 weeks of work.  Makes me consider the notion of a vacation – which is supposed to recharge us – actually creating more work!

The concept is not just about vacations, obviously. The idea is that incremental expenses cost incremental work. Want to go out to eat for dinner and drinks? If the person in the example above dropped $35 on that, as opposed to a simple $5 meal at home, it would cost an extra hour of work.  Want to buy a $100 pair of jeans, as opposed to a $40 pair of jeans? That’s an extra 2 hours of work. Clearly, these choices can add up.

With bigger expenses, the impact is greater. Want to buy a house that’s $90,000 more than an alternative, good enough home? Well, you’re going to work away an extra 1.5 years of life at the income levels noted above.

When taken together, our spending decisions contribute to our need to work longer. If we ask ourselves the question of “How much work would I save by choosing the less expensive alternative”, it might help us with our quest to make smart purchasing decisions. It’s a question that’s an easy way to help us save money and work less.

My Questions for You

What do you think of the concept of figuring out how much work could be saved by making cost-conscious purchasing decisions?

Do you ever think about not wanting to need to work forever (as opposed to working because you choose to)?

Comments

    • Squirrelers says

      MB – yes, keep expenses low and keep your need to work low. Of course, working doesn’t have to be abandoned :) Just spend less.

  1. says

    We “lived small” rather than living large! While we were saving for college and the needs of our family we learned to enjoy things that didn’t cost much. Now that we are retired we have more discretionary money. We still live small on the things that don’t matter to us, and have put more money into travel. Some people say we live large, but we just have targeted spending areas. It’s a lifestyle that has brought us early retirement and lots of fun living life!

    • Squirrelers says

      Maggie – seems like you guys have made good decisions! That’s great. I’m sure that at this point, there’s far more positive feelings about your current lifestyle, vs any regrets about not living it up.

  2. says

    We all tend to ‘need’ more the moment our salary increases. And this usually goes in a spiral: we earn more, we want more, until we’re working our socks off for a huge vacation or an expensive car.

    So it’s really a good idea to keep an eye on those expenses, set budgets and stop not being able to ‘live’ without stuff we never actually needed. It’s a long road though and we really need some serious self-discipline for this.

  3. says

    “What do you think of the concept of figuring out how much work could be saved by making cost-conscious purchasing decisions?” I don’t really think in these terms. I suppose I could conceptualize it in the manner that I could retire earlier if I saved more now by not spending. Thus, I would save myself from work near retirement, but that feels so abstract and like such a looooong-term effect that I’m not sure how useful it is in the present at controlling purchase decisions.

    • Squirrelers says

      Well, every little big counts, and every decision matters. I know that might seem in line with being very long-terms, but the less we spend now, the less we might have to work.

  4. says

    We do use this formula, though kind of in the reverse way you are talking about. Most of the time, we say, I earn ~$38/hour. It takes 2 hours to mow our lawn. I can pay someone $40 to mow our lawn. Is it worth my time to do it? (In this case, yes, because I find mowing the lawn to be a zen like experience, so it’s worth more than money to me.)
    But it is a good way to look at a lot of expenses. You just have to remember to account for all the factors.

    • Squirrelers says

      shanendoah – oh, I agree with you. There are times when it isn’t worth our time to do certain things, and outsourcing makes sense.

  5. says

    Squirrel, I think about this all the time, usually when I am forced to pay for something I don’t want to. Ironically, it doesn’t cross my mind when it comes to vacation though. If I did think about it, I would probably never book another trip though.

    Very interesting point. I need to adjust my thinking some I think.

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