It’s pretty clear by now that I have a different relationship with money than when I started Get Rich Slowly. I’m by no means perfect with the stuff, but I’ve become firmly entrenched in the camp that sees money as a tool. (I used to see it only as a means to instant gratification.)
Here’s a tiny example.
Taking a page out of Trent’s book, Kris has been on a crock pot kick lately. This morning she tried a new swiss steak recipe. “Can you do me a favor?” she asked before leaving for work. “Can you make some mashed potatoes to go with dinner?”
“Of course!” I said. I make awesome mashed potatoes.
Well, as the day progressed, I became less enthused about the whole potato mashing process. As you might guess, it had something to do with The Book. Though I finished the manuscript last Friday, that’s not the end of the work. In fact, I’ve been buried in editing ever since.
This morning, I started editing the chapter on housing. I expected it take only four hours. Instead, it took seven. Next I rushed to start editing the chapter on taxes and insurance, but discovered it’s packed with problems that need to be fixed. I turned instead to the chapter on debt. More problems.
“I don’t have time to mash potatoes,” I thought. “I have to edit.”
And though I know this sounds strange, it was then that I had an epiphany. All these months and years, I’ve written about the notion of Money as a Tool, and I’ve sort of understood it intellectually. But it wasn’t until this moment that I actually knew what the concept meant: It meant I was stopping by the supermarket to pick up some mashed potatoes!
Money as a Tool
It’s difficult to describe the relationship I used to have with money. It seemed like the ultimate objective. It was what I wanted. Yet I didn’t do anything to earn or save the stuff. Instead, I’d spend it without thinking. When I spent more than I could afford to buy comics and videogames, I got a little thrill. It felt like I was somehow cheating the system.
I know now that the only one I was cheating was me. It took me years to pay off the debt I racked up by “cheating”. Now I really do see money as a tool. Monetary wealth isn’t the goal. Happiness is the goal. Doing the things that make life meaningful for me — reading, writing, spending time with friends — is the goal. Money is useful because it can help me do these things. Used wisely:
- Money buys time. I think we all understand this abstractly. Sometimes, as in the silly case of my mashed potatoes, money almost literally buys time, but it’s usually more subtle than this. When I think of my retirement savings, I think that every dollar buys me a certain amount of future time with which I can do as I wish.
- Money helps you meet your goals. It helps you do the things that need to get done. To use another example from my book-writing process, I’ve paid to buy books and journal articles to support my research. As I begin to focus on fitness, there’s no question that money helps me better pursue my objectives. If I don’t spend on Stuff and nonsense, I can use money to pursue my priorities.
- Money makes life easier. This one’s obvious I suppose, but you can use money to take away some of the drudgery in life. You own a car so you don’t have to walk or ride the bus. You might pay the neighbor kid to mow the lawn. Or, in my case, I rent office space so I can have a “fortress of solitude” in which to write.
For me, the transition from using money for instant gratification to using it for bigger purposes has been a slow one. It took a long time to even realize how stupid I was being. After I became financially self-aware, it took a few years more to break my old habits, though I finally seem to be gaining some degree of self-control. (As I mentioned last week, I haven’t used money to buy anything on impulse yet in 2010. That amazes me.)
And I’ve reached a place in my life where I can buy mashed potatoes from the grocery store and not feel an ounce of guilt because I know I’m practicing conscious spending.
$8 Per Hour
Normally, I think of supermarket mashed potatoes as a sort of rip-off. For $3.99, you get a pound-and-a-half of mediocre spuds. For four bucks, I could make twenty pounds of home-made mashed potatoes that taste much, much better. But was that $3.99 a rip-off today? Hell no! It was a bargain. That $3.99 bought me an extra 30 minutes to work on Your Money: The Missing Manual. To me, that’s cheap.
Of course, there’s just one problem: I didn’t actually use that 30 minutes to work on The Book. I used it to write this blog post instead. Ah well. Sometimes the things you build with your tools don’t turn out the way you’d planned…
Postscript: Kris and I have eaten dinner now. Her verdict? “These mashed potatoes are tasty,” she told me. (For the record, I was unimpressed.)
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JD – I agree with all that you’ve written in regard to money as a tool when used properly. But my comment centers on the potatoes.
I wouldn’t have wasted the time and money going to the store. I would have cleaned off a couple of whole potatoes, popped them in the oven about 2 hours before dinner, then when my wife came home I’d say, “honey, I felt like baked potatoes for a change.”
I’ve done this on a number of occasions, because my wife loves mashed potatoes, but hates making them. For that reason, in our house, mashed potatoes are my job, and if I’m tied up, it’ll be baked every time.
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Uh-oh. Next you’re going to hire a personal chef. And we both know the type of comments that will show up when you write THAT blog post.
Congrats.
-Erica
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Good article, thanks.
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I followed the concept last summer. Mowing the lawn was one of my least favorite chores. I use to always do it on the weekend when my kids took a nap. I ususally got about 2.5 hours of me time a day on the weekend and I had to spend 1.5 of that mowing the lawn. I did the math and figuared out my weekend was worth about $40/hr to me. Meaning the amount of work I did durign the week to earn X dollars made my free time worth roughly $40/hr. It was well worth it to me to hire a lawn service at $25 per week to give me that 1.5 hrs back on the weekends. Here is an example of using Money as a tool to buy me free time to do as I please.
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I am totally in the “money is a tool” camp as well, and have been for years.
When my daughter was three I went back to work – having been in school since before I was pregnant until just before her third birthday. And suddenly I wasn’t a ‘stay at home/student parent’ but a working parent. AND the job came with travel and overtime.
I hired cleaners for the house. It was just a no brainer to me. I was making almost twice as much an hour as I was paying them, AND they did the job better and faster than I did. To me that made it a great deal!
I was told that it was “too expensive” and that I should just do it myself, but I’ve come to believe that said more about societies idea that a woman should be able to do everything a man does AND keep a perfect house. People were offended that I admitted out loud that I couldn’t! But in the last 12 years, I’ve never regretted the decision. Maid service is the tool that makes our life possible, and is worth every penny.
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@ #34 kaitlyn: I completely agree. I would not open a book with Ayn Rand (if I were writing a mainstream personal finance book) because, as I stated here previously, an opening quote is quite a statement about the remainder of the book. I’m a Christian but I also like Ayn Rand. My primary point is that diversity is strength.
On a separate note, if J.D. wrote a book and quoted from someone that disgusts me on page one, I would still buy it because I like J.D’s writing and I would trust that he was using the quote for the sake of context. I don’t buy books for quotes and don’t judge them by their cover. The word is not the thing.
@ #50 Scott R: I agree with you as well and I assume you were not addressing me as an “arrogant” fan of Ayn Rand. My initial comment on Ayn Rand was not necessarily one of adoration for her philosophy (objectivism), but one of disgust for political correctness in the name of selling more books.
Once again, I’ll buy J.D.’s book regardless of any particular aspect. I trust that the whole will be valuable for my purposes, because I know J.D’s writing and general intentions, regardless of the names attached to the quotes in the book.
Cheers to all for the stimulating conversation…
Kent
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This is where cost/benefit analysis comes in.
It’s easy to get stuck in our frugal habits, even when they don’t make sense for a particular circumstance. I’m in a particularly stressful point at work, and my daughter was supposed to take cupcakes to school for her birthday last week. I already had all the ingredients on hand, and I could have spent a few hours of my holiday baking and frosting cupcakes, but instead we spent $15 for store-bought cupcakes. My daughter was delighted, because there were 4 different kinds of cupcakes and frosting variations. I usually make a homemade treat instead of buying them, because I like to bake, but the kids didn’t care, so . . . Well worth the $15 extra cost.
Now, were I unemployed . . . I would have made the cupcakes with the available ingredients, and DD would have liked those, too. And my frugal habits would have kept $15 in the family coffers.
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“In fact, I’ve been buried in editing ever since.”
Probably moving all those periods from outside the parenthesis to the inside. I warned you about that!
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Oops, I meant quotation marks! Looks as if I may need to do some editing as well…
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It takes me more than 30 minutes just to go to the store and back, and it’s less than a block from my apartment…
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Wow, 60 comments on potatoes! I think the other thing that the money bought you was peace of mind. By making a decision to buy mashed potatoes, you could put it out of your mind without feeling guilty about letting Kris down, or struggling to find a good stopping point that still would let you fit in your potato commitment.
PLUS now you can better appreciate your own cooking, so it’s a win all around.
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I’m rather fond of Ayn, although my feelings are much moderated from the adoration of my college years. For me, the quote would have sealed the deal and put you book right in my shopping cart. But I like your new choice better, and I do look forward to reading your book.
I’m with Tyler on the potatoes though. For me, it was my one-and-only potato salad, which ultimately involved a few calls to my MIL, potatoes flying across the room, and a bit of bloodshed! They weren’t Red Bliss when I started out! I think the time/money tradeoff is different for everyone though, and often differs for the same person at different times of one’s life, and the specifics of the tradeoff. For example, I would just as soon pay someone to do my gardening as pat my cat, kiss my husband, or read a great new novel for me. For others, gardening is a distasteful chore. And my husband loves to cook and is a great one – I think he would consider store-bought mashed potatoes an obscenity. The important thing is the mental exercise of assessing the trade-off, and deciding that the terms work for YOU.
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If spending a certain amount of money can save you enough time that you can make back that money and then some, then its a no-brainer.
Its an advanced way of thinking about money/time management, but a good one
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J.D.,
This is why I keep reading this blog; You are so real! Thank you for sharing this and so many more honest, down-to-earth postings.
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J.D.,
You might be careful splurging $4.00 for mash potatoes if you’re making less than minimum wage writing your book. That’s like half an hours worth of work! So technically that was an even trade. Wait, you said you didn’t work on the book. I guess you lost $4.00 today. Oh the horror. What will the readers think???
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JD I really appreciate what you just wrote:
“When I think of my retirement savings, I think that every dollar buys me a certain amount of future time with which I can do as I wish.”
I will print this quote and put it on my fridge
Meanwhile I disagree with this comment (#6):
“Just so you know this is a VERY slippery slope. One minute you’re buying mashed potatoes b/c you’re too busy to make them, and then you have a maid come clean your house b/c your’re too busy. You’ve got to be very careful about this..”
What is wrong with giving a local person a job, if only for a few hours?
Granted, many of us can do our cleaning ourselves, but there comes a point when hiring someone else to do the work does make sense. So why not hire a well-recommended person to do the work that we ourselves cannot do, or would rather not do.
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@Kent (#29) wrote
“it sure is disappointing that a person comfortable and confident in their values and beliefs would turn away from a book after reading one sentence quoted from an individual that thinks differently.”
My guess is that the editor is looking to avoid causing people who are not necessarily comfortable and confident in their values and beliefs to put the book down after opening it based only on the title and cover art. Regular readers of GRS would probably continue to read past the opening quote because we would have picked up the book based on the name of the author and our familiarity with his writing.
J.D.: I presume that you are still generating income through this site, so the fact that you spent the 30 minutes saved by buying the potatoes on your blog entry rather than the intended editing does not nullify the utility of the $3.99.
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To make unimpressive instant mashed-potatoes better:
get some fresh (or frozen) chives and drop a good load of little chunks in the mashed-potatoes (while they’re getting ready – actually just before they’re ready). Add a knife load of butter. boom.
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Tyler (and Rosa): Peel away from the body.
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I agree with what you are saying for the most part.
I have never looked at retirement savings as buying time for something later that I want to do. However, that is certainly a true statement.
I think the main point to remember is what is the value of your time. It is different by individual. Its like mowing the yard. Do I pay someone $50 to do it or should I mow the yard myself. Would I be making money during that time that exceeds the cost of mowing? If so, then I should probably pay a person. However, I like being outside and like the exercise, so I mow it.
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JD – For the record, I love mashing potatoes. One of the best gifts I ever got was a good masher. It makes all the difference… nonetheless, be sure you mix the butter and potatoes before you add any sour cream/milk. We also add different kinds of cheeses or garlic. Try to buy that at the store!
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Nicole – it was the interaction between fingers and peeler that was the problem – couldn’t figure a way to keep the fingers out of the process (and therefore out of the potato salad!)
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I find it delightfully ironic to read of your progressing relationship with money. At this point in the soap opera, you find that you have taken your dislike/fear of spending money too far and that for all its negatives, it does have redeeming qualities and it can be viewed in a positive light. The climax reached, your relationship now transitions pleasantly into one of a long-married couple where an understanding of one another’s shortfalls has been reached and life goes on without the bickering over the small things.
Congratulations!
Here’s to moderation in all things!
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Good luck with the book!
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Kent @29/56, not everyone who disagrees with you is worth reading merely because they disagree with you. If you adore Ayn Rand, that’s fine, but it’s more than a little insulting to imply if someone does not, it’s because they don’t challenge themselves enough and just want an echo chamber.
J.D., your analysis about money and time is good, but add me to the “WTF?” chorus on the instant mashed potatoes. Not that there is anything wrong with the potatoes! But it can be a slippery slope, particularly when the analysis isn’t really true – as you found out when you used those “saved 30 minutes” to blog instead of do what you needed to do with them.
Or maybe it was worth the money not to mash the damn potatoes.
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Mythago — yes JD used those 30 minutes to blog. He also gets paid to blog for those 30 minutes. So what are you missing? I don’t understand the logic behind the minority of “WTF” camp (your words -not mine lol)… Do you not get the point that JD used money as a tool in order to buy time — even if he had done nothing (which in this case he blogged for a MUCH greater monetary gain than $3.99).
Cheers!
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Loved the post, but HATE instant mashed potatoes.
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I understand your point about using money as a tool, but for heaven’s sake. It takes less than 5 minutes to peel some spuds. It takes 20 minutes to boil them, during which time you can be editing. Or, you could take a break and do some stretching or something else which is important for your wellbeing. Then it takes less than 5 minutes to mash them.
So you spent, what, $3.99 to save yourself 10 minutes. Except you had to go to the store to buy them, because you probably had spuds at home but you didn’t have this bucket, and that probably took up your 10 minutes you “saved”.
Money is a tool, yes, but this is not a good example!
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Hi J.D.
Interesting post. Following the website in the last years, I have seen your move from money as a crutch (debt) to phase 3, where the use of “superfluous” money becomes a question. This post links money to time, which becomes a new step in my opinion.
The concepts you apply to money also apply to time, when you look at the larger picture. Some people spend 5 hours per day vegetating behind a television (phase one, being in debt), some people realize they want more and take control of their life (phase 2) and some have control and now face the question of what is worthy of their time. Here you see the overlap of time and money, denoted by your mashed potatoe example. However, there are some things that are fundamentally different. For one: you can´t save time, only spend it one second per second. How you spend it is the big question. Money is something that can be saved and even used to create more money, via investing, but money can be used to transform essential time spending into non-essential time spending. If you had to make the potatoes, the 30 minutes was essential, but your additional money allowed you to shift the time burden to just buying. You haven´t actually saved a single second, still only 24 hours per day, but you have increased your effectiveness, measured in spending towards your true goals.
I think this is one of the main drivers for many people on this site. Getting out of debt and getting control over spending and savings is nice, but being able to to spend your life more useful goes way beyond that, and solid monetary habits help in that perspective.
Out of personal curiosity, do you think of a 401k as a lump of money to pay for your needs in the future, or as a bag of free time, allowing you to spend all your future hours as you like with no worries?
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JD,
great post! I think that the most difficult part of using money as a tool is determining when you’re using as a tool, and when you’re being wasteful. Although in this particular case, the trade-off between time vs money was not a large sum of money. When the stakes are a lot higher, e.g. doing some kind of home renovation by yourself. It definitely gives you a lot to think about…
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Okay… okay… Wait one minute… Are you telling me, that you sit and watch your potatoes boil? I have no problem with you buying pre-mashed potatoes. But could you not have written your post while the potatoes were boiling?
I completely agree with your concept. Just not your example.
The way I decide whether to tackle a job is:
Price + time + fun/not = “cost of job.”
I compare “Cost of Job” with “How much I make after tax.”
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That is something I have been trying to teach my two children for some time now – money is a tool. How you use it. How you think about it. The value you give it. Like a hammer or a screw driver – a tool is only as good as the person who is using it.
The better the knowledge, the better the ‘know how’, the more that tool can be uses. With a paint brush you can paint a house, but in the hands of Micheal Angelo – it was used to make works of art.
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