Ways Frugality Increases Productivity
post by Ben_West
I occasionally hear arguments like:
There are lots of ways that one can spend money to gain more time (and therefore presumably be more effective): buying taxis instead of walking, getting takeout instead of cooking, renting an apartment closer to your workplace, etc. Therefore, even if you are perfectly altruistic and ignore the impact that spending more on yourself might have on your personal happiness, you should spend a large amount on yourself.
This seems reasonable – there are ways to spend money to gain time – but I rarely hear the opposite argument, even though the opposite argument also seems reasonable.
Some ways in which being frugal makes you more productive:
- Low cost of living enables you to be more flexible: when I started my company, I went without an income for about two years, and it only took a few months of savings to build up that two-year runway. If I had a higher standard of living (e.g. because my apartment was close to work) I would have needed to plan much further in advance or take out a loan or something similar.
- It’s much easier to keep your nights and weekends free if your entertainment budget is zero. Many of the greatest opportunities I’ve had in my life came through something like my boss coming to me and saying “our senior engineer just quit right before the deadline, so even though you are too junior for this to normally be your responsibility, can you work through the weekend to get this done?” If I had had regular, significant weekend plans, I would’ve turned those down and accomplished much less.
- A lot of what distracts me from work is the opportunity cost of what I could do in my free time. Many people use distraction blockers during their work hours to keep them focused by preventing them from using “fun” things during work hours, and it’s fairly common for people to e.g. travel to an isolated cabin in the woods when they really want to focus. Living frugally is kind of like (metaphorically) living in an isolated cabin in the woods.
- Of course, cost and distracting-ness aren’t always correlated: social media is very distracting, despite being free.
I’m a little hesitant to publish this because I don’t think most people should prioritize frugality. I also agree that there are many legitimate ways in which spending money can make you more productive, and that we should take advantage of those. And I don’t think we should shame people for spending money on themselves, nor should we expect people to ignore their own happiness.
But it does seem like the “spending money to save time is effective” meme sometimes morphs into “spending money on yourself is effective”, which seems rather dubious to me.
1. I mostly hear this argument verbally. I'm not sure if there is a canonical written version of it; Critch's post might be the closest: http://acritch.com/pledging/
Comments sorted by top scores.
comment by Khorton ·
2019-06-25T21:42:15.323Z · EA(p) · GW(p)
Argument 1 makes sense. Arguments 2 and 3 mostly seem like arguments against having a life outside of work - am I reading that right?
comment by Ben_West ·
2019-06-26T17:36:58.526Z · EA(p) · GW(p)
Arguments 2 and 3 mostly seem like arguments against having a life outside of work - am I reading that right?
Yes, if you want to maintain flexibility to jump on new projects if exciting opportunities arise, you probably shouldn't have much of a life outside of work.
(Note: I personally do have a fairly involved life outside of work, and am fine with that trade-off. I'm just pushing back against the claim that no trade-off exists.)
comment by JP Addison (jpaddison) ·
2019-06-26T21:18:01.296Z · EA(p) · GW(p)
[Disagreeing with my boss on the internet, but after chatting over lunch]
Inflexible life outside of work seems to be the problem. There are monetary and non-monetary examples of ways to become inflexible:
1. I spent $500 on my weekend plans. I can only that infrequently, so I really don't want to miss it.
2. I'm leading a group on a road trip this weekend. If I bail they'll be disappointed.
This echoes Gordon elsewhere in the comments, but I claim that non-frugality can be quite slack-constraining. This post has updated me towards keeping more slack in my budget. I'd like to not spend a significant portion of my spending money on any single adventure.
comment by JP Addison (jpaddison) ·
2019-06-26T21:18:37.898Z · EA(p) · GW(p)
Follow-up thought 1: This model implies that frugality is budget-dependent. A trader at a hedge fund is much less constrained by $500 weekend plans. In fact, thinking about this model might make the trader seem less frugal, as she wantonly cancels expensive trips. I'm tempted to say this means I should be paid more (Hi, boss! 😛) but I actually think it's income-neutral, and mostly about my budgeting.
comment by Jemma ·
2019-06-26T10:37:08.224Z · EA(p) · GW(p)
Point 2 confuses me on an empirical level. I don't know many people whose social/leisure life largely consists of locked-in regular weekend/evening plans that they can't change if a work opportunity (or anything else) comes up. More importantly, whether the fun activities are flexible seems to be unrelated to their cost. In fact, the commitment/cost relationship is usually negative -- it's often cheaper to pay for, say, sport and exercise classes if you lock in a series of lessons rather than paying casual entry. Likewise, casual commitment-free leisure like drinking alcohol or going to a restaurant can be much more expensive per hour than a regular commitment like playing on a friendly soccer team.
I'm not disagreeing with the post's final paragraph -- I recently decided against picking up a particular sport largely because it seemed self-indulgently expensive. But I don't think that point 2, in particular, is factually true, even if you agree that you should reduce your leisure time to work more.
comment by Jemma ·
2019-06-27T11:59:10.814Z · EA(p) · GW(p)
Also, there are many ways that frugality can boost productivity that aren't mentioned in this post. A major one would be that living in an apartment, rather than a large(r) house with a garden, substantially reduces the time spent on home cleaning and maintenance.
comment by Davis_Kingsley ·
2019-06-26T10:15:26.266Z · EA(p) · GW(p)
The most important thing in life is to be free to do things. There are only two ways to insure that freedom — you can be rich or you can you reduce your needs to zero. I will never be rich, so I have chosen to crank down my desires. The bureaucracy cannot take anything from me, because there is nothing to take.
Colonel John Boyd
comment by anonymous_ea ·
2019-06-26T18:21:27.951Z · EA(p) · GW(p)
I’m a little hesitant to publish this because I don’t think most people should prioritize frugality.
Can you expand on why you think most people shouldn't prioritize frugality? Do you mean most of the general population, most EAs, or some other group?
comment by G Gordon Worley III (gworley3) ·
2019-06-26T17:19:23.483Z · EA(p) · GW(p)
I think much of the work being done by what you think of as frugality here is actually being done by slack [LW · GW]: creating conditions under which you have enough flexibility to take advantage of situations when they arise and not be so attached to things as they are that you miss opportunities you value after taking. Only in your first case do I think frugality does the heavy lifting; everywhere else it is a way you created slack for yourself, but it could have been accomplished many other ways while living a more materially lavish life.
comment by ishaan ·
2019-07-19T20:58:35.668Z · EA(p) · GW(p)
I super agree with the title, but I think the text actually really undersells it! Runway not only increases your flexibility to not earn, but also reduces your stress and removes all sorts of psychologically difficult power dynamics that come with having a boss or otherwise being beholden to external factors for your well being (Yes, you may still have a boss or external factors, but now you won't need their continued approval or success to pay bills, and that makes all the difference). Also, frugality enables you to really splurge without worrying when it really counts. Additionally, If you do not have any large and expensive possessions, tend to live in low cost apartments, and don't have any dependents, you can move to whatever location it is most productive for you to be in with little to no overhead - whether that be across town or across the globe. Frugality in an urban context also forces close living situations (housemates) which can dramatically increase your social network. Further, you end up building scrappy skills and habits (e.g. negotiating apartments, meal planning, knowledge of public services, biking) which can really come in handy even when you're not being frugal.
If you have the privilege to be in circumstances where you are able to make money without spending most of it, it's good to take advantage of this if you can. Don't feel bad about it if you can't - it's not always simple or possible for everyone. But if you feel like it would be pretty easy for you to be frugal and you're choosing not to because you think spending a lot more makes you more productive, I strongly suggest reconsider.
Another point worth considering is that if you are sufficiently frugal, and if "productivity" is truly your goal here, you can "increase your productivity" by taking that money and hiring a second person to work on your project with you. Can all your time saving expenses increase your productivity more than a whole second person? (I'm sure there are some circumstances for which the answer is yes, but I imagine that is rare.)
comment by MaxCarpendale ·
2019-07-19T19:45:38.658Z · EA(p) · GW(p)
Another way that frugality can improve productivity is that it can reduce the amount of time you spend buying, looking after, organizing, tidying, and thinking about physical possessions (because you probably have fewer of them). Of course, people who aren't frugal don't necessarily have more things, but they tend to have more of them.
comment by KathrynMecrow ·
2019-06-28T19:50:47.105Z · EA(p) · GW(p)
I may have misunderstood your argument, so apologies if so. As someone who has definitely tried both approaches here, my anecdotal experience is that it depends on what you value and/ or need. I value and need a life outside of work and a solid in-work support system, to be happy and maintain my mental health. If I go for too long without investing in these areas, my productivity suffers in the longer-term, ought-weighing any short-term productivity gains. I think alot of the results you cite here (i.e. "Living frugally is kind of like (metaphorically) living in an isolated cabin in the woods") have short-term productivity gains with the potential for long-term productivity detriment. For me, I think dividing it into "Happiness" and "Productivity" is misleading and for many the former feeds into the latter. So, when I buy a gym membership, while I loose the 120 minutes it takes to work out, I gain better quality and longer-sustained work later.
comment by Ben_West ·
2019-07-08T14:55:45.598Z · EA(p) · GW(p)
Thanks for the clarification! I agree that there are lots of ways that spending money on yourself can make you more productive, and a gym membership seems plausibly like one of those for you. I'm just pointing out that not all ways of spending money on yourself improve your productivity (which is a claim you might not endorse, but seems to have gotten some traction in EA).