This piece first appeared on ClearerThinking.org on February 28, 2024, was edited on February 29, 2024, and appeared here with minor edits on March 27, 2024.

Does money buy happiness? Intuitively, the answer is yes: common sense tells us that poverty and hardship make people unhappy. We can use money to buy a lot of things that might make us happier – things like a nicer home, fancier vacations, education for our children, or just the opportunity to have more free time. On the other hand, it’s a cliche that “money can’t buy happiness.” Many admire and aspire to the lifestyles of multi-millionaire celebrities, yet rich and famous people often seem desperately unhappy. 

But what does science say about this question? The answer is relevant for all of us as individuals: how important is it for our happiness to strive to make a high salary? It’s also relevant for states: if policy-makers want citizens to be happy, should they prioritize increasing their wealth, or other things?

So, what’s right? Does money make you happier, or is happiness something money can’t buy? In this article, we tell the tale of scholars’ attempts to find out whether money makes people happier, and why they ended up disagreeing on such an apparently simple question. We think you’ll find the results surprising — particularly the recent saga of how some scientists set out to understand the link between income and happiness.

As usual, we’ll discuss the studies’ methodologies and results in detail throughout this piece. However, if you’re short of time and/or just want to know what are the key takeaways, you jump to the “key takeaways” section, at the end of this article. 

Does money increase life satisfaction?

There’s a clear, cross-cultural relationship between income and ‘life satisfaction’ (or ‘life evaluation’). This is broadly how well someone thinks their life is going, relative to what’s realistic for them. For example, in the Gallup World Poll (a large survey, run in over 160 countries), surveyors measure life satisfaction by asking participants in their native language:

“Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?”

This is known as the ‘Cantril ladder’. Participants with higher incomes tend to place themselves higher on the ladder than those with lower incomes. This is true both across countries and within countries. In poorer countries, people rate their life satisfaction as lower than in richer countries:

Source: Our World in Data

Citizens of poorer countries, where the GDP per capita is less than $5000, have low average life satisfaction (3-5 out of 10), whereas in richer countries like Switzerland, Singapore or the US, the average life satisfaction rating is higher (6 or 7 out of 10). Results are typically similar for other measures of life satisfaction, such as answers to the question “In general, how satisfied are you with your life?”

To complicate things somewhat, the relationship between income and life satisfaction is logarithmic. This means that every time you double someone’s income, their life satisfaction doesn’t double, but increases by a fixed amount (in this case, roughly 1 point on the life satisfaction scale that ranges from 1 to 10). 

Note that the chart above is a “log plot” – you’ll see that on the x-axis, income roughly doubles at every division, going from $1000 to $2000 to $5000 to $10,000. So a straight line on this plot means that every doubling of income is associated with an increase in happiness of a fixed number of points. On a regular (not logarithmic) scale, the graph instead looks like this:

Source: Our World in Data

This means that though an increased income is associated with greater life satisfaction, this is proportionate to how much a person is already making. Let’s say you start making an extra $1000 a year in income: this will impact your happiness a lot if you were originally making $2000 a year, but it won’t make a big difference if you were already making $100,000 a year. To put it another way, for those who are poor, life satisfaction will typically increase quite a bit as they make an additional $10,000, but for those who are rich, this amount of money has far less impact. .

The charts above show the relationship between income and life satisfaction across countries, but higher-income countries and lower-income countries differ in many ways other than wealth. For instance, lower income countries tend to have worse healthcare systems, so it’s hard to tell if they have lower average life satisfaction due to lower incomes or due to worse healthcare systems (or due to a myriad of other differences between wealthy countries and poorer countries). So it’s hard to be confident from this data alone that higher incomes cause greater life satisfaction, rather than some other factors increasing both income and life satisfaction.

That’s why it’s useful to bring in evidence from within countries, to see if the effect holds within a single country as well.

Source: Our World in Data

Each country in the chart above is represented by a line, connecting the average reported life satisfaction of people in five income quintiles within the country. The chart is messy, but in general, the story is the same: most of the lines trend upwards, with richer citizens reporting a higher life satisfaction than poorer citizens.

Source: “Subjective Well-Being and Income: Is There Any Evidence of Satiation?”, Betsey Stevenson and Justin Wolfers, NBER Working Paper 18992, April 2013. Reformatted in the Economist

The chart above shows a more limited sample of countries. This data is older, from 2013, but it shows a similar trend: if we look at the US line, we can see that average life satisfaction ranges from about 6.6 (out of 10) at the lowest incomes, to around 7.5 at the highest incomes. Compare this to the India line: average life satisfaction is lower in India overall, but just as in the US, poorer Indians on average report lower life satisfaction (about 4.2) than richer Indians (about 5.8).

Other ways of measuring life satisfaction also show within-country differences in life satisfaction depending on income. For example, in the chart below, participants in the US were asked whether they were ‘very satisfied’, ‘somewhat satisfied’, ‘somewhat dissatisfied’ or ‘very dissatisfied’ (rather than being asked to rate their satisfaction on a scale). The proportion of ‘very satisfied’ people is higher in higher income bands, and the proportion of dissatisfied people is lower. Although the number of participants is not high in the lowest and highest bands, on the right hand section of the table (Panel B) we see a fairly steady increase in the percent of people who are very satisfied as income rises. 

Source: “Subjective Well-Being and Income: Is There Any Evidence of Satiation?”, Betsey Stevenson and Justin Wolfers, NBER Working Paper 18992, April 2013. 

Note that even this within-country data doesn’t prove that income causes greater life satisfaction: all these polls show is a strong association between income and life satisfaction. Perhaps even within countries, other factors (such as the quality of infrastructure in richer vs poorer areas of a single country) cause people to feel more satisfied with their lives and to earn more money. However, given that across-country and within-country evidence agree, and it’s reasonable to assume a priori that money can contribute to life satisfaction by enabling people to buy things they want and need as well as to have more control over their time, it stands to reason that there is probably a causal link. But we should keep in mind that the data don’t provide absolute proof that an increase in income causes an increase in life satisfaction. 

An additional complicating factor is that this data measures averages. Even if on average it’s the case that greater income causes greater life satisfaction, for any given person, income and life satisfaction could be more or less closely related than average. This means that two people of the exact same income may be impacted very differently by the same increase in income: perhaps the extra money allows one person to leave a career they hate and pursue one they love, whereas the other just puts the additional income into their savings and doesn’t end up using it for anything important. So we have to be careful not to make confident generalizations about individuals, based on the average. 

So, if more money is associated with greater life satisfaction, is it right to say that the wealthier tend to be happier? Not exactly: it depends what you mean by happiness. 

Does more money make you happier day-to-day?

The Gallup polls, and many other studies related to happiness, measure life satisfaction: participants are asked to reflect on their lives holistically and think about how things are going. However, life satisfaction is only one way to measure a person’s happiness. We might also consider how emotionally happy people feel day to day: whether they tend to feel joyous, content and calm, or stressed, depressed and anxious. This is sometimes known as ‘hedonic wellbeing’ or ‘experienced happiness’.

Psychologist Daniel Kahneman and economist Angus Deaton wondered if there was a relationship between this moment-to-moment hedonic wellbeing and money, just as there was with life satisfaction. In a 2010 experiment, they analyzed more Gallup data, this time from 1000 U.S. residents. This survey, rather than asking participants to rank themselves on Cantril’s ladder, instead asked them whether they had experienced specific emotions for a lot of the previous day (for example ‘enjoyment’ ‘sadness’ or ‘worry’).

The researchers then grouped these emotions together into ‘positive affect’ – happiness, laughter and enjoyment – and ‘blue affect’ – sadness and worry. They also measured stress. People with higher incomes were more likely to report experiencing positive emotions the previous day, and less likely to report sadness, worry or stress.

Source: “High income improves evaluation of life but not emotional well-being”, Daniel Kahneman and Angus Deaton, PNAS 107, September 2010

As with life satisfaction, the relationship between hedonic wellbeing and income was logarithmic in Kahneman and Deaton’s data for lower incomes, meaning that doubling a person’s income was associated with a fixed increase in their hedonic wellbeing. However, unlike with life satisfaction, this experiment seemed to show that increases in emotional wellbeing taper off at around $75,000 per year (in the U.S.); after that, extra money didn’t seem to increase wellbeing anymore.

On the graph above, ‘ladder’ refers to Cantril’s ladder, the life satisfaction question asked in other studies. You can see that this line continues to go up while the hedonic wellbeing lines flatten out. Again, note that this x-axis is on a log scale, with income doubling every division.

This provides an interesting contrast to the life satisfaction studies: it seems that if you already make $75,000 a year in the U.S., you might become more satisfied with your life if you made more money, but you’d be unlikely to have more positive emotional experiences day-to-day. This makes some intuitive sense: money helps us meet our basic needs and can solve a lot of problems, but there are other problems that it’s much harder to solve with money and that even billionaires have to face — for example relationship conflict, bereavement, or mental and physical illness. Maybe once you’re making $75,000 a year, you can solve all the problems that are soluble with money, leaving only those trickier problems.

But it turns out that story is wrong! 

Questioning the taper 

It makes intuitive sense that day-to-day, hedonic wellbeing would taper off at higher incomes. However, Kahneman’s and Deaton’s result did not hold up to scrutiny. A decade later in 2021, economist Matthew Killingsworth tried to replicate their conclusion on new data. He found something different: in his analysis, hedonic wellbeing did continue to increase with income, even above $75,000 a year. It didn’t taper off or plateau. The slope of the graph was also the same below $75,000 a year and above $75,000, meaning that on average, a doubling of income from $15,000 to $30,000 a year and a doubling from $75,000 to $150,000 a year are associated with the same increase in emotional wellbeing.

What was going on here? Kahneman (the author of the first paper), Killingsworth (the author of the second paper) and psychologist Barbara Mellers, keen to get to the bottom of this, acted like ideal scientists: they embarked on an adversarial collaboration, all working together to try to work out why Kahneman’s and Killingsworth’s experiments had got such different results.

They discovered a few important differences between the 2010 and 2021 studies. First, the 2021 study used more accurate data collection methods. In Kahneman’s 2010 study, surveyors had asked participants to recall whether they’d felt certain emotions the previous day. But in Killingsworth’s experiment, participants instead received smartphone notifications several times per day that asked them to rate how they were feeling at that moment, on a scale of ‘very bad’ to ‘very good’. Since they asked participants multiple times and asked them to describe their feelings in the moment, rather than relying on memory, they got a more accurate measurement of each participant’s general hedonic well-being. There were also many more data points in the 2021 study: over a million data points from 33,000 people (vs 1000 people in the 2010 study, which when separated into different income buckets makes it a bit thin). Killingsworth’s experiment also surveyed more high-income people and had more different income bands, rather than lumping together all participants who made over $120,000 a year.

However, despite this, Kahneman and Killingsworth (when working together) did find some evidence for a plateau in hedonic wellbeing above $75,000 a year in income. So why didn’t it appear in Killingsworth’s study? Why did Killingsworth find that emotional wellbeing didn’t seem to plateau even at high incomes, up to $500,000 a year and beyond?

When the authors re-examined the data from the 2021 study, they discovered that the plateau did exist — for the 20% of the population with the lowest emotional wellbeing. That is, if you experience lots of negative emotion to begin with, additional income is not associated with increased hedonic wellbeing once you make over $75,000 a year, but if you have average or high hedonic wellbeing, additional income is associated with an increase in day-to-day positive emotions, even if you are already wealthy.

As they investigated, they realized that they had missed this because their methods of measuring wellbeing worked better as measures of unhappiness, or negative wellbeing: they couldn’t easily differentiate between people who were pretty happy, moderately happy, and very happy (in terms of their day-to-day emotions). This made it more difficult to spot that the plateau only existed for the 20% of the population with the lowest day-to-day wellbeing. 

So does that mean day-to-day wellbeing does increase the richer you get?

Well, yes…and no. Media discussions of this story focussed simply on whether happiness increases with income, since that was the main focus of the research. 

But another relevant question — probably more relevant for most people — is how much happier does more money make you? Let’s look at the data (on a regular, non-log scale):

Source: our reanalysis of data from Kahneman, Killingsworth and Mellers’ 2022 adversarial collaboration.

Does it look like average wellbeing increases in the higher income categories? It basically looks like it doesn’t! If you squint, you can just about notice that the bar in the $625,000-a-year band is a tiny bit higher than the bar in the $15,000-a-year band. 

You can only see that logarithmic upwards line if you zoom way in:

Source: our reanalysis of data from Kahneman, Killingsworth and Mellers’ 2022 adversarial collaboration.

Look at the y-axis. In this zoomed-in version, you can see that the lowest point of the curve — the average wellbeing of people making $15,000 a year — is at about 60.9, on a 100-point scale. The highest point — people making $400,000 a year — is 65.8. That is, the difference between the poorest and the wealthiest is only about 5 points, on a 100-point scale!

The takeaway from these hedonic wellbeing studies is often ‘more money makes you happier’. While this isn’t wrong, a more relevant lesson from this research might be that people with vastly different levels of wealth have surprisingly similar levels of emotional wellbeing. 

To put this another way, even if we assume this entire effect is causal (that is, that income is causing all of this increase in emotional well-being), then if you made 25 times more money, taking you from the bottom 10% to well within the top 10% of US incomes, you should only expect to get half a point happier on a 10-point scale (from 6 to 6.5). 

We suspect that many will find the small size of this effect surprising. 

To be fair, the authors of the adversarial collaboration did mention this, but it wasn’t the focus of the paper, and we suspect that many people who looked at the paper briefly would have missed it:

‘[Kahneman and Deaton] reported that the effect of an approximately fourfold difference in income is about equal to the effect of being a caregiver, twice as large as the effect of being married, and less than a third as large as the effect of a headache.’

What is the more interesting finding — that emotional wellbeing goes up logarithmically with income, or that emotional well-being goes up very little with income? We think that the second finding is likely to be the more important one for most people.

Now, of course this result doesn’t mean that you yourself wouldn’t have much higher emotional wellbeing if you were to increase your income substantially — but the link seems weak enough that we should be wary about assuming we’ll feel much happier moment to moment if we make more money. 

Life satisfaction varies much more than hedonic wellbeing 

If hedonic wellbeing varies so little, what about life satisfaction, the variable we discussed at the beginning of this article? The data show that people with greater incomes have higher life satisfaction, on average, but is this difference equally tiny? 

No: if we look again at the within-country data on life satisfaction, we can see that the US line spans more than 1 point on the 10-point scale. What’s more, the difference is even greater if we compare countries: the poorest in India are about 3.5 points less satisfied, on average, than the richest in the US.

Source: “Subjective Well-Being and Income: Is There Any Evidence of Satiation?”, Betsey Stevenson and Justin Wolfers, NBER Working Paper 18992, April 2013. Reformatted in the Economist

So, life satisfaction, in general, seems to vary much more with income than hedonic wellbeing. 

–

To make a more direct comparison, looking at US data, every doubling in income is associated with an increase of 0.6 on 10-point scale in life satisfaction, and an increase of only 0.1 on a 10-point scale in hedonic wellbeing (or equivalently, 6 points on a 100-point scale for life satisfaction, and just 1 point for hedonic wellbeing).

Another way to understand this difference is to measure the variance from the mean of each measurement, which Killingsworth did in his 2020 study. 

Source: ‘Experienced well-being rises with income, even above $75,000 per year’, Matthew Killingsworth

Note that the x-axis here is logarithmic (with incomes doubling at each division), and the y-axis uses not absolute scores but z-scores, which measure how many standard deviations each participant’s score is from the mean. The blue “life satisfaction” line slopes up more sharply than the red hedonic wellbeing line, meaning that as income goes up, life satisfaction rises faster than experienced well-being (it increases by a greater number of standard deviations).   

This is counter-intuitive: if people’s day-to-day feelings are middling (as they seem to be, on average), shouldn’t this lead to a middling level of life satisfaction? Are people bad at remembering their day-to-day emotions, so that when they answer life satisfaction questions, they overestimate or underestimate how good their life is?Perhaps. But more plausibly, life satisfaction and hedonic wellbeing are different elements of happiness, rather than two different ways to measure a single, unitary trait. Most people value positive emotions, but they also value other things, including career, family, status, material goods, achieving their goals, and money itself. And sometimes, striving to achieve something you aspire to — something that would increase your life satisfaction — will cause more negative emotions in the short run — for example, when you overwork yourself and take on lots of stress to hit a work milestone. 

Key takeaways – Are people, on average, happier when they make more money? 

We’ve learned that:

• Making more money is associated with moderately greater life satisfaction 
• Making more money is associated with a very small increase in hedonic wellbeing 
• …unless we’re talking about is the unhappiest 20% of people who already make $75,000 a year or more in the U.S., in which case additional income was not associated with greater hedonic wellbeing
• In both cases (life satisfaction and hedonic wellbeing), extra income has a greater effect when you start off with less money – or, more precisely, each doubling of income is associated with the same effect.  

So, the link between income and happiness  depends on what you mean by happiness, and how much money we’re talking about. Ultimately, you can make some predictions about the way you might feel if you had more or less money, but like so many scientific questions, the answer is messy, and you’re unlikely to know for certain how things will turn out. Perhaps this is why our cultural clichés give us such mixed signals about this question! 

Building Happiness Habits

You’ve learned how income is related to happiness, but if you’re interested in exploring habits that could help you improve your day-to-day hedonic wellbeing, we encourage you to test Clearer Thinking’s “Building Happiness Habits” interactive tool.

It works by pairing certain happiness techniques – namely mindfulness and gratitude – with everyday activity triggers such as walking or checking social media, thereby cultivating happiness-improving mental habits. 

We tested each technique on hundreds of users and found that they made a positive difference for those who practiced them, in just 3 days.

Each technique is:

• Easy to learn – there’s no need for long, difficult training in order to be able to perform them.
• Simple to apply — there’s just one main thing to do, not a bunch of steps.
• Time-efficient — it takes just a few minutes a day to practice them.

Ready to make your days a little brighter?

More specifically, I suspect that art is created mainly for four reasons:

1) Urge: many artists seem to have a compulsion to create (sometimes, to create oddly specific things). They make art to satisfy this urge. In this category, I would also include art that is mainly motivated by helping the artist achieve the flow state that they are seeking, as well as art that is made to help the artist process their own experiences. For instance, “The Race Track” is a 35-inch painting that Pinkham Ryder spent literal years working on, “building up layers of paint, resin, and varnish…He used unorthodox materials such as candle wax and bitumen. In his urgency, he wouldn’t wait for each layer to dry and was often painting into wet varnish or brushing fast-drying paint into slow-drying paint” (the Washington Post reports). He painted it in response to an experience he had: a friend told him he planned to bet $500 on a horse and then died by suicide when the horse lost. This kind of work is the artist making something for themself, or because they feel like they can’t NOT make it. Sometimes, art created out of compulsion appeals to art lovers, but sometimes, it only appeals to the artist themself. 

2) Beauty: people love Monet for the stunning beauty of his paintings (often landscapes). If there is a deeper meaning beyond “I’ve captured something of great beauty and done so in a beautiful way,” I can’t figure out what that thing is. More often than not, I think that the sort of art that regular people and art lovers (as opposed to art collectors) buy for themselves is simply what they find beautiful or what they find that creates a pleasing vibe.

3) Emotion: lots of art aims less at beauty and more at stirring emotions or provoking interesting thoughts. Examples include the Fountain by Duchamp (a porcelain urinal signed “R. Mutt”) or the Treachery of Images by Magritte (a painting of a pipe with the French phrase, “This is not a pipe” written beneath it). This can be the deepest form of art, but it is often hard to distinguish it from bullshit: the line between deep and bullshit is a thin one. But even if you think works like The Fountain and The Treachery of Images suck, it’s hard to deny that they at least provoke thought (though this cannot necessarily be said for the endless derivatives that now exist that riff on these themes). I would also put political art, as well as art that just aims to amuse, in this category of art that is about generating emotion or producing thoughts in the viewer. Another more specific example of art that appears to be about emotion rather than beauty is Artemisia Gentilesch’s painting Judith Slaying Holofernes (which depicts the assassination of a general by the Israelite heroine Judith). Even if you find the painting heinous, it’s hard not to feel something when you look at it. Note I had originally used Goya’s Saturn Devouring His Son as an example here, but as Gwern pointed out, that was actually an example of painting done out of obsession, not for stirring emotions in others. Much of this kind of art is aimed at producing visceral emotions rather than intellectual thoughts. Art that evokes emotion is sometimes beautiful, but often it is ugly, shocking, or confusing. 

4) Playing Status Games: Art is a way for people to show off that they are in the know about what’s cool, that they have sophisticated and refined taste, and that they have lots of money. For instance, a member of the Saudi royal family purchased a Da Vinci painting (Salvator Mundi) for $450 million. As another example, Bored Ape #4580 (an NFT linked to an image of an ape wearing 3D glasses) sold for $1.9 million. Obviously, these were not purchased due to the great emotion or beauty evoked by these images. People buy these things because they want you to believe something about them (or, in some cases, less cynically but more pathetically because they are trying to convince themselves that they are cool). Collecting artworks is especially well-suited to status signaling because it better enables claims of connoisseurship and sophistication compared to buying, say, a yacht or private jet. Like everyone, artists want to make money, and some will lean into the social signaling aspects of art rather than creating art that they feel the need to create or rather than trying to make something deep or beautiful.

But, considering just these four motivations for making art, how do they work against each other?

Well, since most of the money in art comes from very wealthy people who are trying to signal status (to others, but also, sometimes to themselves), this warps the art market (especially what gets attention). For instance, it appears to have a really negative influence on what is shown in some galleries and museums (showing art that is about what it signals about the owner and viewer rather than art that is about the artist, beauty, or the emotion it creates in the viewer). 

I suspect that most people who go to museums and galleries want a combination of (1) learning about the interesting minds and lives of the artists, (2) seeing things of great beauty, and (3) seeing things that move them or make them think. 

Unfortunately, more often than is ideal, they see a lot of status signaling (sometimes it’s of the form “look how one-of-a-kind this is,” “sometimes it’s “look how expensive this is,” “and sometimes it’s “look how incomprehensible this is; if you were more sophisticated, maybe you’d understand”).

Most artists who toil away at making whatever they feel the urge to create, or whatever they find beautiful, or whatever they think will make people feel and think, are typically not going to make works that are effective at status signaling. So there is a subworld of artists producing works for wealthy people to use to signal status, and this stuff gets way overrepresented in museums, galleries, and the media relative to its value as art (as opposed to its monetary value in terms of what people will pay for it).

If what you want is beauty on your walls, you can simply get an inexpensive print or replica of your favorite works of all time. But people who play the art game would rather spend a lot of money on something unattractive than spend a small amount of money on something far more beautiful. In fact, ugliness makes something BETTER status signaling because lots of people can appreciate something beautiful, but only those most in the know (with the most evolved and sophisticated taste) can appreciate something that is shit. 

Sometimes literally. Piero Manzoni filled 90 tin cans with his own excrement. Christie’s auctioned off tin number 51 for $161,000 (unfortunately, the artist had already passed away, so I don’t think he got to experience his shit being worth more than gold).

So if you suspect that a lot of art that gets famous is bad, you’re honestly probably right, but that’s mainly because a certain kind of bad is good status signaling, and this crowds out attention from work that is more beautiful and more thought-provoking.

Thanks to Hunter Muir, Barry Galef, and Gwern for their comments, which were especially valuable in helping me improve this essay.

This piece was first written on November 11, 2023, and first appeared on this site on December 16, 2023.

If someone “wastes” $100, someone else now has $100 extra to spend. Even burning bills deflates the currency, making other bills more valuable.

But people’s time genuinely can be wasted. The tragedy of someone spending hundreds of millions of dollars building a yacht is not the dollars spent but the enormous quantity of people’s time and all of those resources that could have gone towards much more societally valuable pursuits.

If you don’t believe this, just consider what happens after the yacht has been built – those dollars spent are now in the hands of the shipbuilders, ship captain, crew, boat insurance provider, etc., who can spend it themselves. So the money is not lost – not even a single dollar of it disappears; it just goes to other people to use! But all of those people’s time and most of the materials used in building the yacht are lost forever.

What do I mean by “lost” here? Well, time and resources can be spent creating lots of what conscious beings intrinsically value (e.g., happiness, positive relationships, freedom, justice, etc.), or they can be spent producing little to no value. Time and resources are “lost” when they produce little to no value in the process of using them up.

Someone buying an expensive yacht gets some genuine value out of it: some pleasure for them and their friends, social status, etc. But that amount of value is really tiny compared to the hundreds of millions of dollars of labor and resources permanently used up in the process (that could have been used to produce far more value). That vast sum of labor and resources could have produced large amounts of value for many people, but instead produced a small amount of value for one person.

This line of thinking has a surprising consequence: frivolous spending on things that are expensive due to labor and resource usage is much worse societally than frivolous spending on things that are expensive only due to taste preferences. It is much worse for society if someone builds a yacht for hundreds of millions of dollars than if that person spends the same amount on a lost Leonardo da Vinci painting that someone recently found in their attic. The latter scenario mostly just involves money moving around (which causes no harm), whereas the former scenario not only moves money around but ALSO uses up a ton of labor and resources.

There is a libertarian counterargument that may seem to refute what I’m saying. It goes like this: if people enter into transactions willingly and with full knowledge of what they’re giving and getting, then they are better off because of those transactions, so all transactions are good, even ones involving buying frivolous yachts for hundreds of millions of dollars.

To take this to an extreme, let’s suppose a billionaire goes around paying people to undergo torture (let’s assume that, like most people, these people hate torture). The billionaire offers enough money that these people are willing to accept the offer even though it is absolutely awful for them. Now by standard libertarian logic, the world is still better off since the billionaire chose to pay them, and the participants being tortured were willing to do it.

On the other hand, compare how much worse off the world is in that case compared to if the billionaire instead paid people to make beautiful things, or to run non-profits that seek to make the world better, or used that money to fund new startups, or just gave the money directly to those same people instead of requiring that they be tortured for it. In fact, the world would be better off if the billionaire did “nothing” with the money – leaving it in the bank so others can borrow it rather than using it to pay for torture.

The issue is not that the world is strictly worse off if a billionaire pays people to undergo torture (you could imagine a world where both the billionaire and the torture sufferers are slightly better off post-transaction – this only requires that the torture sufferers accept the deal with complete knowledge of the consequences and that they really do value the payments enough to make the torture worthwhile according to their values).

The issue is that there is a tremendous loss of value if a billionaire pays people to undergo torture relative to what could have been if the billionaire used the money for almost anything else. Paying people to be tortured does not destroy money (the money merely exchanges hands), but it does unnecessarily destroy value (people’s time is spent being tortured, which is horribly dis-valuable, instead of doing things with that time that are valuable). In this hypothetical example, the billionaire’s huge sum of money could have been spent on numerous things that would have produced value, and yet, they found one of the very least valuable ways to spend via voluntary exchange (by purchasing people’s suffering).

Buying a yacht is far less extreme than paying people to be tortured, but the torture example helps illustrate the point: using money never destroys that money; money always just moves hands, and some uses of money produce a lot of value in the world, and some don’t (and some even destroy value). Another way to put it is: buying a multi-hundred-million-dollar yacht creates VERY little value relative to the resources and amount of labor it consumes. A ten-million-dollar yacht, as a point of comparison, might make the billionaire slightly less happy, but it would produce a lot more value per unit of labor used. And a one-million-dollar boat is even better still on this ratio.

Since people’s time and physical resources are finite, when they are used on one thing, they are necessarily not used on another. To take it to extremes in order to illustrate the point, a society that spends most of its resources and work hours on making luxury goods that produce just a modest benefit for only a small number of people (as with yachts) is far worse at supporting human values than one where labor, time, and resources produce widespread benefit, with a higher “unit of what humans value” produced per hour of labor. A society that spends its time and resources building public parks and quality roads is a better one for flourishing than one which focuses instead on building pyramids to bury kings (even if the laborers are paid the same amount in each case).

I’m not saying it’s unethical to spend money on things you enjoy (I don’t think it is unethical so long as you don’t harm others). But it’s interesting to consider that, for very large expenditures for enjoyment (like multi-hundred-million-dollar yacht purchases), the amount of labor and resources they consume relative to the value they create may be bad societally relative to other equally frivolous-seeming purchases.

Note: as some commenters pointed out, there is substantial value in buying a yacht in terms of redistribution of wealth – it’s usually better for the world that the wealth moves from the billionaire to the yacht crew, etc. That’s absolutely true, but it would also be true for most usages of the money spent by billionaires, and the points I’m getting at here (about usage of labor and resources) are separate and independent from redistribution effects.

This piece was first written on February 24, 2023, and first appeared on this site on April 30, 2023.

(a) a set of rules (explicit or implicit) that are made up by humans,

(b) a scoring system (explicit or implicit) for determining how players are doing or for deciding who wins,

(c) participants who are trying to increase their “score,” and

(d) a game context (outside of which the game rules stop applying).

So, by this definition, games include chess, poker, football, and tennis, but also things like:

• money games (e.g., competing with friends and acquaintances to have a more expensive-looking car/watch/suit)

• altruism games (e.g., billionaires outbidding each other in charity auctions)

• coolness games (e.g., choosing clothing to demonstrate that your taste is trend-setting rather than trend-following)

• intelligence games (e.g., Oscar Wilde verbally jousting with his friends)

• sexual games (e.g., a man trying to seduce a woman while maintaining plausible deniability and her playing hard to get despite her intense attraction to him)

• strength games (e.g., boys wrestling after school)

• legal games (e.g., lawyers using every tool they know to beat each other in a case)

• academic games (e.g., young academics trying to outcompete each other in terms of who can get the most papers published in the top 10 journals)

• knowledge games (e.g., two people debating a factual topic in front of others at a party, each trying to show that the other person is wrong)

• political games (e.g., trying to form a strong coalition and to make the opposing coalition look corrupt or incompetent)

• career games (e.g., optimizing your behavior for getting promoted, rather than, say, for accomplishing the purpose of your work role)

Our brains have a tendency to temporarily treat games as reality (a suspension of disbelief).

This is not a bad thing – it’s part of what makes games fun and motivating, and it gets us to try hard at them. Those that can’t or won’t do this suspension of disbelief tend to be bad at games. There’s little joy or motivation in games if we’re just thinking, “I’m moving this wooden peg, so this number goes up.” We must (at least temporarily) believe that the number MATTERS.

Games can be fun, rewarding, and motivating. For some people, game playing is one of life’s great joys. And games make learning more fun (in fact, games are fundamental to how we humans learn). Children invent and play many kinds of games that help them figure out adult behaviors. And gamification can make difficult activities feel easier (e.g., you can turn a difficult task into a game to make it more pleasant).

But, on the flip side, games also can become a big problem when we forget for too long that we’re playing a game. Or if we permanently swap them for reality. Or if we come to think that winning the game is what fundamentally matters.

Consider the way that game playing distorts different activities:

• Science gets really screwed up when it is treated as a game where we compete to publish, rather than being treated as a way to figure out the truth about reality. This is part of why science has so many false positives.

• Altruism gets really screwed up when it is treated like a game to prove you’re a good person rather than as a way to help others. This is part of why so much altruism is not effective at improving the world.

• Governments get really screwed up when politics becomes a game (where most of what matters is beating the other side) rather than treating politics as a way to get helpful policies implemented.

• Medical schools get really screwed up if they become a game of who can memorize the most and function the best without sleep, rather than being a means to train effective doctors.

• The startup world gets really screwed up when it becomes a game of who can raise the most capital or do the coolest sounding thing, rather than having a focus on making products that solve actual problems.

• News gets really screwed up when it becomes a game about who can get the most clicks rather than as a means to spread true information.

• Law gets really screwed up when it becomes a game about what companies and people can technically get away with, rather than as a means of enforcing agreements and protecting people.

Games can be small or large, great or terrible. The key thing is to not get stuck inside a game without realizing it. Sadly, many people spend their whole life stuck in a game, confusing it for something more.

Sometimes we have no choice but to play a game that we don’t value. But recognizing games for what they are can help us leave them when they are poorly aligned with what we actually care about.

It’s great to play games sometimes and to suspend your disbelief to make them more fun and motivating. But don’t forget for too long that you are suspending it.

Games are not reality, though they might have real-world consequences. The in-game scoring system (whatever it is) does not reflect what you truly, intrinsically value. The rules of the game are made up by humans and are not the fundamental constraints on what behaviors you can and can’t take (though there might be consequences for breaking the game rules).

Play games cognizantly.

This essay was first written on November 23, 2020, and first appeared on this site on June 23, 2022.

(1) People seem better at understanding what is good for them, as individuals, than regulators are at figuring out what those same people need, so I think personal freedom to do what you like should be the default position unless there is a good reason to deviate from it.

(2) I think it makes our society better, on average, when any person who is critical of government or authority can publicly state their criticism without fear of punishment by the state, since this type of personal freedom exerts a useful pressure on authorities not to go against what people want and need.

Limits on personal freedom (often part of conservative and authoritarian perspectives):

1) Some activities that people choose freely end up making both themselves and society more broadly, worse off (e.g., some highly addictive drugs or reckless behaviors that put others in danger), and so restricting these types of personal freedoms can improve society.

(2) Some types of communication can trigger widespread harm and fear, such as publicly inciting others to commit terrorism, and so I think restricting very specific types of communication can be societally beneficial.

Economic freedom (often part of conservative and libertarian perspectives):

(1) Most of the time, when people freely choose to engage in a trade, I think the total benefit to the two parties is greater than the total costs of the transaction so that economic freedom tends to be beneficial.

(2) On average technological development has made humans enormously better off, and I think economic freedom accelerates technological progress.

Limits on economic freedom (often part of liberal and authoritarian perspectives):

(1) Human welfare is not what capitalism optimizes for, and sometimes the two are even directly at odds (e.g., when companies lie to us about harms of their products, pollute the environment, convince us we are deficient unless we have what they offer, etc.), and so some restrictions on company activities are important to preserve human welfare.

(2) Some technological developments in the next 15-100 years may end up causing catastrophic problems for humanity if they aren’t approached with extreme caution (e.g., technologies for designing biological threats or advanced Artificial Intelligence), but unfettered capitalism tends to produce rapid production and arms races, the opposite of what is needed to reduce the chance of calamity.

Part 1: LEARNING HACKS

1. Crowdsource improvements to ideas: when you come up with a new idea or are mulling over a complex idea and still find yourself uncertain or confused about it, post to Facebook explaining the idea, and explain that you’re curious to hear what other people think about it, or whether they agree or disagree and why, or what their own theories about it are. Crowdsourcing the perspectives of others can be a fantastic way to improve your own understanding and to get suggestions for how an idea can be improved. You may have noticed that I use this method all the time! It’s been very valuable to me.

2. Audiobooks when bored: listen to audiobooks when you’re doing things you don’t enjoy that require little focus (e.g., simple cleaning, laundry, riding the subway, or in the backseat of a car). Note that some public libraries offer ways to access numerous audiobooks for free (e.g., the N.Y. public library has the Libby app / OverDrive program).

3. Learn to listen faster: When listening to non-fiction audiobooks (that you are reading primarily for information rather than entertainment), start at a listening speed that feels comprehensible but slightly challenging (i.e., where you catch everything said but ONLY when you focus), such as 1.25x or 1.5x speed. Once that starts to become easy to listen to, increase the speed a bit more, incrementally working your way up. With some practice, you likely can get comfortable listening at higher speeds. For example, for most non-fiction books, I prefer 2.5x. But keep in mind you may lose some retention at higher speeds (especially when you’re not used to it – it takes practice), and you’ll need slower speeds for especially complex books and when you’re in environments that are noisy or where the focus is more difficult, so in each case think about what speed gives you the best trade-off between time used and retention of the content. I don’t recommend speeding up books that you read for pleasure unless speeding them up causes you to enjoy that kind of book significantly more. I also would really recommend speeding up online lectures and informational videos if you find that they are usually slower than would be ideal for you (I usually prefer 1.5x-2x speed for online videos – the sound recording quality is generally not as high as for audiobooks making very fast listening difficult). YouTube actually now has speed adjustment built-in (look in the settings under the video), but you can also get plugins for most browsers that will allow you to speed up other video content (e.g., the Video Speed Controller plugin for Chrome which works on all HTML 5 videos).

4. Record good ideas: whenever you encounter an idea or concept or fact or framework or process you’d like to remember, or think of any interesting idea of your own, add it to a notepad on your computer. Or better yet, use our new, free tool ThoughtSaver, which is specifically designed for this purpose: ThoughtSaver.com (note that this is very, very much a beta product and a very much improved version we’ve been working on will be coming out pretty soon). I’ve been using this technique for a long time and have my own personal database on ThoughtSaver of well over a thousand ideas, which I think serves as a quite interesting and potentially powerful resource! ThoughtSaver also provides a special bookmarklet for your web browser that you can add to your browser toolbar so that you can quickly add ideas or facts that you read online immediately upon reading them, and it will put things in your database automatically. Another related thing I’d recommend (that I’d like to improve at myself): as soon as you finish a new book (or lecture or blog post), get in the habit of quickly recording the most important ideas that you think you learned from it. If you don’t do that, you’ll very likely forget most of it, so jotting those ideas down may make your learning dramatically more efficient! Here’s an article I wrote years ago about the remarkable learning inefficiencies in the standard approaches we have to read: http://bit.ly/2A9uPwp

Part 2: HEALTH HACKS

5. Make a healthy eating routine: eat the same food five days a week for breakfast and lunch (but probably not dinner), and carefully optimize those preset meals for long term health and other things you care about, like cost.

6. Make workouts enjoyable: if you don’t enjoy working out (as many people don’t), one of the best things you can do for your health is to find a way to make workouts enjoyable. For instance, for some people, this means joining a team sport, or taking workout classes, or finding a workout partner, or setting weekly goals for yourself that are challenging but attainable, or hiring a coach or trainer, or listening to great music while working out, or picking a more intellectually stimulating form of working out (e.g., jiu-jitsu). Personally, the technique that I find works amazingly well for making working out enjoyable is to limit certain things I enjoy to be done only when I’m working out (e.g., watching my favorite T.V. shows). If you don’t enjoy working out, your chance of skipping workouts or quitting altogether will be much higher. Once you find a way to genuinely enjoy it, creating a routine that you stick to for the long term will be dramatically easier.

Part 3: LIVING HACKS

7. Use phone alarms: when you have a meeting or event coming up, free yourself from having to check the time over and over by simply setting a phone alarm to go off an appropriate number of minutes before you have to leave or log in for it. Set the alarm to vibrate only or make it a tasteful and quiet sound (e.g., I like quiet chimes) so that if you’re already in a meeting when it goes off, people won’t even really notice it. This technique is useful for both work and social settings. It frees you to focus on what’s happening around you (e.g., what your friend or colleague is saying) rather than thinking about whether it’s time for you to leave yet. I prefer alarms to go off 10 minutes before phone calls (to give me an advanced warning – plus the snooze feature on iPhones will cause it to go offer almost 10 minutes later, which works perfectly). For meetings that I have to travel to, I like to set the alarm to go off 10 minutes before I would have to depart for the meeting.

8. Turn off notifications: while some notifications may be necessary for your job, turning off all other notifications can make you substantially less distracted throughout the day; more productive. Every time a notification pops up, it takes you out of what you were just doing, potentially forcing you to recollect your thoughts to get back into that work. For certain types of work that require a lot of contexts (stored in working memory), this can be especially problematic.

9. Reduce device addiction: my favorite way to do this is to use various plugins, which can directly take much of the addictiveness out of various apps and services. For email on your phone, consider having it only update every 30 minutes rather than in real-time (which saves battery, too). The cost of device addictiveness is high: while we could be doing things that are more meaningful or important, we instead spend far too much time checking our phones over and over! This is not your fault (devices and apps are designed to be addictive) but there is something you can do about it. I also recommend setting a policy for yourself of uninstalling any app that you find you can’t control your usage of due to such a high level of addictiveness (e.g., certain games). It’s just not worth constantly tempting yourself by having them installed.

10. Be the one to reach out: when you meet someone in a work context with business cards involved, take the cards of people you want to be in touch with (rather than just giving them yours) so that you can make sure follow up actually happens (rather than leaving it for the other person to remember). More generally, when you meet someone that you actually want to talk to again, be sure to get their contact info rather than only giving yours; that way, you can be in control of a follow-up occurring. Then actually follow up! For instance, send yourself an email immediately after talking to them to remind yourself who they are and why you want to reach out to them (you can take a photo of their business card too and attach it to the email so that you don’t have to carry it around).

11. Use pros and cons: if you’re making a major life decision, don’t just wing it. Make a carefully composed list of pros and cons. Better yet, also score them with how important each one is. The purpose of this is to help make sure you’re not missing anything important and to make it easy to recognize which are the critical considerations that you should be taking into account (and which you can safely ignore). At the end of the day, this doesn’t mean you should trust the output of the pros and cons analysis, but going through the exercise is likely to improve your intuition on what to do because you’re seeding it with all the relevant considerations (and reducing the chance you miss something important).

Part 4: MONEY HACKS

12. Use quick math for tips: When tipping in the U.S. at a restaurant, move the decimal point on your bill over to the left one digit, then double the value, which gets you to a 20% tip, then round or adjust down (to give a somewhat lower tip if desired). For instance: $23.60 becomes $2.36 when you move the decimal point over to the right, doubling that makes it $4.72, which is a 20% tip. If you want to give less than 20%, you can then just round or nudge this number down (e.g., $4.00 is a 17% tip).

13. Automate savings: decide how much of your income you’d like to save (for long-term use/retirement) each month. If the company you work at or your bank offers it, set up your accounts so that the correct percent automatically ends up in your long-term savings account so that you don’t even need to think about it. Because if you have to remember to do it each month, the chances are that you won’t stick closely to your long-term plan. Now don’t touch that long-term account (other to adjust what long-term investments it’s allocated to). You should seriously consider putting away at least some % of your income each month for longer-term use/retirement / emergencies, even if you’re young.

14. Get a credit card that pays: with a little bit of research, you can find a credit card that will give you 2% cashback on every purchase. If you tend to spend in certain categories (e.g., travel), you can find even better deals than this! If your credit card does not give you this much back (as the vast majority of them don’t), it may be worth investing a few hours in finding a card that does.

15. Make long-term investments: if all of your money is sitting in cash or in a savings or checking account, strongly consider putting some of it into low fee long term investments (e.g., an ETF or low fee mutual fund that tracks the U.S. or world stock markets). Note that such investments can decline dramatically in value (e.g., see historical stock market crashes), so you should only put money in such investments that would not be devastating to lose and that you plan to invest for the long term (e.g., ideally, you want to have a 5-15 year investment horizon). Historically broad low fee stock market investments have been a great investment in the long term (e.g., in nearly every 15 year period since its invention, the U.S. stock market has outperformed nearly every other major asset class). For instance, it has crushed bonds and real estate and gold, and currencies. Broad stock market indices have the appeal properly of basically allowing you to invest in the returns of “businesses in general.” Of course, nobody knows the future or whether future stock market returns will be as good as those in the past 100 years, but we can at least say that your checking account earning you approximately nothing is a good long-term investment. (Of course, what I’m saying here is not to be construed as professional investment advice, invest at your own risk.) For more about the stock market vs. other asset classes and more investment hacks in general, see our clearerthinking.org article on the topic: http://bit.ly/2zIwt8K

Part 5: HOME HACKS

16. Hang stuff: you can dramatically increase your space for storage by hanging stuff, for instance, using a door or wall hanging shoe holder in your closet (e.g., see: http://amzn.to/2BslSvK), or by putting up extra shelves in your kitchen or racks around the top of your closets.

17. Photograph then discard: when you get a document that might be useful (but having the original copy of the document is unnecessary), just take a photo of it, email it to yourself with an easily searchable subject line, and recycle or throw away the document. This will reduce clutter. The Dropbox app even has a “document scanner” mode which turns photos of receipts and things into pretty nice-looking PDFs (many other apps for this purpose exist as well, but you may already have Dropbox installed, and it provides convenient cloud storage for these PDFs). You can even do this with objects/trinkets/mementos that have some nostalgia but which you don’t really want to clutter your house with (you can keep the photos of these in a special folder of “memories”). Here’s one of my articles with many more decluttering and organizing techniques: http://bit.ly/2BhHYAe

Part 6: TIME HACKS

18. Practice phone typing: people spend a lot of time typing on their phones, yet people’s phone typing speeds tend to be extremely low. So it may be worth intentionally practicing faster phone typing (while using good form, e.g., I prefer the phone in vertical mode with one thumb on each side, each thumb covering half of the keyboard). There are plenty of typing practice apps and games on the app stores to help you improve your accuracy and speed, and some are even slightly fun.

Typing on computers is really quite a different skill than phone typing, so it only partially carries over. It’s also useful to learn to rely heavily on your phone’s autocomplete feature (for instance, remembering that you don’t need to get every letter right and just continuing forward, knowing it will correct most of your mistakes automatically). Another speed trick on iPhone is to hit the space bar twice at the end of a sentence instead of hitting the period key. While you’re at it, if you’re not a fast typist on a computer, strongly consider getting some typing practice software and learning proper typing form. Better typing (on both computer and phone) has potential benefits beyond just speed: it may help prevent repetitive strain injury (RSI) in the long term (since good typing form helps minimize motion). For more about the highly prevalent danger of RSI, see my article on dangers we should probably be more worried about http://bit.ly/2AaFTsG

19. Cleaning help: if you can afford to have your cleaning and laundry done by someone else (e.g., $15-$35 per hour in the U.S. depending who you hire or whether you use a cleaning company), and you don’t enjoy those activities, and the idea of it doesn’t weird you out, you should strongly consider hiring someone to do them for you on a repeating schedule (e.g., once every 1-3 weeks). Obviously, if you can’t afford this, then don’t do it, but if you do have the money, then I think this is some of the lowest hanging fruit in terms of freeing up time for doing things that are more important to you. You can use our clearerthinking.org “value of your time” calculator to figure out the dollar value that saving an hour of your time is worth to you, and hence at what price getting cleaning help might be worth it: http://bit.ly/2smheJX

20. Write any time: if you enjoy writing (e.g., blog posts, essays, or stories) but don’t seem to find enough time to do it, keep a note file on your phone with an ongoing draft, and whenever you’re waiting for something (e.g., the train, a late friend) pop it open and continue whatever writing you’re working on. For iPhone, I highly recommend the built-in Notes app for this since it will sync with your computer too automatically (just create a new category under iCloud in Notes for all your in-progress writing – I have more than 20 pieces of writing in progress at the moment on Notes, which is way, way too many). For long pieces of writing, keep each section or chapter in a separate note to make it easier to edit just the part you were working on. I’ve come to find writing more meaningful than reading even, so I’ve increasingly been converting reading time into writing time. Keeping all my in-progress writing on my phone in Notes has made this a lot easier.

To figure out how much we value our time we can ask ourselves simple questions, such as, “How much would I have to get paid to be willing to do an hour of work now?” The answer we give will not always be the same from day-to-day, or even from hour to hour. On vacation we might be in a mindset where we find work more unappealing, and so might require a higher pay. On the other hand, in times when we are strapped for cash, we might be willing to accept less pay. Our required monetary reward will also depend on how pleasurable or displeasurable we expect the work to be. And if we’ve just been working for five hours, we might require more pay for the next hour than we did for each of the last five.

Let’s consider how we might actually apply this concept of placing a monetary value on our time. Suppose that a store is giving out free mugs, but to get one, you have to wait for 10 minutes in line. Ask yourself, “How much money would a person have to pay me now to wait for ten minutes in that line on his behalf?” Suppose that you decide that you’d be willing to do this waiting for no less than $5. That means that if someone said they would pay you only $4.95 to stand in line for them, you’d turn down the offer. Now, ask yourself, “In the future, would I rather have $5 or one of these mugs they are handing out?” Or, similarly, try “Would I be willing to spend $5 now to buy one of these mugs?” If the answer is that you’d prefer to have $5 than a mug then it probably doesn’t make sense to wait in the line. In this case, you are assigning that 10 minutes of time waiting in line a value equivalent to $5, but the mug is worth less than that dollar amount to you. Put another way, you would be willing to wait in that line for $5, but if you did so, you wouldn’t actually want to buy the mug with the $5 you earned! It is reasonable therefore to think of the waiting in line as being more costly for you than the mug is valuable to you. On the other hand, if you’d rather have the mug than the $5, in that case it likely would make sense to wait in the line.

Incidentally, it may be important to frame the question as “Would I spend $5 to buy that mug if I could?” rather than “Would I sell that mug for $5 if I already had it?” The problem with the latter is that research has shown that we tend to be biased to prefer items that we currently possess to ones that we don’t yet have. So, if imagining owning the mug is enough to trigger this bias, the latter question could lead to distorted answers.

This technique of placing a monetary value on our time is particularly useful in situations where something is being offered for free, since people often sacrifice an unreasonably large amount to receive free items. Perhaps genuine pleasure is created just from knowing that you got something for free, which helps compensate for such sacrifices. But nonetheless, one should be cautious about overacting to the word “free”, which can certainly snag us with its large psychological appeal.

To consider another example, suppose that you’re trying to decide whether you should drive an extra 15 minutes each way to go to the cheaper grocery store rather than the pricier one (we’ll assume, in this case, that the two stores have equally good products). The question to then ask yourself is, “How much would I have to be paid to drive for a total of 30 minutes on someone else’s behalf?” If the answer is $10, then ask yourself, “How much do I expect to save by going to the cheap store?” If the answer is more than $10, then it probably makes sense to drive the extra distance. If the answer is less than $10, it probably doesn’t make sense.

Our brains are not necessarily going to make sensible decisions unless we explicitly reason using this process. For instance, one study showed that people said they were willing to drive a certain extra distance to save a small amount of money on small purchases, but not on large purchases, even when the dollar amount saved was equivalent in the two cases. If being paid $10 is worth 30 extra minutes of driving to you, it should be worth it to drive that 30 extra minutes to save $10 whether you are then going to be spending $20 or $20,000 at your destination.

When you are making a decision involving sacrificing your time, it can be well worth it to ask yourself, “How much would someone have to pay me to use my time in this way?” Then, ask yourself, “How much would I be willing to pay to be given what my sacrifice of time is getting me?” If the former is bigger than the latter, you should seriously consider not using your time in that manner.