$100 to Spend, or a Day of Retirement? Think in Days, Not Dollars, to Speed Your Progress

I’m a huge believer that achieving early retirement or financial independence doesn’t require going to extreme lengths. I think if lattes truly bring you joy, if they’re the best part of your day, then go ahead and drop that $4 at Starbucks every morning. If dining at exquisite haute cuisine restaurants is what lets your heart sing, then keep room in your budget for the occasional meal splurge. If we save so much so quickly that we subtract all the joy from our lives, what is financial independence really worth? Wouldn’t we rather all arrive at our destination in good spirits, having lived a worthwhile life in the meantime?

There will always be people like my friend Liz, Mrs. Frugalwoods, who derive joy from frugality itself. (Even she makes room for the occasional luxury, though.) But that doesn’t mean you have to derive your joy the same way to be able to do something similar.

What matters is less what you spend your money on, and more that you have a clear understanding of the value of your money — either to provide joy today or to provide for your long-term security. 

So that’s what we’re tackling today: how to make sure that you have a clear grasp on your money’s value, the price of your future life, and the trade-off that every expenditure or savings deposit represents.

My Dollar Value Wake-Up Call

Has anyone else had this experience, or being super aware of the price of everything while growing up, or early in your career when you’re earning very little, but then over time, as your income increases, realizing that you’ve lost touch with the price of something in particular? For me, it was a gallon of gas. In high school, I knew the price within pennies. I didn’t drive in college or for the first couple years of my career. But then when I bought my trusty 2004 Honda Civic (which we still drive and love), I knew the price of gas again for a few years. Until one day, my dad asked what gas cost in our area. And I realized, I have no idea. I mean, I had some idea, like maybe it was $3-something? But that question rattled me, and made me realize, I am disconnected from the value of my money.

I’d love to say that that gas price wake-up call was what kicked off my financial journey, but that was after I’d already paid off my debt and started to save in a more concerted way. I thought I was evolved on money, and maybe even a little part of me thought it was a sign that I’d arrived that I could fill up my tank without even thinking about the price.

Whether or not you’ve ever actually lost touch with the price of something, the almost inevitable nature of lifestyle inflation in the absence of any conscious checks on it shows that it’s all too easy to forget, one way or another, what a dollar is worth.

And that’s a problem if our goal involves anything other than spending all our money.

What Does a Day of Retirement Cost?

Have you ever done the math to calculate out what a day of your retired life will cost? A ballpark estimate is fine, and the simple version is to take your annual budget and divide by 365 so you account for everything. Ours is a little north of this figure, given the high cost of living in our mountain town (it’s the non-spending culture that makes it cheaper for us than the city we left, not the actual cost of things, which is still absurdly high), but let’s just pick a number that’s close enough: $100.

For $100, we can live a full day of retirement and not be reliant on a job or an earned income.

The number itself is less important than what it does for you: It assigns a value trade-off to every expenditure you might choose to make. 

Put another way: It creates a direct equivalence between your money and your time.

Without knowing that price tag for a day of the life you’d rather be living, it’s hard to equate one spending decision with its potential future impact. But with a price assigned, the choice you’re making is much clearer.

Putting Spending in Context of the Time It Represents

In the foundational financial independence text Your Money or Your Life, Vicki Robin talks about money as a representation of our life force, and asks us to think of every dollar we possess in terms of the hours of our life it took to earn it. But I’d like to propose something slightly different:

Instead of thinking of a dollar as how long it took you to earn it, think about it as how much time it can buy back in the future. 

So while I might earn multiple hundreds of dollars a day currently, making a $100 gizmo worth a small fraction of a day and easy to justify spending on, what I’m actually trading to possess it is a full day of retirement. Making that shift from equating money with the time it buys back, not the time it took to earn, gives us an incredibly powerful, motivating measurement against which to judge all possible purchases.

Now when that thing you’d wanted to buy goes on sale for $100, you have an apples-to-apples comparison. Do I want this thing, or would I rather save the money and buy a day or retirement (or one day less of work)? 

While the $4-a-day latte habit might itself not seem like a big deal in the scheme of things, especially if you’re a high earner, when you know the price of a day without work, you have a much easier, value-based decision to make: Would I rather have my beloved daily latte this month, or an extra day of retirement? 

And those restaurant splurges? Same deal. Which is worth more? A life-changing meal at a noteworthy restaurant, or a day or two or three of living on your own terms? Apply the same thinking to whatever it is that especially brings you joy.

Thinking in Days, Not Dollars

Ever since we put our early retirement plan together, I’ve been following this approach, using $100 as my close-enough number to decide what expenditures are worth it, and shifting my pricing to think in days instead of money. That art class sounds cool, but it’s not worth a day. Pass. Those new hiking boots look super comfy, but worth two days? I think not. 

This value assignment isn’t just a way to say no to spending, though. It’s about making it as easy as possible to be crystal clear about what you truly value and to be ruthless about cutting what you don’t. 

Thinking in days instead of dollars helps me make peace with big ticket purchases, too. The new cell phone I’ll need to buy before work takes away my iPhone? That’ll cost me three or four days, but that’s worth it to me because I use my phone for so many different things that I’ll keep doing after we leave our careers. The standing desk that I spent three days on? One hundred percent worth it for the improvement in my back and hip pain already. And just today we happily dropped 10 days on ski passes for this coming season, because we’d see no point in retiring early if we couldn’t ski all the time. (Our first midweek passes ever! Sayonara, weekend crowds!)

Plenty of things are worth trading days for, but the vast majority of potential purchase are not. 

As always, what matters most is what makes your life better and lets you enjoy yourself both on the journey and after you’ve reached your destination. And only you can assign that value for yourself.

Let’s Talk Dollars and Days!

Got a lost-track-of-the-value-of-a-dollar story you care to share with all of us here? I won’t judge you. ;-) (Don’t even ask me the price of so many things — I have no idea!) Any revelations about the cost of a day of retirement and what that equals in your spending? Any other tricks you have for equating a possible purchase to something concrete that keeps you motivated and accountable to your goals? Have you given yourself permission to splurge on anything lately because you wanted to add value to your life today and not wait until retirement? Let’s dig into all this meaty stuff in the comments!