Don’t scale up your lifestyle
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The simplest way to have more impact across your entire lifespan is to scale up your earnings, but don’t scale up your lifestyle.
This is an “earn to give” strategy, so it should apply to nearly every EA. Even if you are working for an effective cause at an effective organization, you should be earning a living wage that includes enough headroom to tithe. (If you’re not, I’m sure folks at the Centre for Effective Altruism would love to hear from you.)
My mom’s parents grew up during the Great Depression, and that scarcity mindset heavily influenced my household growing up. I could never understand the 40% food waste statistic; ours was as close to zero as you can get without contracting a foodborne illness.
We never bought clothing at full retail. They were always on sale, and usually from the clearance racks. I am instinctively drawn to the basements and back corners of stores where they keep the markdowns. I’ve bought the majority of clothing and household items from Ross and TJ Maxx over my lifetime ( B&M and TK Maxx for the international folks). I also wore a lot of my older brother’s hand-me-downs. I still buy a lot of things on sale from eBay, Amazon Resale, and even Meh.
Every car I ever owned was small, inexpensive, reliable (no costly repairs), and fuel-efficient—Toyota Corolla, Honda Civic, Subaru Forester, and now a used Tesla 3.
All of this while my salary went from $50k USD in 1995 up to >$250k when I retired from the tech industry. So while my income and take-home continued to climb, my expenses rose at a much more modest rate. With the extra money, I started tithing to effective causes mid-career (incentivized by a generous ~$10k corporate match) and invested a large percentage of it in stock and bond index funds.
This can be taken too far; Scrupulosity is the term often used in EA to describe this. And I took it too far at times, too. I lived in a dilapidated[1] 1-bedroom in-law cottage for 7 years, primarily because the rent was so incredibly cheap while I worked for a nonprofit at a reduced salary. Even though I was saving over $20k USD per year, I wouldn’t make that choice today.
If you consider your entire contributions to effective causes over your lifetime, you can make even more impact if you choose not to scale up your lifestyle as your income increases. You can use those additional resources to invest and donate, or even work on a cause you care about later in life without needing to worry about generating income (aka financial independence —FI; See @Rebecca Herbst’s Yield and Spread for more on FI in EA.)
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Two plug-in space heaters replaced the broken furnace in my 1-bedroom cottage, because the owner didn’t want to invest in fixing it. I nearly caught the place on fire one night when a t-shirt fell onto a parabolic radiant heater. I upgraded to safer oil-filled models after that. He razed the lot and built a brand new house and cottage after I moved out.
Love this SO much. I agree with this mindset completely, and I think that enormous consumption reductions compared to the average Jo(sephine) can be made at very little cost to efficiency and life satisfaction, like you’ve stated. I agree it can be taken too far, but I think very few people do and its easier to course correct up a little in consumption than have to go back down.
Respect.
One thing I’ve found for myself: it is easy to think of lifestyle changes across the board, but different areas have very different impacts on your budget. Opting for the slightly nicer apartment may end up costing way more than switching to the fancy vegan yogurt. Insofar as lifestyle creep is reasonable (it is probably healthy to be increasing your quality of life a bit over time), it is better to focus on the little things than the big ones.
Completely agree! We get used to changes in our lifestyle so fast. Our brain tends to take a ton of stuff for granted.
I know that if I buy a large apartment or a fancy car, I’ll get used to it in a few weeks. So why bother ? Donating it seems the right choice.
For some, spending can be a soothing activity, but being a shopaholic is harmful, like many other addictions. The hole most people are trying to fill with any addiction: a lack of strong, close, healthy relationships. You must have at least one relationship (and ideally 3–5 according to Dunbar) where you can regularly be vulnerable and talk about all your feelings. If you don’t, work on that 😇 You can start with therapy or a support group to help you build up your skills. That’s what I did, since I didn’t learn this in my family of origin.
How much you spend is obviously so personal, but I think “figuring out” how much to spend swings along a pendulum. If you spend time cutting out unnecessary costs, the pendulum swings left. If you spend time leaning into spending more on things you love, the pendulum swings right. It may take time to figure out what’s useless and what’s useful. Like you, I was bred into a family with a scarcity mindset (Holocaust Survivors). It was easier for me to keep costs low than to spend on myself. This ultimately helped me in my finances. But I find it can be just as hard to release oneself from the grip’s of a scarcity mindset into an abundance mindset, as much as it can be for someone who has scaled up their lifestyle and needs to scale back. I find for the most part, people in the EA community seem to share the low-cost mindset more-so than those that overspend (perhaps that’s self selecting though based on the work I do!).
Thanks for the post, Dave. I agree.