Published on April 20, 2025 6:40 PM GMT
The Effective Altruism community has encouraged a range of differentapproaches to doing good over time. Initially there was more focus onfrugalityas a way to increase how much you could donate, which was mostlysupplanted by emphasis on earning more. In late 2015 this started toshift towards doingthings that are directly useful, which accelerated in2021. Then the market fell in2022, FTX turned out tobe a fraud, and there haven't been new donors near the scale of Open Phil / Good Ventures. Among manychanges, people are thinking more about frugality again: the lessyou can live on, the more you can stretch a given amount offunding. [1]
To encourage myself to live more frugally and to give an example ofwhat I thought was a pretty fulfilling life at relatively low cost forthe US, I used to calculate numbers for how much we spent onourselves. This included housing, food, transportation, medical, etcbut not donations, taxes, or savings. At one point there were somenewsstoriescomparing our spending to our income, and it was nice to have a simplenumber to point at.
I was thinking it might be nice to start calculating these numbersagain, but when I looked back at why I stopped it's mostly that it'sactually a pretty tricky accounting question and I'm not sure thereare ways to draw the lines that make much sense. For example:
One of the main things I do for fun is play music. This costssome money (instruments,kids coming withme to gigs, fun things whiletraveling) and also earns some money. How should I account forthis? At one extreme I could say that income is income and expensesare "spending on ourselves", but this doesn't match reality well:there shouldn't be a difference between playing a dance weekend thatis $1,000 with reimbursed travel and one that's $1,500 but I need tospend $500 on flights. At the other extreme I could look at the wholeactivity on net, and subtract expenses from income, but should what'sessentially a family vacation tacked onto a gig really not be"spending on ourselves"? In between I could count this the way theIRS does (an approach I think is a good fit for determining incomefor pledging purposes) but this is also not great. For example, someportion of mynew keyboard should probably be "spending on ourselves" since Iwas motivated in part by a desire to enjoy playing a nicer instrumentand have less hassle in gig packing. And in the other direction, if Ipay $200 in childcare to take a $125 gig the IRS doesn't count thechildcare against income at all but I think $75 would be closer towhat most people would consider "spending on ourselves".
When I last calculated these I didn't include expenses paid byour employers: as someone earning to give my employer gave us muchnicer health insurance (and meals, and working conditions) than wewould have bought for ourselves, and at least that excess portiondoesn't seem like it's "spending on ourselves". Now that I'm doingdirectly valuable work and my frugality is more driven by a desireto extendrunway for my project, however, if my employer is paying a lot formy health insurance that affects runway same as any other expense.
I would live in Boston regardless, but ifsomeone who would otherwise work remotely in a low cost of living areadecided their highest-impact option was to move here to work at the NAO I wouldn't want to count atleast some portion of their increased living expenses. Similarly, ifit made sense for use to move to the Bay Area (please no) for our workI'm not sure how I would want to count the increased housing (andother) costs.
If things started going poorly with childcare or school and oneof us went downto part time, perhaps this is part time childcare paid in kind,imputingboth income and expense? But you get weird results either way: if youdon't do this foregone childcare means "spending on ourselves" goesdown in a somewhat misleading way, while if you count all thetime we spend taking care of the kids as implied income+expenseyou get very large numbers. And in between I don't really see aprincipled reason to count this only for the delta between a normalwork week and the reduced hours.
I think part of why this doesn't feel very coherent is I'm trying toget "spending on ourselves" to do too much. It can't be both whatpeople naturally understand the term to be (even ignoring that thisisn't all that consistent) while also a good number to optimize formaximizing altruistic impact.
So I don't think I'm going to try to go back to calculating a numberhere, and instead I'll stick with sharing spendingupdates every couple years.
[1] Prompted by some observations a friend recently posted, but notlinking since it was friends-only.
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