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Living Off the Smell of an Oily Rag is a website that gives free access to all sorts of practical tips for minimising waste and living cheaply. Updates are available via email, you can contribute tips, and books are available. The site is listed on my links page, and you can access that links page via the sidebar.
Why do I think that this site is worth a mention? I believe that it’s worth a mention because an essential part of economics (personal and otherwise) is wise use of the resources that you have. Here’s a couple of examples that illustrate what I’m talking about:
If I’m throwing out a shirt I’ll cut off the buttons and put them in my sewing box. Those buttons are a resource that I have and if I throw them away it’s an unwise use of that resource (also, cotton shirts make great rags so they go into my rag bag).
Buying house-brand cheese when it’s cheaper than the same thing with a big-name brand on it. If you buy big-name cheese that costs $2 more you’re wasting a resource, i.e. the two dollars.
But wait, it gets worse: people think of “wasting money”, but in fact “wasting money” is actually “wasting your life”. Let’s have another look at the cheese example: by spending $2 unnecessarily you’ve also wasted a chunk of your life, i.e. the time it took to earn those two dollars.
How much of your life have you thrown away by buying big-name cheese? Your true tax rate is 45%, so if you earn $20/hour then it takes you eleven minutes to acquire two after-tax dollars*. So, by buying big-name cheese you’ve wasted eleven minutes of your life, and time is one resource that you can’t get more of.
You might say “I’ll get more money to replace what I’ve wasted”, but that is impossible. When you work you convert one resource (time) into another resource (cash), and you can’t get more time, therefore it is impossible for you to replace what you’ve wasted. To put it another way, once you’ve converted your time into cash that cash is as irreplaceable as the time. This is your take-home message: you can only spend each minute once, therefore you can only spend each dollar once.
If you want to give eleven minutes of your life to the company that makes big-name cheese you’re free to do so. Personally, I prefer to avoid wasting my life .
• Please share your stories about your attempts to save money/avoid wasting your life – the funnier the better.
• Click here for a biblical perspective on the points that I have raised in this post.
• Consider this: with a true tax rate of 45% the state has taken at gunpoint a huge chunk of your life. If you work for 40 hours per week then you are enslaved for 18 hours per week. 45 working years x 52 weeks x 18 hours = 42,120 hours or 4.8 years (4 years, 9 months and 24 days). You can look at this in two ways: (1) that’s almost 5 years where you are enslaved by the state for 24 hours a day, 7 days a week, 365 days a year, or (2) that’s 20 work-years where you are enslaved by the state.
* The state takes 44.6% of GDP (Gross Domestic Product) (source). I know that buying cheese involves GST and therefore the two dollars aren’t entirely post-tax dollars, but I’m operating on the KISS principle here. Secondary taxation such as hospital parking fees and other hidden costs of governmental interference in daily life will probably even things out anyway.