from: https://thehappyphilosopher.com/how-understanding-the-marginal-utility-of-money-will-make-you-happier/

…. Frugality gets a bad rap, because people associate it with cheapness, but really it is maximizing value. Frugality is finding the sweet part of the money/value curve and spending no more than necessary for contentment. Frugality is the deep understanding of this trade. It is spending on the things that matter most to you. Frugality 2.0 is the understanding of how time relates to this trade.

Most people will not believe me and seek to maximize their earning and spending, and if this is you I wish you a long and happy life. But for the rest of us, how can we apply this principal to bring us happiness?

I’ve developed a simple process that is not new (although it may be new to you). It is not complicated.

1. Figure out how much money you need to fulfill your basic needs: food, shelter, transportation, etc.
2. Think deeply about what in life brings you happiness (not pleasure, but happiness) and how much money above what is needed for basics you need to provide for this. This will take time and tinkering and will change over time, as what makes you happy will change as you evolve.
3. Cut out all spending from your life that does not bring you joy. Examine everything you spend money on and ruthlessly eliminate or downgrade. Optimize everything that is left over.
4. Use the saved money to buy your freedom.
5. Use your freedom to do the work you love, or do less of the work you hate.
6. If you are still working reassess and see if the trade makes sense, if not go back to step 1 and repeat until satisfied.
7. If you don’t have enough money to get past step 1 you need to figure out how to make more money.

It’s really pretty simple when you strip away all the distractions. Stop trading your limited time for a few fleeting luxuries and pleasures OR make sure when you trade your time that the trade brings joy in and of itself.

Learn when enough is enough and the trade doesn’t make sense any more. This will happen earlier than you think.

When people are on their death bed no one says ‘I wish I would have driven a nicer car’ or ‘I wish I would have worked harder for the company’. They regret how they spent their time or managed their relationships. They wish they hadn’t spent so much time being angry or worried.

Understand that frugality is not cheapness, and it is not inexpensive. You are buying something. You are buying freedom.

You are trading short term pleasure for freedom, with the expectation that freedom will bring you happiness, or at least the ability to pursue it on your own terms.

Once you frame this concept correctly in your mind, frugality does not seem like deprivation. In fact, just the opposite, it feels like abundance. It allows you to savor what truly matters and what is truly limited – your time.

*Our educational system does not, cannot, and will not teach us this lesson. We are taught to be employees and consumers, work until our 60’s, and save very little. We are not taught what money is or what it represents – time. It is up to you to learn it, and if you have children it is up to you to teach them about it.

**This is actually changing constantly because our behaviors and risk factors and luck will determine probabilistically the time of our death. The overall trend is towards time being more valuable and scarce though.