How to make $100 worth a whole hell of a lot

Published October 26, 2016   Posted in How to Think

When you’re working full-time and bringing in $100,000 a year, a $100-spot probably doesn’t seem like all that much. Heck, it doesn’t even represent 1% of your income. You can easily drop $100 on a nice dinner these days. Or a new pair of kicks.

Pinterest: How to make $100 worth moreUs “professionals” spend $100 like it’s going out of style. Food. Clothes. Shoes. And why not? When you’re driving around in a new $42,000 Cadillac CTS, what’s $100? A pittance is what it is. A mere pittance to a person of your means. You’re bringing home the bacon. Makin’ 6-figures and driving around in pure luxury, your perception of value is shaped entirely by your cash flow.

And your cash flow is killing the value of what used to be a lot of money.

Remember when you were a kid? Struttin’ around with $100 instantly transformed you into the bombdiggity – not to mention the target of a good ass beating. It was a lot of money to someone who probably didn’t have much of it. You don’t pay for food. No rent. You probably don’t even buy your own underwear. I never paid a cent for my whitey tighties as a kid.

TheΒ tl;drΒ version

If you’re too lazy to read, or my writing is that bad, here’s the “Too long; Didn’t read” version: If you want $100 to be worth more, stop spending so damn much.

The longer, more wordy version

Little to no income and little to no expenses – Instantly, $100 becomes worth much, much more.

Why? Simple: Money is all relative, isn’t it?

To those who drop $80,000 a year living the life “they deserve”, a crisp Ben Franklin probably doesn’t impress. This is pure economics. The more we spend, the less each dollar is worth to us.

Ever hear the expression “I wipe my ass with hundred dollar bills!”? Setting aside the obvious risk of blindingly painful paper cuts in places that you definitely don’t want them, this expression is [truthfully] uttered by those who earn and spend more money than most of us will ever see in a lifetime.

To them, $100 is practically worthless. But, earning $100 isn’t all that tough. A day’s work doing manual labor can bring in a hundred bucks. Even working minimum wage, it doesn’t take long.

I never want to get to a place in life where my sense of worth is so warped that $100 becomes meaningless. If that ever happens, I know that I’m doing something very wrong. And I deserve to be slapped across the face. Why?

Because when $100 is nothing, everything in life becomes more expensive. And if the shit does hit the proverbial fan in early retirement, it takes that much more effort to climb out of the financial hole of which we willingly dug.

Keep the value of $100 high

A $100 dollar billHere’s the truth: As an early retiree, we want $100 to be worth quite a bit of money, and for two good reasons:

1. We will be less likely to spend it – If we feel that $100 is a decent chunk of change, we will be more cautious before spending that amount of money. The more cautious we are, the less we spend; and, the lower our yearly expenses, the greater the likelihood of enjoying decade after decade of jobless bliss. This equation is remarkably dependable!

2. We can easily earn $100 doing odd jobs – Since $100 is fairly easy to earn, we get to the point where we put in a day’s work in exchange for a value that represents “a good chunk of change”. Imagine working only a single day and getting paid 5% of your monthly expenses. 5% in a single day.

If your monthly expenses were $2,000, a hundred dollar bill is a measurable portion of your budget (5%). Spend more than $6600 a month ($80,000 a year), however, and that same $100 is only 1.5% of your monthly budget – a mere fraction. It takes more than $330 to cover 5% when spending 80-grand annually. That amounts to days of working odd jobs after retirement – for just 5%.

The key is simple: Keep the value of $100 high by spending less money. The less you spend, the more that $100 will mean to your life, and the less effort it will take to cover your expenses.

Make the economist in you happy. Remember, this isn’t about “being poor”; rather, it’s about keeping your expenses as low as possible. Most of us want maximum benefit with minimum output…or in other words, lots of happiness without a lot of effort.

Controlled spending is the solution!

Have you ever caught yourself diminishing the value of $100 because you earned and spent like a drunken sailor? If so, what’s your best story of your not-so-frugal escapades?

We track our net worth using Personal Capital


55 responses to “How to make $100 worth a whole hell of a lot”

  1. Ultimately money is just a store of value. Thus the Value of 100 dollars is ever changing due to inflation as well as your perception of it. That being said your right, if you let lifestyle inflation get out of hand your perception will start seeing 100 dollars as nothing, that’s when you’ll start to have spending problems. A hundred here, a hundred there pretty soon we’re talking about real money (SIC).

    I’ve seen some other ideas to escape the trap. One I mention in my post from today, opportunity cost. Remember what spending of 100 dollars costs you both now and in retirement. Anyway great post Steve.

    • Steve says:

      Yes, “value” is an incredibly important element of life because, like you said, it’s different for each and every one of us. And the opportunity cost angle is a good one and definitely worthy of mentioning. Spending $100 is one thing, but *not having that $100* for something far more important is quite another! πŸ™‚

  2. My spending is low and we’ve only let modest amounts of lifestyle inflation creep in while our careers and incomes have advanced. That said, $100 relative to what we are making now is what $20 was when starting out. But for me, it still seems like a lot and I can’t come to grips with making it rain when I find an awesome new pair of shoes or at a fancy dinner with my wife. I’m sure it will stay that when, it is the frugal-side of me, but if the day comes where $100 doesn’t mean anything to me than that means my investments are making so much money that I don’t know what to do with it all…so I welcome it!

    • Steve says:

      I like where your mind is at, Green Swan! If $100 seems like chump change because of how much net worth you’ve amassed, THAT is definitely a good problem to have. I’d welcome that as well!

  3. I am always amazed at how much money people blow without thinking about it. I am one of those “professionals” with co-workers who don’t think much of 100 bucks. I, for one, grew up with very little and I have kept my expenses very low – especially since we didn’t buy that McMansion a year or so ago. My income has only increased and I love creating a gap between income and expenses. The money inside the gap gets invested! Woot! I can’t imagine $100 will ever be meaningless to me. In fact, I still think a 20 spot is a lot of money πŸ™‚

    • Steve says:

      If I ever find a $20 laying on the street, I’m genuinely giddy to have found it. A buck? Okay, probably less giddy, but money is money. It’s all value that can be used towards your own happiness…provided that you know what makes you happy, that is. Most of us in the PF community know that answer, thankfully. πŸ™‚

  4. Anything to avoid using a $100 as toilet paper, especially a new, crisp, sharp edged one.

  5. This is a great example of how money is relative. And thinking of $100 as something very tangible – a meaningful portion of your income, is a great way to keep yourself grounded. I know when I was working in big law, a lot of the lawyers didn’t think of $100 as much. It really didn’t represent much of our income. But if you’re spending tons of money each month, of course it doesn’t represent much. The value of something really depends on if you want to put value into it. And $100 should be thought of as a lot of money.

    • Steve says:

      Thanks Financial Panther. You’re right, it is all relative. And the best part is WE can control those “relative” qualities in our life to a very large degree. Thus, if we WANT that $100 to seem like much more, we generally can. πŸ™‚

  6. Arrgo says:

    This is something I have thought about myself. $100 spent wisely can really go along way. Fill up the car with gas, groceries, home supplies, and even a 6 pack of microbrew. I even think about the same thing with $20. If people would be more conscious and focus on their true spending, I bet they could get a lot more mileage out of $100 or even $20.

    • Steve says:

      I think you’re right, Arrgo. A more conscious thought process regarding any money spent is certainly a step in the right direction. Once we understand VALUE and what it means to our lives, we can begin realizing more and more from every dollar that we spend.

  7. I wish I could say I’ve never blown $100 on something stupid, but I can’t. A few times here and there, I’ve spent that kind of money foolishly: meals out that I didn’t really need, new shoes whose only purpose was to impress others at the office, etc.

    I think you’re absolutely correct that controlled spending is the solution. If you can’t be mindful of even “smaller” spending (like $100), it’s awfully tough to be wise with bigger purchases.

    • Steve says:

      You and me both, FinanceSuperhero. I’ve blown through $100s like they were nothing. It’s sad to think about all the money that I’ve wasted, but hey, you live and learn I guess. All is well in my wallet now!

  8. Maarten says:

    Pre-retirement I probably made 8 of those a day but by immediately taking those of the table and investing them I didn’t consider them spendable. It did cross my mind some days that I could buy a new iPad every day (should they speed up their release cycle). Now that we’re retired and live on a limited budget I can’t bring myself to waste (which is what that was) anymore.

    I was recently at a casino and felt terrible for gambling away a full $40. Perspectives do change.

    • Steve says:

      Ha! I’ve had that same thought about gambling, too. I just can’t seem to enjoy myself even if I’m losing a small amount of money (less than $50). If I’m out $100, then I’m really looking for the door at that point. πŸ˜‰

  9. TJ says:

    A lot of my not-so-frugal escapades would be when I signed up for charity 5k’s but got lazy and didn’t even show up. At least a portion of it went to charity, I guess.

    I also agree with maximum benefit with minimum output philosophy, and I would apply that logic across my entire lief, not just money decisions. I am admittedly on the lazy side, though.

    • Steve says:

      I feel your pain, TJ – I too skirt the line between being economical and just plain lazy. I certainly go full throttle with things that I care about, but especially with work items that I don’t particularly enjoy, I definitely try to squeeze out as much as possible while putting in…well, only as much effort as I absolutely need. That may or may not be a good thing. πŸ™‚

  10. Great post!
    And the worst part is: $100 doesn’t even go very far anymore. Try to go out with two people for dinner and drinks in a big metro area. That cost went to triple-digit-plus long time ago! So, we stopped doing the clubbing/dining thing a long time ago and reserve that for birthdays and anniversaries. Maybe it’s age, maybe it’s frugality.
    On the flip-side, and that’s the good news, $100 will become easier to make with side hustles.
    Start cherishing your Benjamins, everybody!

    • Steve says:

      Thanks for your comment! I hear you about the general cost of living in a metro area. Like you, we don’t do ANY clubbing, and the only dinners we do are to places like Chipotle or local Mexican / Thai restaurants that we like. And yup, cherish those Benjamins!

  11. When we had a household income measured in solid six-figures, dropping $100 on something wasn’t a big deal at all. In fact, neither was dropping $20k on a trip to Europe. But now that we’re early-retired (mid-40s) we have a VERY different perspective on things! If we let $100 leak here and there, we know that we’ll run out of money… we need to be very purposeful with our spending and follow our budget strictly. If we do… we can do what we want instead of “what we have to do” to maintain a lifestyle.

    • Steve says:

      Wow, $20k on a European vacation? I bet those are memories that will last a lifetime, but yeah, frugality is key to make your wealth last in early retirement. I guess with any big expense, we must ask ourselves if it is worth putting ourselves in the position of potential weakness, especially if it’s not emergency spending on something that you couldn’t control! πŸ™‚

  12. Andrew says:

    More recently when I started making money from side hustles I began to appreciate the value of money more because I was spending some of my free time working.

    When you’re working for someone else and earning a salary, it is kind of hard to really appreciate the money because it comes in every two weeks at the same time like clockwork.

    I’m always amazed at how some people blow away money on things that don’t provide lasting value….like expensive cars or regular bar hopping tabs.

    • Steve says:

      “When you’re working for someone else and earning a salary, it is kind of hard to really appreciate the money because it comes in every two weeks at the same time like clockwork.” – that’s an excellent point, Andrew. The money will just keep coming in even if you don’t value what you’re doing. It definitely gets more real when you’re voluntarily putting in effort in your free time to build up something that you actually enjoy. It’s a great feeling.

  13. Mr. SSC says:

    I was just at the dr’s office and asked for a copy of my x-rays and they said, “Sure, we can put them on a cd for you, but it will be $10 cash.” I said, “Really?! No thanks.” Hahahaha

    I mentally just calculated the markup for a $0.50 cd and $0.0 for the time to mouse click, copy files, burn – eject… and thought, yeah, I’d rather have $10. πŸ™‚

    3 years ago though, maybe even 2 I’d have said, sure, here’s $10, because “it’s ONLY $10”. While it’s still ONLY $10, I’d rather spend it on something to bring me happiness rather than x-ray images that I won’t even look at (I was going to email them to my brother-in-law who is a radiologist).

    Mindful spending makes any amount worth more, even a mere $10.

    • Steve says:

      A CD? Really? Wow! I haven’t touched a CD is years, much less had my doctor or dentist offer up digital copies that way. Interesting. “Mindful spending makes any amount worth more, even a mere $10.” – well said!

  14. I can’t remember the last time I spent $100 on myself. It just doesn’t happen that often. So I would guess the value of $100 is pretty high for me.

    That said, if it’s a investment, I’ve been known to move 6 figures around very quickly.

    It’s a very strange dichotomy.

    • Steve says:

      Good point, it is strange. I guess it’s because we don’t think of moving investments around as “spending” like we would a $100 bill. But yeah, it takes an awful lot out of me to spend even $100 on myself, even if I truly do need the item.

  15. I had a lady tell me that we should definitely be using “her guy” to do our home improvements. “He only charges $50/hour.” Then I watched her cut him a check for $4200. I wanted to give the guy a high five for getting such a sweet gig, but I was too busy thinking: “Look at all those benjamins she wants us to just throw away!”

    • Steve says:

      Ha! Wow, such a great guy! It seems like everybody has “a guy” for something. And they are always the best, too. Each and every one of them…the best! πŸ™‚

  16. I agree that money is relative. Hell, if you go just a few states over from where you live the cost of living can be drastically higher or lower than what you’re used to.

    Once you rein in your spending, a $100 expense sounds absolutely insane! I remember I had to REALLY think about buying a $15 cardigan that I actually needed. $15 was a lot of money to me!

    Nowadays I have a happy medium between clenching dollars in my cold, Picky little hands and making wise purchases. While I know the value of $100, I still try to spend my money on higher quality items in the first place. While it takes longer to buy an item, I know it will last longer and I’ll get a better value for my money each time I use a quality product.

    • Steve says:

      Ha! Funny story about the $15 cardigan (BTW, before I got married, I had no idea what a “cardigan” even was). But honestly, I’m the same way now with clothes. Even a small $15 purchase needs to be well worth it for me.

  17. Jack says:

    I’m looking forward to the time when I’ve trimmed my expenses to where $100 is a significant portion of my budget.

    Growing up, my grandparents were very frugal, and taught me the value of a dollar. But it’s always good to remind yourself, both in time and value, just how valuable each dollar is.

  18. Our expenses have dropped even more since I quit my job. Not because we do less things but because we keep learning new ways to maximize our happiness per dollar. There was a time when I could blow a few hundred dollars in a night, but now I can have one hell of a weekend for that much money πŸ™‚

    • Steve says:

      Yup, me too Crazy Kicks. I remember my wife and I planned $100 dinners once a month just to do something nice. Of course we don’t do that any more, but it’s pretty insane how quickly $100 can go. πŸ™‚

  19. Many years ago when my husband & I were (super duper) poor college students, a bank deposit of ours was off by $100 (in their favor). Long story short, the bank acknowledged the mistake then a couple days later denied there was a mistake and we were out that money. $100 was probably worth what would now be the equivalent of at least $750-$1,000 to us today now that we have more financial security and professional jobs. I can definitely see the benefit in going back to $100 being of more worth by being frugal about what you spend your money on. One of the biggest benefits of this in my eyes is also being able to retire earlier because you don’t need as much money to live on. These are great thoughts that are at the true essence of where personal finance can really make an impact on people personally.

    • Steve says:

      Thanks Kathryn – yup, the ability to retire early is definitely a prime benefit to this type of spending. We’re relying on that for our future plans, in fact! Thanks for your comment. πŸ™‚

  20. Felicity says:

    This is great – it’s also something I find I need to remind myself every now and then, since it’s so easy to change your perspective over time. For me, a one-time purchase of $100 is huge and needs a lot of thought. Heck, even $20 is a big decision, especially if it’s a recurring expense.

    On the other hand, though, it can be tempting to say no to any extra spending, and in the way deprive yourself of experiences and socialization. Mindful spending – that’s the key πŸ™‚

    • Steve says:

      Thanks for the comment, Felicity. Mindful spending is absolutely the key – it’s about knowing the value that you get from every dollar that leaves your wallet. Once we understand value, we understand what makes us happy. πŸ™‚

  21. My wife and I still talk if we’re going to spend over $100 on an item. I can’t imagine discounting $100 bills like it’s nothing. I know when I have a $100 in my wallet, that it’s gotta be something really important in order for me to break that $100 bill. Like whatever I buy really needs to be worthy of that bill πŸ™‚

    Really enjoyed reading the article, thanks for sharing!!!

    • Steve says:

      You’re welcome, and thanks for reading, Mustard Seed. I’m right there with you – whatever I’m buying has got to be worth that $100 bucks, regardless of whether it’s cash or credit.

  22. Ha! I like that paper cuts line!!

    I’ve definitely spent $100 with all the exacting discrimination of a wasted deckhand – heck, probably even on toilet paper!

    The sad thing is I’m sure I’ve done it and yet there’s no particular instance – no really memorable escapade – that’s coming to mind. If that doesn’t validate your point, I don’t know what would!

    I like the message here of keeping the notional value of $100 high by treating it like you value it a lot. Making money “feel” a little precious goes a long way. And really helps cut down on TP costs.

    Nice post. Thanks for the good read.

    • Steve says:

      Thanks FinanciaLibre! Well said about making money feel precious. I like that. It’s a good way to think about value and whether or not whatever it is that you’re buying is truly worth your precious money. More times than not for me, it isn’t.

  23. Adam says:

    Great article, you always make me think. There’s a pretty important lesson here.

    I actually am feeling a bit embarrassed right now because I saw the article title in my email and thought, oh not another article about how to turn $100 into $x,xxx by the power of compounding… I should have known better! My apologies πŸ™‚

    • Steve says:

      Ha! Quite alright, Adam. I know how you feel – there are a lot of topics that seem to be “done to death” with personal finance. I try my best to keep things as fresh and unique as possible. Sometimes, I even succeed! πŸ™‚

  24. […] $$ that stood between me and a solid state hard drive. For about $100 more dollars, which of course is nothing to sneeze at, I would have ended up with a laptop that wouldn’t annoy the living daylights out of me. This […]

  25. I really love Tim Ferriss’s podcasts (usually). One of his standby interview questions is what is the best thing you’ve purchased recently for $100 or less. The number of guests who are absolutely stumped by this shocks me. It’s all relative, I suppose.

    • Steve says:

      Thanks Penny. It is all relative, and unfortunately the answer that Tim got to his question doesn’t surprise me. People don’t think before they spend. It’s all fun and games until you go broke, I suppose. πŸ™‚

  26. When I think back to when I was truly stupid about $100, most of the incidents had less to do with what I earned (frankly, not that much) than where I was in life (college or 20 something with minimal commitments and responsibilities.) And I paid for that attitude with too much credit card debt. Digging out (and seeing what happened when I overindulged my spending side) made me a lot more careful about $100, even when I made quite a bit more.

    • Steve says:

      Thanks Emily! I can see where minimal commitments and responsibilities can lull you into a false sense of security. If you have nothing to hold you back – even if you don’t make that much – then your value of money can definitely be negatively affected. Excellent point!

  27. Jef Miles says:

    Hmmm really interesting article and concept here Steve!
    For me it’s mostly about tracking and being conscious although I must admit 100$ doesn’t feel like a lot these days for me, maybe I’ve got the spenditis disease πŸ˜‰ ha

    Thanks for writing man, appreciate your views and ideas they’re thought-provoking

  28. Britt says:

    Hi, Steve! long time reader here, but I don’t think I’ve ever commented. I’m one of those regular lurkers πŸ™‚

    Anyways, I had to break my silence because I was seriously fist pumping my way through this post. AWESOME stuff. Early retirees, or people headed that direction, are in such a culturally unique position…in relation to net worth, $100 is likely nothing, but in relation to monthly spend, it’s significant. My highly unscientific opinion would be it’s fairly opposite for a good portion of Americans…$100 is a similar, maybe even higher – if they’re in debt – percentage to their net worth than it is their monthly spend. It makes me think of the often quoted article about how most couldn’t cover a $400 emergency…

    Anyways! I love this. Thanks for the awesome reminder. I think remembering the value of $100 is a huge variable in propelling people towards or away from that FIRE date. Before my husband quit his job to stay home with our son, he was making an hourly wage. We would often convert costs into how many hours he’d have to work to make a purchase, to keep ourselves in check with our priorities. I make significantly more, so it would be easier to lose touch with that $100 a bit. By using his wage as a barometer, we will never lose sight of how much a hundred bucks is!!

    • Steve says:

      Hi Britt! Thanks so much for your comment and hanging around for so long behind the scenes. I really, really appreciate that!

      Calculating the number of hours it takes of work to buy things is an *excellent* way to truly recognize how much things are worth. In fact, I think that’s one of the best ways to understand money. How many hours of work will it take to pay for the purchase of that item? Once we put it into that type of perspective, the answer might be something like “too many!”. πŸ™‚

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