Spending on Ourselves
post by jefftk (jkaufman) · 2025-04-20T18:40:07.988Z · LW · GW · 0 commentsContents
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The Effective Altruism community has encouraged a range of different approaches to doing good over time. Initially there was more focus on frugality as a way to increase how much you could donate, which was mostly supplanted by emphasis on earning more. In late 2015 this started to shift towards doing things that are directly useful, which accelerated in 2021. Then the market fell in 2022, FTX turned out to be a fraud, and there haven't been new donors near the scale of Open Phil / Good Ventures. Among many changes, people are thinking more about frugality again: the less you can live on, the more you can stretch a given amount of funding. [1]
To encourage myself to live more frugally and to give an example of what I thought was a pretty fulfilling life at relatively low cost for the US, I used to calculate numbers for how much we spent on ourselves. This included housing, food, transportation, medical, etc but not donations, taxes, or savings. At one point there were some news stories comparing our spending to our income, and it was nice to have a simple number to point at.
I was thinking it might be nice to start calculating these numbers again, but when I looked back at why I stopped it's mostly that it's actually a pretty tricky accounting question and I'm not sure there are ways to draw the lines that make much sense. For example:
One of the main things I do for fun is play music. This costs some money (instruments, kids coming with me to gigs, fun things while traveling) and also earns some money. How should I account for this? At one extreme I could say that income is income and expenses are "spending on ourselves", but this doesn't match reality well: there shouldn't be a difference between playing a dance weekend that is $1,000 with reimbursed travel and one that's $1,500 but I need to spend $500 on flights. At the other extreme I could look at the whole activity on net, and subtract expenses from income, but should what's essentially a family vacation tacked onto a gig really not be "spending on ourselves"? In between I could count this the way the IRS does (an approach I think is a good fit for determining income for pledging purposes) but this is also not great. For example, some portion of my new keyboard should probably be "spending on ourselves" since I was motivated in part by a desire to enjoy playing a nicer instrument and have less hassle in gig packing. And in the other direction, if I pay $200 in childcare to take a $125 gig the IRS doesn't count the childcare against income at all but I think $75 would be closer to what most people would consider "spending on ourselves".
When I last calculated these I didn't include expenses paid by our employers: as someone earning to give my employer gave us much nicer health insurance (and meals, and working conditions) than we would have bought for ourselves, and at least that excess portion doesn't seem like it's "spending on ourselves". Now that I'm doing directly valuable work and my frugality is more driven by a desire to extend runway for my project, however, if my employer is paying a lot for my health insurance that affects runway same as any other expense.
I would live in Boston regardless, but if someone who would otherwise work remotely in a low cost of living area decided their highest-impact option was to move here to work at the NAO I wouldn't want to count at least some portion of their increased living expenses. Similarly, if it made sense for use to move to the Bay Area (please no) for our work I'm not sure how I would want to count the increased housing (and other) costs.
If things started going poorly with childcare or school and one of us went down to part time, perhaps this is part time childcare paid in kind, imputing both income and expense? But you get weird results either way: if you don't do this foregone childcare means "spending on ourselves" goes down in a somewhat misleading way, while if you count all the time we spend taking care of the kids as implied income+expense you get very large numbers. And in between I don't really see a principled reason to count this only for the delta between a normal work week and the reduced hours.
I think part of why this doesn't feel very coherent is I'm trying to get "spending on ourselves" to do too much. It can't be both what people naturally understand the term to be (even ignoring that this isn't all that consistent) while also a good number to optimize for maximizing altruistic impact.
So I don't think I'm going to try to go back to calculating a number here, and instead I'll stick with sharing spending updates every couple years.
[1] Prompted by some observations a friend recently posted, but not
linking since it was friends-only.
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