I’m going to start living on minimum wage. Sort of. Not really. It’s complicated.

Some types of sophistication won’t make you enjoy the object more, they’ll make you enjoy it less. For example, wine snobs don’t enjoy wine twice as much as you, they’re more keenly aware of how most wine isn’t good enough. Avoid sophistication that diminishes your enjoyment.

— Conor Barnes

In the beginning God created a budget

There’s basically two parts to a budget. There’s the part where you track things, and the part where you use it to make decisions. I’m decent at the first part. Awful at the second.

I’ve been using YNAB since it was desktop software. It does an incredible job of tracking how I spend my money and assigning it to categories. Categories that I have, nominally, assigned my income to. What it can’t do is tell me to stop spending money when I’ve overspent a category. Which is fair, because I can’t tell me to do that either.

Broadly, in practice, I spend my money on vibes. I know roughly how much I can get away with spending, and I’ve got systems in place to cover when I overspend, so I’m never at any real risk of the bills not getting paid, but it’s not a great way to achieve my longer-term goals.

Now the budget was formless and empty

I’m old enough to have worked jobs where my paychecks were actual checks, delivered to the building, by hand, that I had to take to a bank to deposit.

Dinosaurs and Margaret Thatcher roamed the earth. Mosquitos the size of Volkswagens. Etc.

But for at least the last decade or so I’ve worked for companies with direct deposit, and where there’s direct deposit there’s usually a way to split that deposit between multiple accounts. I’ve used that ability to functionally “hide” money from myself. Probably a solid third of my paycheck skips my checking account each month, diverted to various savings and investment accounts.

This is the mechanism that supports my tendency to overspend. While I know there’s always money in the rhetorical banana stand, I don’t always know how much and I don’t think of it as “available to spend.” A few times a year, I end up raiding one or more of those other accounts to cover. And that’s broadly what I think of as “the system working.”

As a consequence, I’ve never missed rent. Literally or rhetorically.

And God said “let there be income”

It turns out I’m actually pretty good at living within the limits of what I think I have. I know how much money is in my checking account at any given time, and that creates a rubric for what size of purchase I can make without needing to check the balance. Mostly it’s fine. Sometimes I overshoot, but then I’ve got savings to cover.

I call this the “zone of indiscriminate spending.” How much money can you spend without needing to think about it? Maybe it’s a couple bucks. If you’re fortunate, maybe it’s a couple hundred.

Right now this zone is much larger than I’d like it to be. I’d like to be operating like $10 is no big deal, but $100 requires scrutiny. In practice I operate at about one order of magnitude above that.

And God said “let there be spending”

So I’m going to start living on minimum wage. Sort of. Kind of. Not really?

I’m going to put myself on an allowance roughly equivalent to minimum wage.

It’s a more extreme version of the technique that’s always worked: hiding money from myself.

The key here is to reduce my intuitive sense of what’s available to spend without actually putting myself in danger of bills not getting paid.

I call this a “load-bearing lie.” We all know it’s not true. I know it’s not true. But maintaining the fiction is important to achieving my desired outcome: I need to behave in all ways as if the money is not available to spend in order not to spend it.

And God said “let me separate the good spending from the bad”

How do I do this in practice? Too many bank accounts.

My income from any and all sources will flow into a clearinghouse account, implemented as a money market account at my main bank. Their money market accounts have the same APR as a high-yield savings account, so money sitting in that account earns as much interest as money I’ve sent to savings.

However, money market accounts have withdrawal limits, so the next step is routing “spendable” money out of the clearinghouse in as few transactions as possible. Each of the following will happen on the last day of the month, to set up the next month’s spending.

• Transaction 1: my allowance to my personal spending account.
• Transaction 2: my contribution to the family’s fixed expenses to our shared spending account.
• Transaction 3: payment of any reimbursable work expenses to a dedicated credit card.
• Transaction 4: transfer to savings.
• Transaction 5: transfer to brokerage.

Notably, this is exactly half of the “allowed” number of money market transactions in a month. That gives me breathing room to transfer again if something goes wrong. The whole point of this system is to automate as much as possible and avoid the need to do so, but I have the flexibility if I need it.

And God said “okay maybe don’t spend that much”

Okay, so what is my allowance? I thought about this for quite a while and decided to pin it somewhat arbitrarily to Maine’s minimum wage.

Why Maine? Because I’m planning to move there in the next few years. Why minimum wage? Because it’s a psychologically useful framing. People find a way to make minimum wage work.

The problem I’ve set for myself is actually much easier than truly living on minimum wage, since the family’s fixed expenses don’t need to come out of that pool of money, but thinking of myself as trying to live at or below the minimum wage line provides a point of reference and an identity designed to guide me away from overconsumption and overspending.

And God said “let the Bills be with the Bills”

As you’ve probably already noticed, the devil is in the details. When I talk about not needing to pay for the family’s fixed expenses from this pool of money, that potentially leaves a lot of room to keep spending money the way I always have, except now with more steps.

What counts as fixed? What counts as discretionary?

In practice, it comes down to how the thing is paid.

I run almost all of my finances through credit cards, paying them off in full each month, and harvesting those sweet rewards points to help defer the costs of travel. Because I can’t have my credit cards pay their balance in full split from multiple checking accounts, each card effectively becomes a boundary.

Bills like the mortgage, insurance, card payment, and utilities don’t generally accept credit cards for payment. They autopay through ACH transfers.

All of the ACH transfers will go through the family account. All of the credit cards will get paid through my personal account.

If I swipe a card, it’s discretionary. If it autopays, it’s fixed.

God saw all that he had made, and it was very good

I’ve spent a lot of words on what I’m planning to do, but not what I’m trying to achieve by doing it. I think because that part’s clear to me but somewhat harder to capture in words.

One reason is to fight back against lifestyle inflation. It’s so easy to spend money that I have on things that do not, ultimately, serve my long-term goals. And, once spent, it’s frequently hard to unspend. Sometimes in ways that accrue over time, such as additional subscriptions.

Another reason is to avoid developing sophistication that diminishes my enjoyment. If we “can’t afford” the fancier soap, are we really any worse off? What about those nicer bed sheets? That name-brand food product?

Eventually I’d like to reintroduce a significant gap between what I earn and my lifestyle, such that if my material circumstances changed I would not be worse off. This feels like, amongst many other things, good future-proofing.

At the end of the day $2500 per month is actually quite a lot for pure discretionary spending. People I respect immensely fit their entire life into that or not much more. It feels like a realistic and worthwhile goal, even as I acknowledge the ways in which I’m on “easy mode” in comparison.