Most people are spending 80% of what they have without realizing it.
It’s why you can cut costs, pile away savings, put in overtime and still be completely depleted at the end of every week.
The problem isn’t that you don’t have enough.
It’s that you’ve been spending more than you account for, just not with money.
Money is the one currency everyone pays attention to.
It’s been ingrained in us for generations.
So you watch it, you track it, you budget it. You check the price before you buy.
And while your eyes are on the money, the other four currencies are leaking out of your balance behind your back, every single day.
The goal of this article is to bring all five into focus so you can plug the leaks and take back what’s yours.
The Counting Error
In Aesop’s fable of The Miser, a man sells all his possessions to buy a lump of gold, and buries it in his garden.
Every day, he visits the spot and digs up the gold to look at it and count it.
A passerby observes the miser’s routine, finds the hiding place, and steals the gold.
When the miser returns to find the empty hole, he breaks into a wild grief, crying and tearing his hair out.
A neighbor overhears and tells him not to grieve. Instead, he should just put a regular stone in the hole, as that would serve him just as well.
The moral is usually interpreted as a joke about a man too cheap to spend his own wealth.
But his mistake wasn’t greed. He was counting wrong.
He counted one resource and counted it perfectly, day in and day out.
But he never counted the other intangible resources he was spending.
All the hours and the effort, the risk of giving up all his possessions, the attention consumed by a hole in the ground that did him no good at all.
Most people are the miser to some degree.
They just don’t bury their gold in the garden, they bury it in a bank account.
They don’t trade all their possessions for it, but they trade all their time.
They protect the one tangible currency and the other four slip through their fingers unobserved, because they never considered them to be currency in the first place.
You have to account for all 5 currencies.
Ignoring 4 of the 5 is how you blow 80% of the budget without realizing it.
The 5 Currencies
Everything is bought and paid for with one or a combination of these 5 resources.
Typically, saving on one means spending another. So you have to know which one is worth optimizing for in the moment.
Sometimes it’s money, sometimes not. But that’s what most people’s priority is set to by default.
Money is the most obvious because it is the most tangible.
But it’s actually the least important resource of the five. (This coming from the guy preaching about financial autonomy.)
Time is the next logical choice, as it is one of the only truly fixed resources we have.
Going hand-in-hand with time is Effort. People often conflate the two because effort tends to take time.
But you can spend more of one and less of the other, lots of both, or none at all, so the distinction is important to make.
Risk is one that most people don’t think about.
I spent years doing fraud prevention work in the risk and compliance industry, so it’s always on my mind.
And it’s important because almost every investment comes with some sort of risk.
But the one that almost everyone misses is Attention, and this one is key for a few reasons.
First, attention is the most common substitute for the default currency. (Think free with ads.)
More importantly, what you direct your attention toward shapes your mind and influences the way you think.
That’s why it’s so important to spend your attention budget mindfully.
If you aren’t conscious of this, your mind and thinking are shaped for you without you even noticing.
When it comes down to it, everything costs some combination of these resources to attain.
Seeing it clearly requires a proper cost-benefit analysis.
Even the things that are “free” cost something.
It’s usually hiding in one or more of the other four currencies.
How much does “free” actually cost?
Think about anytime you got the “free version” of something.
Every homemade Halloween costume came with a price, even if it didn’t have a price tag.
You had to spend time and effort measuring and sewing and stitching.
If that’s something you enjoy, then it’s probably worth it. If you can’t stand the sewing machine, don’t put hours of your time and frustration into it just to save a few bucks.
Making the decision requires a cost-benefit analysis, and to make the most accurate assessment, you must consider all 5 currencies (costs) and the benefits, and be honest about your priorities.
Everything on the dollar menu at a fast food chain comes with a small invisible price. Risk.
The risk of heart disease, or diabetes, or an uncomfortable afternoon of digestion.
Sure the risk for an individual burger is small. But if you make a lifestyle out of it, the risk compounds.
If you round down to zero every time, you don’t notice the risk sneaking up on you.
Every app or streaming service “free version” is layered with ads for you to pay with your attention instead of with money.
And most people do it without a second thought because money is the default priority.
Or they complain about both the ads and about the subscription fees, not understanding that they are just two variables in a cost equation.
The cost equation is critical to understand if you want to plug the leaks and take back what’s yours.
Attention is the gateway to the mind
Attention isn’t just spent, it’s harvested to program you
The majority of people are missing the forest for the trees when it comes to this.
One tree in particular. Money.
But as mentioned before, money is the least important resource on the list.
It only feels important because it’s tangible.
The more important resource to prioritize is attention, and for a few reasons.
Most importantly, attention is the gateway to the mind.
When you give someone your attention, you are receiving new thought patterns and ideas, which shape your own thought patterns.
If you’re conscious of this, you can mold your mind and shape your thought process how you choose.
If you are not conscious of it though, what you spend your attention on will mold your mind without any input from you.
You are what you eat, so be mindful of what you consume.
Second, attention is the most common substitute for money.
Most premium experiences are ad-free, which means that if you choose not to upgrade, you get the same service but with ads.
Instead of paying with money, you are paying with attention.
The service provider can still provide the service because advertisers pay them to show their ads to those users.
Which means that if you are paying with your attention, someone else is being paid for your attention.
You are donating your own resources to make yourself more programmable.
And it’s a trade most people make without thinking about it because they optimize for money by default, and one option clearly has a smaller number.
The 5-Way Cost-Benefit Analysis
The solution here is simple.
Practice the 5-way cost-benefit analysis. Make it a habit to consider the balance of all 5 resources before they are spent.
It’s especially important to do any time you find yourself in a position to save money. You must ask yourself:
What is the trade-off?
What other resources are you paying with in place of money?
How much of those resources?
What’s the dollar value of those resources (or your best approximation)?
Is it less than you would save?
If so, the tradeoff is likely worth it. If not, it’s a poor trade and you’re better off paying the money.
The sooner you acknowledge all five, the less likely they are to be stolen from you.
Continue rounding the intangibles to zero, and you’ll continue to blow the budget, even while you’re trying to save.
Don’t Be The Miser
Don’t get so focused on one currency that you lose sight of the others.
While you’re focused on the lump of gold, the other four resources are stolen from you or spent by you without you even realizing it.
This gives you only one leg to stand on, making it all the easier to steal the fifth one too.
And when that happens, you’re left with nothing more than a hole in the ground and a told-ya-so neighbor.
When you find yourself optimizing for the number after the dollar sign, ask yourself:
How much does free actually cost?
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