When Sarah and I first started to turn our finances around, I looked at every single expenditure as an enemy to be conquered. If a dime went out of our life, then I wanted an explanation for that expense.

Our philosophy was that the less money we spent, the faster we could escape the financial hole we found ourselves in, and since that was the number one priority in our life at that moment, everything that wasn’t pretty justifiable as a “need” should be cut.

For several months, our entertainment spending basically dropped to zero. We didn’t eat out. I stopped going out after work. I cut out golfing.

We also started practicing some rather extreme frugality steps at home. We were doing things like washing Ziploc bags by hand, clipping tons of coupons from newspaper flyers and so on. We were essentially trying every single frugal technique we could think of, with our eye on the prize of conserving every penny we could to pay off our debts as rapidly as possible.

The problem, of course, is that chasing every possible penny with frugal steps was wearing us out. We both had full-time jobs and a baby at home, and we were also involved in some community groups where we had leadership positions.

At first, coming home and finding creative ways to shave off a few pennies was exciting, as it felt like a game where we were trying to achieve a “high score” of the least possible amount of spending, but after a while, that game turned into a drag.

Eventually, we found ourselves backtracking on a lot of our adopted frugal practices, simply because we were worn out and wanted more time to just relax. We were just burnt out, and it turned into something of a backlash against the entire concept of frugality. As a result, for a while, we backtracked on quite a lot of our frugal changes. We stopped couponing and washing plastic bags, of course, but we also started ordering more takeout, spending more on entertainment, and so on. A lot of the frugal practices we had picked up went by the wayside.

Not all of them did, however.

What we found is that we kept a lot of the frugal practices that didn’t require much effort or time to maintain. As long as the change didn’t require us to put forth a lot of work or a lot of time, we kept that change as a part of our life.

We kept buying lots of store brand items — doing so didn’t require any extra time or effort.

We kept making grocery lists because we learned that doing so usually saved time as well as money because the time lost to making a grocery list was recouped by less time spent in the store.

We kept making homemade laundry soap because it took just a few seconds and saved significant money.

We kept our home energy changes, like switching to lots of LED bulbs and modifying our preferred temperature settings and ceiling fan settings because it required basically no time and effort to do so.

We kept our cheaper insurance policy because we’d already invested the time and energy to shop around.

In short, we found ourselves sticking with lots of frugal steps as long as those frugal steps didn’t require much time and energy to maintain.

This realization came to us gradually over a month or two, when we thought we had largely backtracked on most of our frugal moves (this was a few months before I initially launched The Simple Dollar). We realized that, even though in many ways we had reverted to our old lifestyle, we still weren’t spending money nearly as fast as we used to. A lot of our bills were naturally lower — our utility bill, insurance bill and grocery store bill — and that had a real impact on our bottom line.

It wasn’t just that frugal practices that require little time and energy to maintain were really valuable, but that frugality is really about efficiency, and that efficiency includes your time and energy.

As we realized this, we came to yet another realization: while some of the frugal practices we had discarded were better off left in the trash can, some of them were actually more useful than we thought.

The key is understanding that your time and energy have real value, and the most frugal approach to things is the one that uses the minimum amount of your overall resources — time, money, energy and focus — to get the result you want.

For example, when we were washing Ziploc bags by hand, we were investing quite a bit of effort and time to get a single baggie clean again. That baggie cost about $0.06, and washing it by hand and making sure it was dry enough to not have any mold in it took at least a minute. So, in theory, our savings was about $3.60 per hour of time spent washing baggies, right?

Actually… that’s not right. It’s worse. The Ziploc bags would usually fall apart after 4 or 5 washes, and I’d discover this usually in the midst of washing one, so that would just go in the trash. The actual rate of savings is about $3 per hour.

Let’s say, instead, we bought some sturdy reusable food containers that could do the job of the baggies. We invest $30 in them upfront and thus never have to buy replacements. We use those instead of Ziploc baggies for taking lunch to work and on picnics. To clean the reusable containers, we toss them in the dishwasher — basically zero time spent on them.

It takes about 50 uses for a reusable container to get as cheap per use as a Ziploc. After that, additional uses mean that the reusable container is actually cheaper per use than a single-use Ziploc, meaning the “savings” from washing Ziplocs is even less per hour.

Sorry, it just doesn’t make sense for me — or for anyone else — to spend their time washing Ziploc bags to save less than $3 per hour of effort. Even if you got way more efficient at cleaning and drying those bags and cut the time per bag in half, that’s still less than $6 per hour of effort. It’s just not worth it.

What I’ve learned over time is that if a frugal task isn’t saving me at least $20 for an hour’s worth of unenjoyable effort, I’m not doing it. I’m willing to do things I might not normally do to save less than $20 per hour, but I better be enjoying it in some other fashion.

Let’s slice and dice that a little bit, then.

Here are some things that clearly make the cut for me:

  • Making meals at home for my family of five
  • Doing home energy improvements
  • Washing my own clothes
  • Buying store brands
  • Making grocery lists
  • Optimizing pretty much any routine I do more than once a week
  • Comparison shopping for individual high-value items

Here are some things that don’t make the cut for me:

  • Clipping coupons (outside of ones that basically fall into my hands)
  • Washing Ziploc bags
  • Recycling aluminum cans (we save them, but then donate them)
  • Shopping at several stores to save a couple of dollars

The difference? Time and energy have value. You shouldn’t be spending your time and energy on activities that return very little money. If your time and energy invested in frugality return substantially less than you would make for similar amounts of time and energy invested in your job, then it’s not a good investment (unless you otherwise enjoy the task).

How do you decide? Most of the time, I simply trust my gut. If something seems like it’s an enormous time investment for little return, then I usually trust that it is. If I’m not certain, I usually try to calculate my savings per hour of effort, and if it’s less than $20 for the hour, it’s probably not worth the time and energy unless I get more enjoyment out of the task.

For example, I get extra pleasure out of making food at home, so making a loaf of bakery-quality bread is worthwhile for me even if the savings per hour compared to just buying a loaf from a bakery is less than $20. On the other hand, gathering and returning aluminum cans is drudgery, so if I’m not making $20 per hour for that effort (trust me, I’m not), then I’m not doing it.

Value your time and energy. Don’t trade it for only a small financial return. Life is too short, and it’s just not worth the trade.

Good luck!

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