How to Rank Your Spending: From Smart to Wasteful
Why the Middle Option Usually Wins
In nearly every spending post, I try to emphasize I'm not anti-spending. I spent nearly $70k last year. Rather, I am anti-wasteful spending. I am against spending that doesn't bring joy. I am against misguided spending to compete with others, to fit in, or to rent happiness.
The problem is most financial advice treats all spending as either "good" or "bad." Buy groceries = good. Eat out = bad. But reality is more nuanced.
Today I want to show you how I rank spending choices within each category. This isn't about finding the cheapest option. It's about finding the best value per dollar, where value includes happiness, quality, durability, health, and other benefits.
My Ranking Criteria: Value Per Dollar
When I evaluate any spending choice, I consider:
Happiness: Does this actually improve my life?
Quality: Will this work well and last?
Health: Does this support or harm my well-being?
Time: Does this save or waste my time?
Sustainability: Can I maintain this choice long-term?
Notice that cost is just one factor. Sometimes the expensive option provides the best value. Sometimes the cheap option is perfect. Often the middle option wins.
Let me show you how this works across the most common spending categories.
Food: Health + Convenience + Cost
Best to Worst Value:
Buy healthy ingredients, cook at home - Best value
High health benefit, low cost, builds skills
My choice: 95% of our meals, mostly vegetarian from Costco/Walmart
Buy healthy meal kits, cook at home - Good value
Convenience + health, moderate cost
When to choose: Busy weeks, trying new cuisines (and to steal the best recipes)
Eat at healthy fast-casual restaurants - Fair value
Good health, higher cost, saves time
When to choose: Social occasions, when truly too busy to cook
Buy premium ingredients, cook at home - Fair value
Marginal health benefit, high cost
When to choose: If budget allows and you taste the difference (brand name spices, organic where it doesn’t matter, pre-sliced fruit, bottled water)
Eat at expensive healthy restaurants - Poor value
Health + experience, very high cost
My choice: About once monthly for social/enjoyment reasons
Have healthy restaurant food delivered - Poor value
Adds delivery fees/tips to already expensive option
When to choose: Rare occasions when truly unavoidable
Eat fast food in restaurants - Poor value
Low health benefit, moderate cost
When to choose: Road trips, emergencies only
Have fast food delivered - Terrible value
Low health, high cost (fees/tips), promotes lazy habits
When to choose: Emergency backup only
Eat frozen dinners regularly - Terrible value
Poor health, moderate cost, unsatisfying
When to choose: Never
Notice that frozen dinners rank worse than expensive restaurants, even though they're cheaper. Cost isn't everything.
Transportation: Reliability + Cost + Time
Best to Worst Value:
Buy reliable used car with cash - Best value
Low cost, no payments, proven reliability
My choice: 2008 Toyota Land Cruiser, still running strong
Buy certified pre-owned with cash - Good value
Slight premium for warranty peace of mind
When to choose: If you want newer features/safety
Buy new economy car with cash - Fair value
High upfront cost but long-term reliability
When to choose: If you keep cars 10+ years
Finance reliable used car - Poor value
Adds interest cost to good base decision
When to choose: If you must finance, at least choose wisely
Finance new luxury car - Poor value
High cost + depreciation + interest + status signaling
When to choose: Cars are your passion and you’re willing to cut in other areas
Lease basic reliable car - Poor value
Predictable costs, always under warranty
When to choose: If you drive little and find an incredible lease special
Lease luxury car - Terrible value
Highest monthly cost for temporary ownership
When to choose: Never
Buy unreliable used car to "save money" - Terrible value
False economy, hidden costs in repairs/downtime
When to choose: Never, unless you're a mechanic
Housing: Comfort + Location + Cost
This one greatly depends on the market in your area, but this is correct on average.
Best to Worst Value:
Buy modest home in good area with 20% down - Best value
Builds equity, stable payments, good schools/safety
When to choose: Stable income, planning to stay 5+ years
Rent modest place in convenient location - Good value
Flexibility, no maintenance costs, shorter commute
When to choose: Uncertain about location/job, high home prices
House hack (rent rooms/duplex) - Good value
Reduce housing costs, learn land-lording
When to choose: Comfortable with roommates, want real estate experience
Buy fixer-upper with skills to renovate - Fair value
High sweat equity, good returns if you have skills
When to choose: You enjoy renovation and have the skills
Rent expensive place for lifestyle/convenience - Poor value
High cost for amenities you may not use
When to choose: Almost never during wealth-building phase
Buy too much house (price or size) - Poor value
Ongoing costs for unused space, lifestyle inflation
When to choose: Almost never during wealth-building phase
Rent-to-own or other predatory schemes - Terrible value
Designed to separate you from maximum money
When to choose: Never
Entertainment: Joy + Social + Cost
Best to Worst Value:
Free activities (parks, libraries, hiking) - Best value
High joy, social opportunities, health benefits
My choice: "The best things in life are free"
Annual memberships (museums, state parks) - Good value
Encourages frequent use, cost per visit drops
My choice: Local museum membership, National Parks pass
Occasional experiences with friends - Good value
Social connection, memories, shared costs
When to choose: Meaningful relationships and experiences
Streaming services (used regularly) - Fair value
Huge content library for low monthly cost
My choice: Spotify, rotating video services
Movie theaters, concerts (occasional) - Fair value
Expensive per hour but create memories
When to choose: Special occasions, artists you love
Multiple unused streaming subscriptions - Poor value
Paying for content you don't consume
When to choose: Never, audit quarterly
Expensive recurring entertainment - Poor value
Season tickets, box seats, VIP experiences
When to choose: Only if it's truly a passion
Gambling/lottery - Terrible value
Negative expected value, designed to take your money
When to choose: Never as "investment," maybe $20 for entertainment
The Pattern: Middle Often Wins
Notice that the cheapest option isn't always best, and the most expensive is rarely worth it. The sweet spot is usually in the middle: good enough quality without paying for marginal improvements.
Also, note I didn’t include any extreme options at all. There was no “50 pound bag of rice” option for food and no “live in a tent” for housing. While luxury goods are nearly always a waste of money, some “free” options aren’t worth the negative impact on your life.
Key insights:
Cheap can be expensive if it breaks quickly or harms your health
Expensive often has diminishing returns beyond a certain point
Your situation matters - my post-FI choices differ from accumulation phase
Quality and durability often beat rock-bottom pricing
Time is valuable - sometimes paying more to save time makes sense
How to Apply This Framework
For any spending decision:
List your options from cheapest to most expensive
Consider the full value - not just price
Factor in your current situation - accumulation vs. FI vs. emergency
Choose consciously rather than defaulting to cheapest or most convenient
Review regularly - your optimal choice may change over time
The goal isn't to always choose the "best" option. It's to choose consciously based on your values and situation, rather than falling into expensive habits or false economies.
Remember: I'm not anti-spending. I'm pro-strategic spending. There's a big difference between buying what brings value and buying what brings status, convenience, or temporary pleasure.
Here's to spending on what actually matters,
Max
Your turn: Pick one category where you spend regularly. Rank your options from best to worst value. Are you currently choosing strategically, or just defaulting to habit?