Why We Suck at Saving Money, and Suck Even Worse at Saving Time

Two recent articles in the New York Times got me thinking about why most of us really suck at saving money and more importantly why we suck at utilizing our time well. These are two separate but very connected issues. They are connected because after all we all know that time is money and money is time.

Both money and time seem like nonrenewable resources. Time actually is a nonrenewable resource. Although we don’t know exactly how much time we have, it’s a pretty good bet that most of us have between 70 and 90 years on this planet. And we each have 16 to 18 hours of conscious time each day. Just like oceanfront property, we can’t manufacture more time, we can only better utilize the time we have.

Money also seems like a nonrenewable resource for most of us. But it’s not really. In fact, thinking that money is a nonrenewable resource is probably one of the main reasons why people don’t use time better.

The first New York Times article, How to Pinch Pennies in the Right Places, gave a theoretical thought experiment. If you could save $10 on a $50 set of headphones, would you drive 30 minutes across town to get a better price at a different store? (Answer this before reading on.)

Or, if you could save $15 on a $400 television would you drive 30 minutes across town?

Research done by Daniel Kahneman and Amos Tversky in 1981 suggests that most people were more willing to drive across town to save money on the headphones than on the television. You save 20% on the headphones and only 3.75% on the television. But we don’t spend percentages, we spend dollars, and actually you’d be saving more money ($15) on the television than on the headphones ($10).

The same article discussed other research that suggested that consumers were willing to spend 20 minutes extra to save $3.75 on a $10 pen, but needed a savings of at least $278 on a $30,000 car to be willing to invest the same 20 minutes extra.

This of course is crazy! In the example of the pen people value their time at $11.25 per hour. But in the example of the car people are unwilling to make an investment of time that would pay them $834 per hour!

But we all fall prey to different versions of this. How much time do we waste surfing Amazon in order to save a few bucks on a product? Or to find a product that has 4 stars instead of 3 ½ stars?

This article also pointed out that people on the lower income level are less likely to fall prey to the percentage saved fallacy, because they care about each and every dollar. But I think the article misses a more important point – which is the real way to have more money!

Saving $10 or $15 on a purchase really doesn’t matter compared to lowering recurrent expenses. For instance, how much money do you spend each month on the following items: cell phone service, Internet service, cable or satellite TV, coffee drinks at your local café, restaurant meals, rent or mortgage, car payments? How much money did you spend on your last car? Spending $120 per month on cable TV comes out to $14,400 over 10 years. Nice late-model used cars can be had for $10,000-$15,000, yet many people drop $50,000 on a new car. Even just saving $30 on a less expensive cell phone plan means that you will save $3600 over 10 years.

(A number of years ago I looked at my recurrent expenses and realized that I was spending a lot of money on two business landlines, and on cable TV. I spent some time doing research and ended up purchasing a couple of Ooma telephone systems that when connected to the Internet provided completely free telephone service. I also put an antenna on my roof and switched to free over-the-air HDTV. The time invested was probably about 4 hours for all of the research and installation. But I saved almost $300 per month, without giving up anything I really cared about other than perhaps Monday night football (which is on cable TV only). My one-time four hour investment has paid me more than $10,000 in savings, which is roughly $2500 per hour! And I continue to save money each month.)

But the article also misses a more profound point, how to earn more money. People focus too much on saving money and not enough on earning more money, through work, entrepreneurship, education and training, and investment. In this era of the Internet there are 1 million ways to earn more money. And improving your education and training can help you earn more money in your current employment as well as well. Improving income opportunities lasts for life, while getting a good “deal” only lasts for a day! Or, if you can afford to invest money, then focusing your time on investing more successfully can yield huge benefits in total dollars. I know people that have spent the time to learn about investing in residential real estate, and who will retire with very nice incomes from the time they invested in acquiring and managing these properties.

Which brings me to the 2nd New York Times article, What Should You Choose: Time or Money? This is a fascinating and profound article. It summarizes research performed by Hal Hirschfield, Cassie Mogilner, and Uri Barnea which asked the question what do people choose, time or money? About 65% of their participants chose money over time, showing a small preference for money versus time. This in itself is not surprising or even particularly interesting. What’s more interesting is that those who chose time rather than money reported higher levels of happiness, even when the researchers controlled for participants’ amount of leisure time and income and money.

Realistically speaking, we are all in the business of balancing time against money. How we do this has significant implications in terms of our well-being and happiness. Research suggests that we should tilt in the direction of saving and valuing time rather than money if we want to maximize our happiness. There is ample research suggesting that experiences create more happiness than material possessions. And experiences take time (and sometimes money), while material purchases take money (and sometimes time.)

What can we learn from this research?

  1. When possible, tilt your decisions in favor of time rather than money. Don’t buy a cheaper house which requires you to spend many hours a week commuting. Don’t spend very much time in order to gain small savings in money.
  2. If you are going to invest time in order to save money, calculate your hourly “pay”, and only invest the time if the hourly salary is high. For instance, if it will take me 30 minutes to save 20 bucks, I’m earning $40 per hour. But if it takes me 30 minutes to save $5, then I’m earning $10 per hour. Try to be rational about these decisions and don’t pay any attention to the percentages saved, only to the dollar values and the time values.
  3. Time invested in saving money on recurrent expenses such as cable or satellite TV, car insurance, cell phone service, Internet service, etc. will always pay you a higher salary rate per hour. A few hours invested in researching less expensive alternatives and switching can save hundreds of dollars a month indefinitely which adds up to a very good return on your time invested.
  4. When you get excited about “getting a deal”, always calculate the true cost of the deal in time and in hassle. This will prevent you from driving across town to get a small savings or from spending too much time spent on the Internet looking for deals. (I am as guilty of this as most people, although I’m much more likely to spend time online rather than time in my car, even though both waste time.) Ask yourself whether on your deathbed you will be telling your grandchildren about this deal that you got. Remember that in the grand scheme of life, time is worth more than money. (See this classic parable about the poor fisherman and the entrepreneur.)
  5. Finally, remember that life is not just about time and money, it’s really about meaning and values. Spending money doesn’t really benefit you unless it ties into your core values and improves meaning in your life. That’s why even getting a multiplicity of small “deals” doesn’t really matter in the grand scheme of things. What matters more is whether you spend money to support your core values. That’s why grandparents sometimes pay for their grandchildren’s college, even though it’s an expensive proposition. And that’s why taking your family on a really fun vacation is a good investment as it leads to experiences and memories that potentially last a lifetime. (My siblings and I will always remember magical experiences from our family trips – playing telephone tag in the elevators of the Caesar’s Palace in Las Vegas, riding donkeys along a precipitous cliff in Grand Canyon, screaming “beep beep” on a narrow, twisting road in Spain when our rental car horn failed.)
  6. And even time should be evaluated in terms of meaning and values. Here in Silicon Valley a lot of people retire early. This isn’t always a good thing however. What I’ve seen is that they often end up spending time doing things that don’t really add to their happiness. For instance, they will design and build a custom house, usually quite large, which eats up several years of their life playing at general contractor and quality control inspector.
  7. Just as spending money intelligently is challenging, it’s even more challenging to spend time well. I struggle with this all the time. But I try to continually improve how I spend my time, for instance trying to focus more on writing these blog articles rather than watching television or reading a novel.

This article ended up being a lot longer than I expected, but I think these are profound and important issues for all of us to think about and to improve. Now it’s time for me to have some fun!


Dr. Andrew Gottlieb is a clinical psychologist in Palo Alto, California. His practice serves the greater Silicon Valley area, including the towns of San Jose, Cupertino, Santa Clara, Sunnyvale, Mountain View, Los Altos, Menlo Park, San Carlos, Redwood City, Belmont, and San Mateo. Dr. Gottlieb specializes in treating anxiety, depression, relationship problems, OCD, and other difficulties using evidence-based Cognitive Behavioral Therapy (CBT). CBT is a modern no-drug therapy approach that is targeted, skill-based, and proven effective by many research studies. Visit his website at CambridgeTherapy.com or watch Dr. Gottlieb on YouTube. He can be reached by phone at (650) 324-2666 and email at: Dr. Gottlieb Email.

Dealing with Conflict Over Typical Home Neatness/Cleanliness Issues: The Houzz Interview and Some Other Thoughts

I was recently interviewed for the site Houzz, which is a web site and online community about architecture, interior design and decorating, landscape design and home improvement. In an article, A Therapist’s Guide to Dealing With Conflict at HomeI was interviewed by Mitchell Parker, a writer for Houzz.

He asked me to comment on that age-old problem when people live together of neatness/sloppiness and cleanliness/messiness. How can people get along?

I suggest you read his article which really quite nicely captures my thinking about these issues. In a nutshell, it’s all about communication. It’s not the dirty dishes that create conflict, it’s the failure to communicate about the dirty dishes in ways that resolve the problem.

Most importantly, I discussed the fallacy of the moral high ground in neatness and cleanliness. I admit I might be a bit biased on this issue, living closer to the moral low ground, but the argument is that there is no moral high ground in terms of these issues. Because our culture often values neatness and cleanliness, in arguments the neat person always takes the moral high ground, “I am the one who’s right therefore you should change.” Needless to say this doesn’t usually result in any positive progress on the issue.

I prefer to think of these issues as aesthetic preferences. Just as one person might prefer abstract art on the wall, while another person might prefer realistic paintings, messiness versus neatness is really an aesthetic preference. Handling it this way usually leads to better outcomes in conflicts over these issues. If two people come at the neat/messy conflict from a position of having differing preferences as opposed to “shoulds”, it is more likely that they can come to some sort of negotiated compromise which will be workable.

And treating these differences as preferences has another advantage as well. It usually leads to much more respectful communication about these issues. If a neat person recognizes that their need for neatness is simply a preference, they will not demonize their partner who is messy, calling them a “slob” or a “pig”. In a similar way, if the messy person recognizes that their disorder is a preference, they won’t label their partner as obsessive or a “neat freak.” This makes it much easier to discuss the differences.

The key issue is to apply a sort of flowchart to these issues. The flowchart looks like this:

1.Identify what each of you wants in terms of your home environment. Recognize that these are aesthetic preferences, and not moral shoulds.

2.Identify the ideal state that you would prefer, and also identify a less than ideal but okay state. It’s the latter that you will most likely end up with.

3. Discuss the differences, and see if there is a workable compromise. Sometimes the compromise will not be a simple meeting in the middle, but will instead involve a trade-off. For instance, if one person prefers an impeccably clean house, but the other person is not willing to spend the time and effort to do this, the couple could agree that they will hire someone to come in weekly to clean the house. Or the neater person might clean the house, but the other person agrees to do other life maintenance tasks such as paying the bills, parenting tasks, gardening tasks, or house maintenance tasks. Things don’t have to be perfectly split down the middle, it’s just important that they feel fair.

4. In looking at these differences it’s also useful to see what people are able to do, and what they are willing to do. Willingness and being able to do something are completely different things. As hard as it is to believe, (for the neat person), many messy people actually do not have the ability to be ordered and neat. This seems hard to believe. After all, can’t anybody fold their clothing and put it away? Can’t anybody put a dish in the dishwasher? And of course the answer is yes, technically, but in practice, especially over time, many people lack the skills.

Think of it this way. Technically anybody should be able to exercise every single day of their life and also eat healthy. We all know how to eat healthy and how to exercise. But how many people actually succeed on a daily basis? Very few. We are willing but not very able.

5. Which brings me to my next issue that of willingness. Even if we are technically able to do something, we might not always be willing to spend the time and energy doing it. Time and energy are a zero-sum game. We only have 16 hours of conscious time each day, and actually most of us have far fewer free hours, with work, parenting, relaxation, and other priorities.

Cleaning and organizing takes time and energy, and while some people feel the time and energy is well rewarded others do not. In my interview, I suggested a market-based way of assessing willingness. Although I was speaking somewhat tongue-in-cheek, I suggested that if one partner wants the other to do something they offer to pay them. If I want my partner to wash the dishes instead of leaving them in the sink, what am I willing to pay on a daily basis? And what price would they require to be willing to do this?

This is more of a mental exercise than an actual exchange of dollars. But I know for myself if my partner asked me what it would be worth for me to keep every surface in my home perfectly cleared every single day, I would set the price very high, something like $500 a day. That is because it would take a lot of conscious work in order to keep every surface clear. And it would take perhaps an hour or two every day. My price represents my perceived value for the change.

And then my partner could decide if that was worth it. After all, we make these kinds of evaluations all the time. If our not so new car gets scratched in a parking lot, most of us choose not to spend a lot of money to have it fixed. We accept the scratches and live with them.

6. What it comes down to is very simple. If you want your partner to change some house related behavior, first try to assess their ability and willingness to do so. If they are able and willing then you can try to get them to change their behavior. This will require ongoing discussions and work, and will not be easy.

Or you can outsource the problem. If you don’t like cleaning toilets and you can’t get your partner to do that, pay someone to clean your toilets. Most of us do this in other realms without any issues. We pay car mechanics to fix our cars, we pay gardeners to cut down our trees, and we often pay tutors to help our kids learn.

Finally, you can accept the difference. Acceptance is probably the most powerful tool in dealing with these conflicts. Acceptance frees you to stop wasting energy being angry or trying to change your partner. I’m reminded of one of my favorite quotes, “Never try to teach a pig to sing, it frustrates you and annoys the pig.”

I started this post thinking I would just point to the interview that I did on house, but discovered that I wanted to elaborate on some of the concepts that I discussed during that interview.

Good luck to all of you, these can be difficult issues, and the key thing is to remember to be gentle, loving, and respectful in your communications about these differences. Nobody gets divorced over dishes in the sink, they get divorced because of the way they interact around dishes in the sink.

I’m off to straighten up, or maybe not?


Dr. Andrew Gottlieb is a clinical psychologist in Palo Alto, California. His practice serves the greater Silicon Valley area, including the towns of San Jose, Cupertino, Santa Clara, Sunnyvale, Mountain View, Los Altos, Menlo Park, San Carlos, Redwood City, Belmont, and San Mateo. Dr. Gottlieb specializes in treating anxiety, depression, relationship problems, OCD, and other difficulties using evidence-based Cognitive Behavioral Therapy (CBT). CBT is a modern no-drug therapy approach that is targeted, skill-based, and proven effective by many research studies. Visit his website at CambridgeTherapy.com or watch Dr. Gottlieb on YouTube. He can be reached by phone at (650) 324-2666 and email at: Dr. Gottlieb Email.

Why You Should Never Read Online Illness or Medication Forums, and Why You Should be Skeptical of Google Search Results as Well

The first thing many people seem to do when they get a diagnosis of a physical or a mental illness is to go to the internet and search on that illness. Patients who are prescribed medications do the same. Often the search results lead to internet forums. These forums consist of user-generated content that usually is not moderated or edited by any professional. Anyone can post on these forums. This seems reasonable, right? But in this article I’m going to tell you why, for the most part ,you should avoid reading these forums. And I will also tell you why you should be skeptical of Google search results regarding any illness.

When people read on forums about their illness or medication, they get scared. Many of the forum posts will say that your illness leads to awful and dire outcomes, and that the medications prescribed to you will make you depressed, addicted, or crazy.

For instance, I often treat tinnitus patients. Samplings of the forums that cover tinnitus suggest that most of the people who post on these forums are completely miserable and suffering terribly from their tinnitus.

So what’s the problem here? Isn’t this useful information? Can’t patients learn something interesting and helpful from these forums?

Unfortunately, Internet illness forums often present a distorted, grim, and negative impression of most illnesses and most medications. Why is this? The main reason is because of selection and sampling bias. The groups of people who post on illness forums are not a representative sample of people with a particular illness. Let’s use tinnitus as an example. If you read the tinnitus forums you would assume that everybody with tinnitus is anxious and depressed about it.

But actually, we know from research studies that roughly 20% to 40% of the population experience tinnitus symptoms from time to time. We also know that roughly 2% of people who have tinnitus symptoms suffer psychologically. So the data from research suggests that a small subset (2%) of people who have tinnitus symptoms suffer anxiety and depression as a result of their tinnitus. Most people (98%) with tinnitus symptoms do not suffer significantly or they have adapted over time and gotten over their suffering.

But the forums are full of posts from the people who suffer the most. People who don’t suffer don’t spend their time posting. And people who have overcome their suffering also don’t post. So reading the forums gives a tinnitus patient a distorted and scary view of the experience of tinnitus.

The other problem in reading internet information about illnesses is the way that Google Search ranks and orders search results. When you search on tinnitus, what you might not realize is that Google presents pages in order of popularity, not in order based on how accurate or scientific they are. Sites that are clicked on more frequently will rise up in the Google search results and sites that are clicked on less frequently will fall down. When you do a Google search people typically click on the most shocking and scary links. “Tinnitus caused by alien abduction” will get a lot of clicks even though it may represent a site run by a single person who claims to have been abducted by aliens. Thus the alien abduction tinnitus site will move up in the Google rankings.

Boring scientific sites fall down in the search rankings. That’s because they have scientific names that don’t encourage people to click on the links.

So how can patients get accurate information about their illness or about medication treatments?

One way is to search within scientific and medical sites. For instance, Medscape is an excellent website that offers medical articles about almost every illness. WebMD is another site more designed for lay people, which also offers good information. If you want to search scientific articles you can use the PubMed search engine which searches published research articles.

Let’s do a Google search on tinnitus. Overall, the 1st page of Google results is pretty representative of medical and scientific sites. But the 3rd listing titled “In the news”, is an article “Martin McGuinness tells of misery living with tinnitus,” from the Belfast Telegraph. Pretty grim, you think, misery!

But if you actually clicked through to the article you would get a very different impression because Martin McGuinness actually says that “it had a limited impact on day-to-day life and work and that family, friends and work colleagues were very supportive.… It does not limit me in a professional or personal capacity.” This is a much more positive view than suggested by the title and the Google link.

This is a great example of why the Internet is dangerous. The headline is what’s called click bait, a link that falsely represents the actual page, which is designed to attract people’s clicks.

Forums about medication are also problematic. Many psychiatric medications can have side effects. For most people these side effects are minimal or tolerable and are overbalanced by the benefits of the medications. For a minority of patients, the side effects are not minimal and these are the patients who are over-represented in most Internet medication forums. Also, on an Internet forum you never really know all of the medications the person is taking, the accurate dosages, as well as their underlying illness.

There is one more problem with reading about illnesses on the Internet. It’s one that particularly disturbs me. Many websites, even websites that purport to be objective, actually are selling something. They may be selling a supplement or vitamin, or an e-book or some other kind of program to treat an illness. Obviously, to increase sales, these commercial websites will paint a distorted negative picture of any illness or condition. They may also disparage other more traditional and scientifically validated treatments or drugs. In general, you should be skeptical of any information that comes from a website that sells products or services.

To review:

  1. Take Google search results with many grains of salt. Remember that Google orders search results by popularity not by accuracy.
  2. Beware of Internet illness and medication forums. By and large, they are populated with an unrepresentative sample of illness sufferers, the ones who suffer the most and cope the least well. Reading them will depress you and make you anxious.
  3. If you want to get information about your illness or potential treatments, utilize established and reputable medical and psychological information sites. An exhaustive list of best medical sites can be found at: the Consumer and Patient Health Information Site. Some of the good medical sites include MedscapeWebMD, and MayoClinic. Some of the best sites for mental health information include PsychCentral, NIMH , American Psychiatry Association, American Psychology Association .
  1. Finally, remember that a very large percentage of websites are actually selling something, and be skeptical of information from these sites.

In conclusion, suffering any illness or condition is unpleasant and sometimes scary. Don’t make it worse by consuming information on the Internet in a random way. Be skeptical and selective and remember that Google is not always your friend. Often a good physician or good psychologist can give you clear and balanced information.



Dr. Andrew Gottlieb is a clinical psychologist in Palo Alto, California. His practice serves the greater Silicon Valley area, including the towns of San Jose, Cupertino, Santa Clara, Sunnyvale, Mountain View, Los Altos, Menlo Park, San Carlos, Redwood City, Belmont, and San Mateo. Dr. Gottlieb specializes in treating anxiety, depression, relationship problems, OCD, and other difficulties using evidence-based Cognitive Behavioral Therapy (CBT). CBT is a modern no-drug therapy approach that is targeted, skill-based, and proven effective by many research studies. Visit his website at CambridgeTherapy.com or watch Dr. Gottlieb on YouTube. He can be reached by phone at (650) 324-2666 and email at: Dr. Gottlieb Email.