It’s NOT About Dollars per Item, It’s About Total Dollars Spent



These are the EXACT same steps I used to dig my way out of debt, pile up 5 years of living expenses and start my own business (which will earn over $75,000 this year)!

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So I was at Walmart the other day with a friend, picking up some groceries and household supplies to tidy up my apartment (you know, get it smelling all fresh and what not). When we hit the paper towel isle, my friend took the biggest package of toilet paper I had ever seen off the shelf and put it into his cart. “It’s a good deal, and it will last me for months”, he said.


Naturally, when I grabbed only one roll of moderately-low priced paper towels and put it into my cart, he persuasively mentioned how much better of a deal he was getting than me. Thinking back, this same scenario has happened to me, oh.. about 543,657 times in the last few years. When I choose to go with smaller quantities of more expensive things (per item), I get a hard time from my co-shoppers. Am I really as big of an idiot as my family and friends think I am?

Why Dollar per Item Means Squat

Well, as it turns out, I am actually a financial genius (compared to most people) and my friend’s focus, which is on dollars per item, just happens to be completely irrelevant. It’s like Ricky asking Lucy “Lucy, what did you buy?”, and her responding with “Well… I saved a bunch of money…”.

What I’ve managed to figure out is that personal finance is ONLY about money in versus money out, over the long term. That’s all. Nothing in that sentence mentions how “you gotta’ get a good deal on stuff” in order to be successful financially.

The truth is, how much you spend per item just doesn’t matter and here’s why:

It has nothing to do with how much money is coming in versus how much is going out.

Let’s Use Me, 5 Years Ago, as an Example

So let’s make fun of 24 year-old Kraig for a second. Here was my financial picture 5 years ago, back in February 2009:

Income: $30,000 after taxes

Expenses: $28,000

Assets: a college education, a couple grand in the bank and a car worth $14,000 (private party value)

Liabilities (Debt): $17,000 (Car loan: $12,500, Student loan: $5,500)

My financial picture was quite typical of the American middle class back then. I had an average income, an average level of spending (although many might categorize it as poverty level), and an average level of debt (a car loan and a student loan).

But here’s the deal:

My financial situation back then was an ABSOLUTE DISASTER!

Here I was earning a decent income and then turning around and spending 93% of it. Where did the money go to? Well, let’s look to see if I had anything to show for it:

Adding up my assets (my bank account and my car, totaling $16,000), and then subtracting my liabilities (my debt, totaling $17,000), amounted to -$1,000. My total net worth was negative $1,000.

And my net income (income minus expenses) for the year prior was $2,000.

With over 4 years left to pay on my car loan and close to 9 years left to pay on my measly $5,500 student loan, I was at best 4 years or so away from paying off my debt, which would have been February, 2013.

But, then an odd thing happened. I learned how to actually manage my money and in the same period of time, 4 years, I was able to not only get out of debt, but also save close to 5 years of living expenses.

What the heck gives?

Why Total Dollars Going Out Is the Only Thing That Matters

Let’s talk about what DOES matter when it comes to managing your money, which is the TOTAL DOLLARS GOING OUT.

In the summer of 2009, I discovered the single most awesome thing available to us financial independence seekers, Here was a free online program that gathered all your accounts and transactions into one place and easily allowed you to track your income and your spending every month. It was game changing for me.

So, what did I do? I found this section called trends, where it allowed me to see how much I was spending each month.

O… M… G… (as I used to say to poke fun of a pretty great dude named Tony I used to work with). Seeing what I spent every month changed the game for me. Twenty-four hundred dollars a month????? Holy C*A*, I thought.

And I started focusing on nothing but lowering that number each month. I lowered my expenses way down over the course of the next year, to a level of about $20,000/year.

As I got my expenses taken care of, I started making more money (weird how that happened). So naturally, I saved it, since I was only focused on the spending side of things.

The Difference Between Bankruptcy and Financial Independence is in the Spending

As one of the greatest discoveries of the 21st century (right up there with the fact that Pluto isn’t a planet), I’m happy to announce to you today that spending is the only thing that matters in personal finance.

If you want to get the heck out of debt, frickin’ stop spending money. Period.

And don’t tell me that you got a good deal on that crap you bought yesterday. I don’t care how cheap per item it was. The fact is, you spent more money than you needed to. More money came out of your bank account than was necessary.

If you’re in debt and you don’t mind calling your creditors master, then great, go ahead and keep yourself broke by telling yourself you’re getting a good deal. But, if you want to join those of us who don’t need next week’s paycheck and can pay our bills regardless of whether a paycheck comes in at all, then start focusing on what matters… Your spending.


  1. Sure, you’re right that the bottom line is total spending vs. total income. But spending less per item can impact that total spending over a longer time-frame (let’s say 3 months instead of 1 month) as long as what you’re buying is necessary. It’s a tool to use to reduce your total spending.

    Do you really think you would waste so many additional paper towels if you had 12 rolls on hand instead of 1, for example, that it would overcome the price advantage of buying in bulk? But I totally agree that price per item does not matter if you are buying unnecessary items. I think to illustrate that point more clearly you could have picked a better example item than basic consumables – electronics or clothing, perhaps.

    1. Emily,

      It is a balance. As long as what you’re buying is 100% going to be used up (0% waste), then it’s fine to buy “in bulk”. But, overall, I’m not a believer that buying bulk helps lower actual money out, which is the goal (hence the article).

      I actually think my example is just fine. I think you’ll use more consumables if you have a huge stock of it. And I think in many cases, a lot will go to waste. I don’t believe people are as efficient as they think they are in “using everything up”.

      Again, it’s only about actual money out. Not dollars per item. I think having the focus on dollars per item as a way to “game the system” and “make you feel good about spending money, isn’t the right way to approach personal finance.

    2. Sandy says:

      You shouldn’t be wasting $$ buying paper towels. Use rags that you would otherwise just toss out anyway. Toss out the used rags only if they are too bad to wash and use again—and again, and again, etc. Worn out t-shirts are just so dang valuable to reuse.

      I hate HATE HATE tossing out anything. Think instead of spend.

      Comfortably living below the poverty level off this wasteful culture.

      1. Sandy,

        Great point. Thanks for sharing. I knew there was a reason why I didn’t want to buy paper towels in the first place. It does seem incredibly wasteful.

        Happy to hear you’re living below the poverty level comfortably and in style! Many others need to learn from you.

        Take care,

      2. amina49 says:

        I had to get on welfare because I am disabled and I love it. Everyone else I knew that was on welfare hated it. They couldn’t manage to get through the month and they were always broke. I kept my living expenses as low as possible-living in a small room that was fully furnished. It also had a microwave and small refrigerator. Sometimes electric was included. Sometimes I had to pay it. Not much because I only used 60watt bulbs. Thats because I’d buy those goose neck desk lamps for $10. and they don’t take above a 60watt bulb. They don’t look fancy, but they last for years. Sometimes I went without a phone. But that didn’t bother me. Now that I’m a senior, I can get a free phone. And I live in a senior building which is somewhat nicer and fairly cheap. I live way below the poverty level but I’m used to it. Because I lived that way ever since I left home at age 19. Having no job skills and being disabled is a rough way to go in our society. But I’ve made it. I’ve had a happy life. I have lots of friends. Some cheap and free hobbies. Like knitting and crochet, coloring, reading( I use the library) and watching free tv. I have an analog tv and I use a converter box. I never had a credit card. I have no debts. Lately my health hasn’t been so good but I’m happy. I don’t own a computer. I use a friends computer or I use one at the library. I wish you all alot of happiness. Enjoy your free time.

  2. Fast Weeklky says:

    Greetings Kraig. It’s been a while since I’ve seen you write about frugality. Glad to see you’re still up to your old tricks. What might be helpful for the people that struggle with this is to think about all the money they don’t spend……as paying themselves first. Tying a bunch of your capital up in 10 years worth of food and consumer staples doesn’t do much good because it’s not allowing your money to work for you.

    I know from my experience, and it sounded like yours, that paying myself first really incentive-ized me to be much more careful with how I used my capital. Changing my mindset made a big difference in my life and it appears in yours as well.

    1. Hi Bryan,

      You mention “tying up capital” as a bad thing. I do agree however, I don’t see buying 3 years worth of household supplies to be “tying up capital”. I see it as spending money. That money left your bank account and it WON’T EVER be back. Try selling your extra detergent back to the store after two years.

      Even if my money is only in cash, I consider it to be a much better thing than sitting in my pantry.

      Thanks for giving your thoughts on paying yourself first. I think that’s a good strategy for many. For me, it’s all about letting as little money leave my bank account as possible. Simple as that.

      Take care,

  3. Intriguing take! I agree that savings rate (or spending rate) is really the only metric that matters at the macro level. Still, cost per unit is a driver of spending rate. It matters at the micro level. Spending more on small frequent purchases is a losing strategy.

    1. DBF,

      Thanks for stopping by, my friend. It’s a tough argument to make, since it goes against what most finance “gurus” talk about all the time. “Buy on sale, buy on sale”. But how about not buying at all, or buying less? Works for me.

      Take care,

      1. Of course, if buying in bulk causes an increase in consumption, then it’s best to avoid that strategy. But if you are going to use a certain amount of paper towels or t.p. in a year, why not buy the lower cost per unit AND thus pay the lower total cost. The concepts are complimentary, not opposing.

        1. Yes, I agree. I believe in buying up a few extra months worth if the probability of them being used within the year is near 100%.

          I just see too much go unused to be a huge believe in stocking up much of anything.

          It’s a delicate balance. Obviously, lowering the cost per unit is great, but in my experience, many times it increases the total amount that leaves my bank account. So, I stopped doing things that way.

  4. Ashley says:

    Interesting view! I think I am definitely one of those people who wastes more when I have a big stockpile. When i’m running low on something, I do tend to become more resourceful! I need to remember this next time I have the urge to stock up 🙂

    1. Ashley,

      I think we’re alike. Being resourceful when we don’t have that stockpile is a good thing. We save more money that way.

      BTW, your reader Kim stopped by and said she came from your site. Thanks for sending her my way! She left a comment on the post before this.

      Talk to you Friday!

    2. Ashley,

      I think we’re alike. Being resourceful when we don’t have that stockpile is a good thing. We save more money that way.

      BTW, your reader Kim stopped by and said she came from your site. Thanks for sending her my way! She left a comment on the post before this.

      Talk to you Friday!

  5. Bill Smith says:

    How about you ditch the paper towels all together and just use cloth towels? While you will need to do a bit more laundry, it will be much cheaper in the long run.

    1. Bill,

      You’re right. That was probably the point I should have made. Buying just one roll forces me to use paper towels when they REALLY come in handy and use cloth every other time, because I only bought the one roll.

      I’m a cloth user for the most part and rarely buy paper towels (as you can see from the post).

      Take care,

  6. Wade says:

    This is a good topic.

    My frequent trips to Costco perplex me at times. I definitely spend more, but I also get way more and my cost per item is much better.

    I only buy things I know will last and we use often. Paper towels are tricky. I don’t think we use more because I have 12 rolls.

    I don’t think we use more toilet paper either. We have 4 females in the house and just plain use a lot. Ha ha.

    I go in phases where I don’t want to spend any money and then phases where I want to stock up and pre-buy.

    I need to think more about the money out concept.

    Great post Kraig.

    1. Hi Wade,

      Great to hear from you. Hope all is well!

      Yes, it is just a difficult balance between having too much leaving your bank account and getting things for cheap. I just happen to want my cake and to eat it too. I want to buy just what I need now, but I want it for cheap. Hmm… Most of the time, it just doesn’t work that way.

      Take care,

    2. Sandy says:

      Get the females in your house to make and use washable “pee cloths” when at home and you can sure save a bundle. They can easily be made (just cut) from “rags”. Search them on the Internet.

      I absolutely cannot tolerate the disposable aspect of this current culture. Do what you can-With what you have-Where you are. Think instead of spend. It’s sooooo liberating—and profitable!

      1. Sandy,

        Profitable it is. Imagine how much less we can work (and stress out about) when we consume half of what we did before. I love it! It makes big things possible.

        Now, how do we get out message heard by everyone…

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These are the EXACT same steps I used to dig my way out of debt, pile up 5 years of living expenses and start my own business (which will earn over $75,000 this year)!

it's free!
100% privacy guaranteed, no messin' around!