The Power of Money is Relative

What could you do with an extra $100 a month? Your reaction to that question has a lot do with how much you’re used to making. You see, the way you feel about money is relative.

We’ve all seen the “What is rich?” debate rage. There are those who swear that $250,000 a year is just barely getting by, and those who think that’s utterly ridiculous, because of course bringing home $250K big ones is rich, no matter who you are.

But it’s all relative. I’m not going to get into the debate, but I do hope to make you think.

Take that extra $100 a month

Does it seem like a lot to you? Or like no big deal, something that wouldn’t move the needle at all? Or somewhere in between?

Depending on where you’re at, an extra $100 a month can have a huge impact. Enormous. An extra $100 can mean eating good things. Letting your kid join activities. Actually making big progress on debt. Having some kind of a cushion. Replacing a worn out tire. Getting shoes for the whole family. Taking an overnight trip. Buying medication.

Perspectives change

Once you get beyond just barely making ends meet though, perspectives change. You might find yourself cutting back and thinking that something is “only” going to save $100 a month. But an extra $100 a month is still a lot. If you’re no longer (or never were) living paycheck to paycheck, it’s good to keep in mind what an incredibly lucky thing it is to be able to even think a sentence like that.

When you have enough

Things used to be different, but now when I think of what I can do with an extra $100 a month, I think things like “put it toward the mortgage”. And well, that’s pretty much it. Because I already have enough to cover the basics, and getting the mortgage paid off early is my big goal.

I don’t have to stress anymore about making ends meet, and that’s a very good thing.

Way more than enough

For some folks on the opposite end of the scale, $100 might be something that could be left as a tip without thinking it was any big deal. To my way of thinking, when $100 goes from being “a lot” or “a nice amount” to “not very much”, that’s rich.

What do you think? Do you think of money as being relative? Sure, $100 is $100, but the impact it can have on your life varies.



  • Sure, money is money, but who would turn down an extra $100 if there were reasonable prospects to get it? Sure, it’s only .48% of a $250,000 salary… but $1,200 a year is definitely real money.

  • Money is money, but we do see it in the colored-relative glasses and it works the same for spending too. For example, we go out of the way to save $10 on gas. But if two car dealerships 1 mile apart differ in price by $20 we won’t take the trouble to go to the other one, because $20 out of $20000 car is nothing, but $10 out of $30 tank of gas is a lot. Technically it is double the savings but we see it as a % of the purchase price and decide it is not worth it.

    • Good point, I hadn’t even thought about that but that kind of thing has to be pretty common. I guess at least I’m consistent though, because I don’t go out of the way to save on gas ;)

  • An extra hundred would do nothing! Even an extra thousand would do nothing unless it were each and every month. If I had an extra thousand I would invest it.

  • @krantcents, while it isn’t as good as $1000/month investing a $100/month is a lot better than nothing. If you started early enough investing $100/month would be significant due to compound interest.

    >, I think things like “put it toward the mortgage”. And well, that’s pretty much it.

    Given how low mortgage rates are, why not invest the $100 instead? You could always invest outside a retirement account and if your returns are better than the % rate on your mortgage you could pay off the mortgage earlier than if you put the extra $100 directly into the mortgage payment.

    It could also serve as a 2nd tier emergency fund, as most investments will be far more liquid than home equity.

    -Rick Francis

    • Yeah, I could invest it instead, but right now my biggest goal is paying off the mortgage. Doing so is going to make it pretty easy to do the things we want to do very inexpensively. (And I do still invest a good portion in retirement funds.)

  • Who wouldn’t want an extra hundred? If it’s too little for you, give it to someone else. It could mean a meal for a whole month. The satisfaction you get from helping someone else will probably make you happier than spending it yourself.

  • I am about to be getting almost $600 extra per month! For the last year, we have had friends or relatives staying with us for free (something we were happy to do). We managed to stay in our budget even with extra electricity use, extra food costs, etc. Well now, we had a friend move in with us and he’s paying rent, AND paying a set amount a month in food costs…
    And just a couple months ago we cut our cable from $150/month to $50/month! I haven’t had a chance to truly factor this in to my budget yet, but it seems like a windfall.
    Truth is, 100% of the rent money will go directly into savings for future house projects- we’ll need to replace all of our windows this spring/summer, and there’s so much more we want to do. We may actually be able to fund it all.

  • Being grateful and satisfied with what you have is your insurance for peace. And, it usually leads to receiving more. I say this because I know many people who make loads of money and are not happy and always want more. They are in debt and they are making 6 figures. If you don’t know what to do with your money, it doesn’t matter how much you make because the money controls you and not the other way around.

  • Sam

    I like that perspective! When $100 is not much. I’ll have to think about that as $100 can buy me a lot of burritos.