The ’10 Rule’ Helps Keep Your Spending In Check

The ’10 Rule’ Helps Keep Your Spending In Check

When you’re trying to save money, it’s often hard to figure out what expenses really matter to you. You might even spend more time rationalising the expense than you would just buying it. To stop that from happening, financial blog Budgets are Sexy shares the “10 rule”.

Picture: Images Money/Flickr

The purpose of the “10 rule” is to help you make a solid decision about a purchase:

Anything you buy today, your future self is paying 10x as much for. So add a zero onto the price tag, and ask yourself if it’s still worth it. If it is, buy it and enjoy it. If not, then forget it… According to the 10 Rule, if you buy a new car today for $US20 grand, then your future self is paying $US200 grand. That $US800 computer is $US8,000. The $US50 dinner for two is $US500. Karate lessons for $US150/month are $US1,500/month.

If that sounds a little absurd, you’re right. But the point isn’t necessarily to talk you out of every single purchase. The purpose of the 10 Rule is to teach you to really think about each purchase, and assess the value as it relates to you. It’s an interesting approach, and if you find yourself buying a lot of useless stuff, it might be worth putting yourself in this mindset for a little while to train your brain. Head over to Budgets are Sexy for the full post.

The Mighty “10 Rule” [Budgets are Sexy]


  • That’s not true for technology – the stuff you buy today may be obselete in 10 years time so the value may actually be 10x less. So the actual rule is (for technology), remove the last digit of the price and ask yourself if it’s still worth it! 😉

    • You misunderstand. It’s not worth 10x as much – it costs you 10x as much in the long run. I don’t know what they base it on, but if anything, rapid obselecence would tend to make it cost more in the long run, not less.

  • This makes absolutely no sense to me (and I manage my money well). 19x – how do you figure that? The cost if goods increases faster than super, or term deposits in the bank…
    A measure that works for me (but unlikely for others) is “will I get better use in having more money for retirement, or does this add sufficient value to my life now?” … If I say that it will enrich my life now, with minimal expense to the future, then It’s a good deal… Otherwise, no sale. A new car is an instant NO, as an example.

  • Absurd and impractical. Why would my future self have a higher tolerance for spending? How far into the future? Am i applying inflation, predicted salary increase, other expenses etc into the mix? If I reach 80 years of age do I still keep applying this? If i’m spending $100 a week on groceries do I stop because $1000 is too much? What will I have for dinner then?

  • Ugh, if I adopted this approach exactly as stated, I’d never buy anything, ever. Nothing is worth 10x it’s price to me. Not computers, or cars, or food, or rent, or anything.

    • You’d starve to death before paying $20 for a maccas $2 deal? It’s not a system I’d use, but it is obviously intended to help you work out what you literally NEED rather than just want.

      • Well obviously in an extreme circumstance things become more valuable to you, but without being in that extreme circumstance you really have no way of knowing just HOW valuable. I love my car, but I would have never paid 10x for it in my current mindset. Would I pay 10x for it after having to walk to work for a year? Maybe. But I haven’t been there, and I don’t know.
        The point is, in my life right now, no purchase I make is worth 10x the amount.

    • I’d be exactly the same. I can’t think of a single thing I’ve purchased, ever, that I’d be willing to pay 10x for. I’d still be living at home with no car, no new clothes and no technology. Unfortunately this system really would stop a lot of people from buying a lot of things. And the worlds economy needs people to buy things…

  • $100 invested @ 8% with quarterly compound interest will become $1000 in about 30 years.
    I think the message is to make smarter choices with your money and be better off in the future.

  • From the article: “If we take care of our health, and live past the average life expectancy, we’re talking a life of 80+ years and still active. (I don’t know about you, but if I’m not skydiving and doing crazy-ass things when I’m 80, then something went terribly wrong.)”

    Well I don’t know about you, article writer, but if I’m not skydiving and doing crazy-ass things right now because I want to do those things when I’m 80, then something went terribly wrong.

  • 10x feels very excessive to me. I work on the theory that if I get more hours returned in use, than the hours it would have cost me to work to gain that item, it’s worth it 😛

  • My method works better.

    set your bank up to automatically move your money from your main account to a savings account that requires signatory access (so you have to actually go physically to a bank mon-fri 9-4 to get it. when it exceeeds $1000

    then you have your $1000 living money for bills/food/stuff

    Finally never purchase anything ever unless not purchasing it will kill you or leave you homeless/destitute.

    I am a 22yo male and I have already saved enough that I could purchase 70% of a house. Of course I never will as its a waste of my money.

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