Frugality is non-linear

from blog Scattered Thoughts, | ↗ original
Most people have a mental model of budgeting which is roughly linear. If you spend half as much money, your money will last twice as long. As you approach zero spending, your runway goes up to infinity. In this model, the space of options looks like this: [I am an interactive graph made of javascript!] Return on investment =  This model is wrong. It's wrong because your savings grow over time. If you change the...