Maslow’s Guide to Personal Finance

Abraham Maslow was a twentieth century Jewish-American psychologist who, unlike other psychologists of his time, studied happy and healthy people in order to learn what it is that pushes us towards achieving our full potential, what he called “self-actualization.”  He developed what is known as the Hierarchy of Needs, ranging from our most basic survival needs of food, water, air, etcetera to the ultimate goal of self-actualization, whereby an individual, in Maslow’s own words, “become(s) everything that one is capable of becoming.”


While Maslow realized that we do not follow this hierarchy in a rigid manner, whereby we may be working on multiple levels at once and/or finding ourselves more highly motivated to fulfill certain needs before others, I believe that this provides an excellent framework from which we can talk about personal finance.  Specifically, I believe that if we view our financial situation with this information in mind, it can go a long way to getting us on track to achieving our (personally) ultimate self-fulfilling goal…financial independence and the resultant freedom.


Backstory…I started thinking about this article over the past few days after my wife plugged my site in a post she had written on Facebook that brought about my best day of traffic yet.  She recently started a blog of her own, Love, Laughter, & a Splash of Lunacy, and frequently participates on a stay-at-home mothers’ Facebook group; a new member, who is now a stay-at-home mom due to reasons beyond her control, asked how others survive on only one income.  Most responses we read offered advice regarding making extra income doing things such as selling Scentsy candles and the like.  While I hope that visitors to my site from that day took away some piece of helpful information from the few articles I have published, I wish that THIS one would have been written already.  Here’s why…

One of the most powerful things I have come to learn is that decreasing our expenses has a far greater impact on our financial situation than increasing our income to match our expenses.  Decreasing our “needs,” and the subsequent decrease in the amount of money we have to shell out every month for those purported needs, decreases not only the income that we need NOW, but also shortens the timeline and decreases the nest egg we must have in order to reach financial independence.  For a perfect explanation of this concept, please refer to this article by Mr. Money Mustache; it was one of the first pieces of information I read when I began researching personal finance…it has literally changed my life and shapes my family’s path going forward with regards to our goals and how we are working toward achieving them.


When you’re just starting out, developing your very first budget, and (hopefully not) having the horrid realization that you’re spending every dime (or more) you bring home, the first thing you must ask yourself is:  what truly qualifies as a need in my life?  At our most basic biological level, we need food, water, and oxygen to keep our bodies functioning.  Sleep and sex are great, as well, and we need some general form of covering/shelter to help regulate our core temperature in conjunction with our environment.  However, as difficult as most people in modern-day society would find it, human beings have survived for centuries without cars, central air, cable TV, and the internet.  Hell, even I remember before cell phones came into existence.  The earliest device I personally remember seeing was a bag phone that my uncle had bought – analog, mainly static and, best I can remember, it cost about $1500 at the time!

Did you know?  I just learned about something called the Universal Service Fund, a fee that phone companies tack on in order to make phone service affordable to all Americans.  This isn’t anything new and, while it’s all good and well, according to, the funds are now being used to provide free cell phones to eligible individuals, as well.  I am most decidedly not some cold-hearted person who thinks we should all just be left to fend for ourselves, but I honestly find the idea of free cell phones to be ridiculous.  While I do not know or speak for the legitimacy of the following site, check out; if you make it past the first paragraph without losing your lunch, you’re doing better than me.  The first paragraph starts as follows…

“It’s 2015, seven years since the great recession, and times are still tough. Among all your other expenses, you might be faced with choosing whether or not you can continue paying for your mobile phone, if you even have one. Cell phones have become a necessary part of your day-to-day survival, and to be without one is unthinkable. But there is help.” (emphasis added by me)

Are you kidding me?  Part of your day-to-day survival?!?  They make it sound like you are literally going to die without a cell phone.  Maslow died in 1970…pretty sure cell phones weren’t on his hierarchy of needs.

The point is, when you’re making out your budget and figuring out how to survive on one income, how you can more quickly reach financial independence, or whatever other financial situation your may find yourself in, think of Maslow.  You NEED:  food, water, and shelter…every other thing is just fluff.  You may (as I admit I would) be inconvenienced without your cell phone, or sad that you’re not watching the live finale of Big Brother (honestly, my wife and I grew to love that show but we don’t watch it anymore because we cancelled cable months ago – and couldn’t be happier,) but when it comes down to it, you must prioritize where your dollars are going.  Even if it means that you can no longer read (and subscribe!Smile) to my blog, I promise I’ll understand.  As a society, we have become so ingrained with the idea that to attain a sense of achievement and respect of others requires us to follow some preordained path of consumption, prompting us to sell ourselves into financial slavery by having to one-up everybody else with a bigger house, flashier car, or latest device, while financing it all in the process.  I have been guilty of this my entire life thus far.  The good news?  It’s never too late to change.

From a personal standpoint, with regards to Maslow’s hierarchy, I find myself reaching closer and closer towards self-actualization every day.  Our family has a ways to go until we are free from debt (end of 2017-ish), and then a considerable ways further until we reach our ultimate goal of financial independence; doing some rough calculations, I’m thinking that should be somewhere around the time I’m 45 by the waySmile.  However, at this time, my family’s physiological and safety needs are in place, we share immense love for one another and find true happiness in each other’s company.  Spending time with my family and working on areas of personal self-improvement increases my self esteem on a daily basis.  I am fortunate to have discovered a career that I find exceptionally fulfilling and I feel respected by my peers and colleagues.  I have accepted many facts in life, one of which, with regards to the subject of personal finance, is that the entire pyramid could come crashing down at any moment…

While I certainly do not foresee it happening, just like anyone, I could wake up tomorrow to find myself without a job, a pivotal aspect of my capability to provide for my family’s physiological and safety needs, while also holding a key component surrounding my self esteem and identity.  But the fact of the matter is, if that worst case scenario were to play out, I know, without a doubt, that we would be fine.  No doubt, it would be a temporary struggle as we transitioned to a new chapter in our lives, but the essential components of our happiness would remain unchanged.

While I know that I went off on a bit of a tangent with the cell phone issue, I hope that the key takeaway from this post is an understanding of how our perceptions have been manipulated, leading us to classify our wants and non-life-sustaining things in our lives as needs.  We each have a choice to make.  We choose what we spend our money on and each and every choice we make has an ongoing effect on our finances for the rest of our lives.  Every dollar spent today is one dollar, or presumably more if invested, that we can’t spend tomorrow or ten years from now.  Positioning ourselves to need less-and-less stuff allows us to focus on our true needs and what we find important in our lives…each other.


Where do you see yourself in Maslow’s hierarchy?


-Frugal RN


P.S. – Here’s my twist on Maslow’s pyramid for Personal Finance with the pinnacle being Financial Independence, Retire Early:


*Be kind in your critique of my artistic abilities…remember, I’m a nurse, not an artistSmile.

3 thoughts on “Maslow’s Guide to Personal Finance

  1. I love yiur twist on Maslow’s theory and how you find yourself becoming closer to self actualization as many persons think that self actualization is reached when you have everything you could want financially. Looking forward to reading more of your posts.


    • Thank you very much! Learning contentment is incredibly hard, especially in a society built on consumption. No matter how much money one has, it is impossible (in my opinion) to reach a state of self actualization. While I am nowhere near perfect, I try to push myself to be better every day with respect to these ideas.


      • In my opinion, it happens when we stop focusing on our satisfaction of needs and start focusing on our personal growth. From what I read on your posts you are well on your way to self actualization. I respect you views and wish you luck on your journey.

        Liked by 1 person

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