Financial advice from Walden Pond

Henry David Thoreau is easy to hate. Between his overly romantic idealism, life brimming with privilege, or the hypocritical holes in his writing, Thoreau is not the flaw-free saint some like to believe. His most famous book, Walden, describes two years of living in a small cabin at a secluded pond near Concord, Massachusetts. Fortunately, you don’t have to agree with Thoreau’s philosophy, to gain valuable insights from his writings. In the first chapter of Walden, titled “Economy,” Thoreau provides numerous practical financial lessons which can help nearly anyone rethink their relation to money, work and time. 

Thoreau’s most valuable insight revolves around the idea of opportunity cost. Rather than calculate how much one product costs relative to other options, he argues that we should think of cost in terms of how much life we lose in order to earn the money to buy a good or service. Thoreau writes , 

“The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.”

(Walden, 30) 

This is not a complicated idea, but too often we isolate price from time. Whenever we buy something new, we are withdrawing hours from our total life span. 

Other writers have termed this premise, Thoreau’s new economics. In his book, Digital Minimalism, Cal Newport describes the simple yet elegant logic to this theory: 

Photo Courtesy of Geo Parlow.

“Thoreau was able to satisfy all of his basic needs quite comfortably with the equivalent of one day of work per week. What these farmers [Thoreau’s neighbors] are actually gaining from all the life they sacrifice is slightly nicer stuff: venetian blinds, a better quality copper pot, perhaps a fancy wagon for traveling back and forth to town more efficiently. When analyzed through Thoreau’s new economics, this exchange can come across as ill conceived. Who could justify trading a lifetime of stress and backbreaking labor for better blinds?”

Substitute modern luxuries, such as a bigger house, cruise vacation or boat for Venetian blinds and you’re left with a very compelling reason to work less. 

Indeed the very notion of what is necessary changes over time. Despite rising standards of living, Thoreau argues that basic necessities have changed very little: 

“For the improvements of ages have had but little influence on the essential laws of man’s existence; as our skeletons, probably, are not to be distinguished from those of our ancestors.” (10)

 Despite improvements in technology, what we need to survive is rather basic. Rethinking what is truly necessary from a pure survival standpoint, gives people agency to disrupt consumerism. Rather than viewing the spending habits of previous generations or our peers as normal, Thoreau encourages people to conduct a radical inventory of their lives and purchasing habits. 

Living below your means has always been good financial advice. Yet Thoreau’s thinking gives individuals unique power to shape their lives. Rather than working more or seeking a stressful promotion, people can, in some cases, simply readjust their spending habits, preserving more time outside of work. When describing a salesman who spends his days selling baskets, Thoreau remarks how, 

“Instead of studying how to make it worth men’s while to buy my baskets, I studied rather how to avoid the necessity of selling them. The life which men praise and regard as successful is but one kind.” 

(Walden, 18)

Facing pressure to pursue high paying or high status jobs, many students jump directly into flavorless lives. This pressure is understandable; student loans and bills are not going away anytime soon. Even Thoreau didn’t figure out a way to avoid work entirely. Nor should he have. Work can be extremely rewarding, but by making smart financial decisions, satisfying, yet lower-paying jobs may remain in reach. 

Thoreau’s furniture from Walden Pond

While many people take aim at Thoreau today, his detailed tracking of expenses — what he ate, how much and the cost of used building materials — makes it hard to dispute his economic claims. Yes, he may have grown up with unique advantages, but for two years, he lived the life he praised. For Thoreau and others, tracking expenses can provide a helpful way to see just where your money is going. Perhaps you’re not willing to give up certain luxuries, but Thoreau makes clear that the more you can do without, the more of life you have to live.