The Awareness Ladder


I have this hypothesis that everyone lives their life based on their current level of awareness.

Have you ever seen articles with titles like:

“10 things I wish I knew in my 20’s?”


“10 things I wish I knew in my 30’s?”

Well to write the first article you have to be in your 30’s. To write the second article you have to be in your 40’s. When people get older they acquire more knowledge, more experiences, and more wisdom to draw from. They increase their awareness.

Your awareness dictates how you live your life each day. It dictates how you spend your time, energy, and money. If you are not aware of the power of compound interest, you will have no reason to save. If you aren’t aware of the idea of appreciating assets and depreciating liabilities, you’ll always opt to buy a new car instead of investing in an index fund. Your awareness will dictate how you spend your money.

I like to imagine there exists an awareness ladder with hundreds of different rungs that people live on.

Anyone below you on the ladder seems like an idiot: How do they not know about the power of compound interest?

But anyone above you seems weird: Look at them living on $20,000 per year, what a deprived lifestyle.

The farther away someone is from you on the awareness ladder, the more absurd their lifestyle seems. This means it will be incredibly challenging to convince someone further down the ladder of the benefits of your way of living. Likewise, someone higher up the ladder attempting to convince you of the merits of their lifestyle will seem like an oddball.

Awareness and Happiness

In regards to happiness, I’ve noticed a common trend: the more aware people become of what brings them happiness in life, the more frugal they tend to live.

A great example is Mr. Money Mustache and his family who live on $25,000 per year. To the typical American, this lifestyle seems absolutely absurd. If he has the money to spend, why on earth wouldn’t he spend more? Most people are not on his awareness rung. They haven’t come to the same realizations that he has on how to live a meaningful life. 

Another example is the minimalists. These are two guys who preach the message that to live a more meaningful life, we should own less stuff. For most Americans, this idea is ludicrous. But only because they haven’t reached that rung on the awareness ladder yet. They haven’t made the connection that more stuff is not correlated with more happiness.

Or consider people who live in tiny houses like this couple:

From the outside looking in, most people would jump to the conclusion that they’re out of their minds. But they’re simply on a different rung of the awareness ladder. They’re aware of exactly what they need to be happy.

This brings up another trend I’ve noticed: we only consider someone’s way of living “weird” if we haven’t tried it ourselves. Most people who are quick to call the minimalists a bunch of weirdos likely haven’t tried minimalism themselves.

Climbing the Ladder

Often when we make the leap from one rung to the next, it’s because we became aware of a different way of living and were willing to give it a try. We chose to downgrade our house, or start biking to work once a week, or start planting our own garden in order to buy less groceries. All of these little actions seem a bit weird to the people we used to share a rung on the ladder with. They have a hard time comprehending why we would choose to change our way of living…but only because they haven’t tried it themselves.

The more aware we become of what makes us happy, the less we attempt to buy happiness and the more we learn to create happiness.

This is precisely why people higher up on the awareness ladder are able to spend less without forfeiting happiness – they build a lifestyle that doesn’t require excessive spending to be happy.

As I mentioned earlier, people who are older tend to be higher up on the awareness ladder simply because they have had more time to develop their awareness of what makes them happy. But you don’t have to sit around and wait for years to develop more awareness. There’s this thing called the internet and any type of knowledge you could possibly seek can be instantly at your fingertips.

Want to learn how to efile your own taxes? Plant your own garden? Build a tiny house? Google it.

Want to know what minimalist living looks like firsthand? Hop on YouTube.

Want to know easy ways to save more money? Or earn more money? Check out the thousands of personal finance blogs online.

Want to know the real science behind happiness? Head to your local library and pick up some psychology books.

We live in a time where we have no excuses for not developing awareness. The only thing that can hold us back is fear – fear of trying new ways of spending our time, energy, and money. 


To climb the ladder, you don’t have to go sell your house and start biking everywhere tomorrow. But you do have to be willing to try new ways of living. Try biking to work one day a week. Or try to sell one piece of furniture in your house you rarely use. Or learn how to cook your own food so you don’t have to eat out so often.

Try, try, try. That’s the only way to climb the ladder and test what works for you and what doesn’t.

There are no excuses to stay on the same rung of the awareness ladder forever. Go learn. Go increase your awareness. Go climb the ladder.

I strongly suggest using free financial tools like Personal Capital to track your net worth, spending habits, and cash flow to help keep an eye on your money. The more you track your finances, the better you get at growing your wealth!

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13 Replies to “The Awareness Ladder”

  1. I agree. I am now on the rung that says – I need less stuff. It is slowly transforming my life, and my thinking. Aged 61, it’s probably a bit late, but better late than never.

    The other ladder analogy that I have used is about the impact of education/experience on your work choices. The further up the ladder you are, the more choices you have. You have the choice of jobs at the level you are on, and all the levels below it. You can choose the terms of how / when / what you work. At the lowest levels you are at the beck and call of short term hiring, lowly paid work. Further up, you can choose your work, work from home, part-time etc.

  2. Inspirational post! I’ve seen those Tiny houses shows on HDTV. The homes are really cool and creative. I’m not sure if I can take this step right now. I guess one excuse is that we have a lot of family and we go to each other’s houses often so it may not be that guest friendly. However I did recently sell an extra car I had.I wish I had the “awareness” to do this years ago, but better late than never…..or when it depreciates even further lol.

  3. Good way at looking at this ideal. I just watched the Minimalist Netflix documentary today actually!

    I have slowly been building up to this idea of less stuff. I have a few collections of ‘things’ (records, baseball cards, etc.) I have been lowering the amount of items, but keeping the ones that give me joy or value.

    Luckily I have always preached to buy value and that price isn’t the main focus but value of the purchase is the real cost. Unfortunately, that still led me to too many items that I bought on value. I do not need the multiple dress shirts, candles, or picture frames just because they are on sale.

    It is all about life value now and that has really been the starting point for my transition to less things and higher on the awareness ladder.

    Thanks for the post!

    1. Good for you! I have had a similar experience lately – I’m really trying to zone in on keeping only the things that bring me a huge amount of joy and value in my life and letting the rest go. Thanks for the feedback 🙂

  4. In some ways I agree, but I wonder if reality is a bit different. I.e. Perhaps there are ladders going different directions and sometimes people wholly change ladders at random. For example your climbing the ladder of your career and you decide it’s not for you, so you jump to a completely new ladder. Sometimes you start on rung one, sometimes further ahead if your previous level of awareness helps. I.e. It’s not an entirely linear journey.

  5. Shoot – I read this last week and just realized I never commented which is just as well as now I can add this…Congrats on the RSF feature!! As you know, I’m a big fan of your work so I am happy to see when you get recognized in the PF community.

    “Your awareness dictates how you live your life each day. It dictates how you spend your time, energy, and money.” – this pretty much says it all. When I started long distance hiking I finally realized how little I needed to travel…and survive. About 5 years ago I started translating that to my day to day life. Now when I travel for work (and vacations) I only bring a backpack but it has all of the essentials I need. When I walk on the aircraft to meet my co workers they often ask if I am just doing a turn (out and back) and they are often shocked when I say I am with them for 3 days. “Where are your bags” is always the next question followed by shock and horror that I only have the backpack. My style of packing makes me a circus freak at work, but it works for me. I know who I am, what I need, and all the fluff I can live without all because I am aware. 10 years ago I carried all the crap my coworkers did (MINIMUM of roller, backpack, & foodbag – often far more!) and I can honestly say I never used half the shit I carried. I do not miss those days, but it does make me wonder…what will I carry 5 years from now?

    1. That’s an awesome analogy! That’s hilarious because I used to overpack consistently when I went on vacation…then I took two international trips to Japan and Costa Rica and realized that I needed WAY less than I thought, even for extended trips. I think after enough traveling something finally clicks where you realize that you only use a few items on each trip, which brings up an another analogy – if we need less than we think while traveling we probably need less than we think in everyday life as well! It’s minimalism at it’s finest. We hardly even realize that we only use 10% of the stuff we own. I’ll have to patiently stick around for another five years to hear your update on what you will be carrying then 🙂

  6. It is often true that people who live simply are happy, but it’s not always true in reverse. Let me challenge you on that point. Truly happy people know that the state of happiness is completely divorced from “stuff,” and that focusing on the acquisition OR the avoidance of “stuff” are both consumerist mindsets. After all, you’re still making it about…stuff. There are genuinely happy people who are wealthy and poor; who are fat and thin, who like to own lots of things and who live simply; who have traveled wide and far and who have never left their hometowns; who are single and who have large loving families. The key to happiness is rarely about making external changes at all (although that’s the self-help industry’s favorite marketing tactic!) but cultivating your joy from inside.

    1. I absolutely agree with you. Joy and happiness can be completely independent of external circumstances. I’m simply making the observation that people who tend to truly become aware of what makes them happy often realize that “stuff” has very little correlation with their happiness so they’re more willing to part with their stuff. But I agree with you, happiness looks different for everyone and we all find it in our own unique way. There’s no golden formula for happiness that everyone can apply in their life.

    2. I think the point is that there is a huge number of people who think that having lots of stuff will make them happy. Many of them eventually realize that that was a mistake. There are very few people, however, who start out thinking that they don’t need much in the way of material possessions to be happy and then decide that that was a mistake and they really needs lots of stuff in order to be happy.

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