Pay What You Want

Let’s say you go to a restaurant somewhat regularly and each time you go, you spend about $10 on your meal. One day, rather than receiving a bill, you’re simply directed to a box on your table that said “pay what you want for this meal.”

How much would you put in?

Would you put in anything at all? Would you put in the usual $10? Would you put in less than that? More? Does it depend on the specific circumstances in your own life at the moment?

What is that meal worth to you?

The interesting part is that this is really all about negotiation. When a restaurant puts a price on the menu, they’re telling you what value they expect for the meal. You can either accept that value or simply go elsewhere.

Now, let’s say you prepare a meal at home. You choose what meal you want to make. You also choose what ingredients you want to use and how much labor you want to put into it. The end result? You pay a much more reasonable price for your meal.

The lesson here is simple. The more you do it yourself, the better the bargains are and the more your spending is in line with what you value.

The same principle holds true with, well, almost everything. Take The Simple Dollar, for instance. Almost all of the people who read The Simple Dollar pay nothing for the articles posted here – I make income from the site indirectly through sidebar ads and other writing opportunities brought on by what’s posted here.

But if I place a “Donate” button here…





… almost no one will click on it (yes, a few of you will, and yes, a few of you are awesome). Why? It’s a better bargain not to donate if you can already get it for free.

This is because of the same principle listed above. A blog like The Simple Dollar is a great value in seeking personal finance advice. Because readers “did it themselves” and sought out multiple sources of information, they found that a free subscription to The Simple Dollar provided more bang for the time and money investment than a subscription to an expensive personal finance magazine.

(Of course, I could change that value structure by charging for it, and some of you might continue to see the price as a good bargain for you, but many of you would not. Or I could write a book with new material not given away for free and some of you will choose to purchase it to accompany the site – again, a different alignment of value for your dollar and for your time.)

So what’s the point? The more you “do it yourself” and seek out lots of solutions to your needs in life, the better value you’ll find. If you just stop with the first option – say, a restaurant or a DVD series purchased off of an infomercial – you’re probably not finding the best value. Keep searching. Make a meal at home. Visit the library. Read some blogs.

If something is important to you, keep seeking value and you’ll find it. It’s a journey that constantly rewards you with better and better value for your dollar and for your hour. Good luck.

If you enjoyed reading this, sign up for free updates!

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. brad says:

    ah, the lagging economy finally brought an end to the era of “you can donate by buying me a board game”. though i admit, the introduction of the donate button was very smooth. also, coming from someone who wanted to give you a few bucks ($2.75 range), thanks for finally getting rid of the “you can donate by buying me a board game”.

  2. marta says:

    Incidentally, do you want donations or not?

    I am sorry, I get a bit confused — why have a donation button at all (on this post and on the About page) when I can spot on the right, under Donations/Gifts: “Although I appreciate the gesture, I don’t accept donations.”

    Which is it?

  3. brad says:

    oh snap marta, i was wrong. now its the era of “buy me a board game and/or donate $$$”. that’s what we call marketing GENIUS.

  4. marta says:

    Just to be clear, I don’t see anything wrong in having a donation button. Some of my favourite blogs/websites have one and will do a donation drive every now and again. This is normal for any site that requires a lot of time or resources to maintain.

    Difference is, they are pretty straightforward about it.

  5. Anna says:

    The sign of your page says “Although I appreciate the gesture, I don’t accept donations. However, if you would like to support The Simple Dollar or send me a gift of some sort, please visit my wishilst at Funagain Games (since board games are our family’s primary form of entertainment). Previously, I gave out my address and people would sometimes send me strange items, so I have ceased that practice. Alternately, you can give a charitable gift to Jump for Joel.”

    I’m not sure if the Donate button is a joke or not. Lately you have been very wishy washy about your opinions, turn off your cable but get a subscription to a video game, don’t donate money to me, here is a link to my paypal.

  6. Steve says:

    One of my investment / saving strategies is to not spend money on investment magazine subscriptions, newspapers or books. I guess that also applies to web sites and blogs in this changing technology environment for information.

  7. Jules says:

    I’m a little confused…do you want people to donate, or not? I mean, I can’t donate money anywy (no credit card) so it’s a moot point for me, and I assume that the Donate button was more to prove a point rather than for actual donations…or wasn’t it?

    As for the “Pay What You Want” principle, museums especially do that already. I usually put in $5 or $10, depending on the museum–less than the price of normal admission, but enough to help the museum out. I’m not sure how much I’d pay for food, though.

  8. Robert says:

    I use to go to a barber that charge $12.50 for a hair cut, and the ones before him charge same thing.
    I have new barber who is really great at cutting hair and I been going there for about a year now.

    he charges $10, but i pay him $13.00. I figure the others charge more and were not that good, but the new barber is much better and his place is a much more freindly atmosphere.
    so i feel he should be paid more for his service, so I give more.

    http://rjcleaningservice.com/

  9. greg says:

    I just donated a (simple) dollar. It won’t make you rich, and it won’t make me poor ;-)

  10. Jan says:

    I donated just a little because I’m between jobs and I’m cutting my spending. That said, I donated because this blog is important to me. I’ve been incredibly frugal my whole life and made fun of for it. Or bought things I didn’t want that were, IMO, insulting clutter by people who decided to take pity on me rather than wrap their minds around my being happy living frugally. Trent’s blog is a weekly reminder that I am not deranged and I’m not alone in choosing to have an old car, no TV, and little interest in eating out. Thank you Trent.

  11. Claudia says:

    Sounds like the S.A.M.E. (So All May Eat) cafe here in Denver. http://www.soallmayeat.org

  12. Kestra says:

    I usually read and don’t comment, but I have to disagree with the following:

    “The more you do it yourself, the better the bargains are and the more your spending is in line with what you value.”

    Not necessarily. Perhaps I value paying someone else a fair wage to do something that’s difficult for me to do, or I don’t care to do. Perhaps I value supporting a (local) business, even if I could do the thing myself.

    There’s lots of things I certainly COULD do myself. Growing my own garden comes to mind. But I’m not in a position to spend that kind of time or money right now. There’s a great local business that delivers organic produce to my door. Yes, it’s more expensive than the grocery store. More expensive than a garden (if you don’t count having to own property and/or a vehicle, which isn’t always a given, but helps). But I am quite happy to pay for this service as it is in line with my values and priorities.

    There are many other examples, but I just had to point out that “decreased spending” does not always equal “in-line with values”.

  13. Jen says:

    My theater company generally makes Thursday nights pay-what-you-can nights. This time we’re thinking of trying out “come as you are, pay as you go” nights where we collect the money after the show instead of at the door. It will be interesting to see what happens.

  14. Angie says:

    To me, the end of this article almost sounds like Trent going to start charging for some content… not sure if that’s what he means, though.

  15. Anna says:

    I pretty much refuse to use any website that charges so if Trent starts charging a fee, even $1 to view his site, I’ll just find another website to view. Lately the content has been pretty confusing anyways, turn off your cable but join a video game network.

  16. blake says:

    if you start charging to view your content will you start spell checking??

  17. tentaculistic says:

    Thanks for the chance to donate Trent! Usually I’m too cheap to pay for a website, but Simple Dollar is a big old exception!

  18. Sam says:

    I feel as though if he *didn’t* want donations, he would have just posted a button that went nowhere. Or a picture of a button.

    The whole article feels like an advertisement: “Here’s a donation button, and I also have a new book coming out!”

    Reading it again, it’s saying “I give you a lot of value, so please donate.”

    It’s fine to say “I post two articles a day, you all have free access to the archives, we just had a child, donations would be very much appreciated if you can give them.” Beating around the bush doesn’t seem terribly effective, and actually alienates me as a reader.

  19. J. O. says:

    Guys, gals – don’t get your knickers in a knot. The donate button is not a real button. Trent isn’t charging anything. He just used a PICTURE of a donate button.

    Sheesh.

  20. Courtney says:

    Uhh, J.O. – did you even try to click on it? It takes you to the paypal page for “Donation to The Simple Dollar.”

    Sheesh.

  21. Kat says:

    Actually, I find that his articles are very helpful. In fact we sold a car thanks to an article on using Craigslist to create an ad. Do I think I should have to pay for everything? No I don’t but I think this site is a fantastic source of financial information. I have directed my students as part of assignments to read certain articles. You can ask for anything you want in life (donations, price on a meal, price on a car, etc.) but unless someone is willing to pay it, it doesn’t mean a hill of beans. 2 cent :) ^ agree no need to keep your panties in a knot.

  22. Chris says:

    Actually, the donate button is a real button. Click on it and see where it takes you. I think I may be done with this site due to lack of content lately. Haha, donating money to read about how to save money..

  23. Mike says:

    @J.O.: If it’s not a real donate button, why does it open up paypal for trent@simpledollar.com?

    I’m personally fine with it, but don’t try to pretend it’s not a real button. ;)

  24. Tony says:

    I’m hoping he intends to keep the donation button. There’ll be plenty of people who won’t donate, but I’m all for kicking some money his way; Trent’s helped me a lot. Getting paid directly for all the time he’s invested seems fair.

  25. Angie says:

    No need to be defensive. It just sound (to me) that Trent was feeling out charging for some content. My opinion, no one need agree with me. My panties are just fine, thank you!

  26. Patty says:

    Did you see about the new Panera “pay what you want” restaurant that was just in the news this week? I’m assuming thats what sparked this post.

  27. David says:

    Foes
    of what’s cooking
    see no worth
    behind it.
    Those
    that are looking
    for nothing
    will find it.

    Piet Hein

  28. Sam says:

    @J.O.- It is a real donation button. I don’t think I’d be willing to pay for the content on this site. I come mostly for the comments because I usually find them informative and I like reading different perspectives about things. Personally I find the writing on this site to be weird and somewhat bland with an overuse of certain words. I also feel that Trent’s absence from the comments makes the site feel somewhat cold. I enjoy sites that include the author’s voice in the comment section – either reacting to criticism or discussing things said by the readers.

  29. JP says:

    Listen to what Gary Vaynerchuk says in regard to his book Crush It. People told him that no one would buy what he’s already said, as ‘internet people’ already got it for free. He dubbed something else called the ‘Thank You Economy.’ That is to say, people will buy your book as a simple thank you if nothing else. This is true, I will buy your book for this reason. I bought six copies of Rework and gave them to strangers for this reason, despite all of the same material being free on 37 Signals blog. I wanted show my gratitude.

    Start withholding your content and you risk your position as an expert. You sacrifice brand for potential money. It’s a long-term losing proposition. For those of you who disagree, go watch Gary Vaynerchuk’s videos. After awhile, you may agree.

    -JP

  30. Gretchen says:

    Where can you go (not fast food) and get a $10 meal?

    I find the whole post confusing.

  31. Trent Hamm Trent says:

    As I’ve said many, many times, I will never, ever charge for any content on The Simple Dollar.

    My non-participation in the comments section is because my comments usually derail an otherwise-entertaining and worthwhile discussion. I read the comments several times a day, but I view the comments as (usually) a place for YOU to have your speak. If I constantly came in here, I’d just disrupt discussions and it would become just a platform for my own self-promotion (which I suppose is what this comment is) and I have no interest in that.

  32. marta says:

    @Trent: you still haven’t answered the question: do you accept donations or not? (that’s not the same as directly charging for content)

  33. Jane says:

    I live in St. Louis where they are doing the Panera “pay what you want” restaurant, and I am curious how it will work. They intend it as non-profit. All profits will go to local charities. We’ll see how much people give once they know that.

  34. Leslie says:

    I just made a donation and feel very good about being able to do so. Not only do I feel that the content on this website is incredibly valuable, but I actually have available cash and am not living paycheck-to-paycheck due in large part to the wealth of information contained here. You go, Trent!

  35. Lee Miller says:

    I clicked on the donate button because I feel that you do provide a service that provides value to me.

    I did have a problem making a donation because it took me to PayPal where I do have an account, but I could not figure out how to direct a donation to you or your website. I will try again later. You truly do have a valuable web site.

    Lee

  36. Trent Hamm Trent says:

    I would prefer not to have donations. Sometimes people do wish to send me things of various kinds and I used to give out my mailing address to those people until I got some weird stuff in the mail. Now, I’d just rather not have anything at all.

  37. Trent Hamm Trent says:

    “I live in St. Louis where they are doing the Panera “pay what you want” restaurant, and I am curious how it will work. They intend it as non-profit. All profits will go to local charities. We’ll see how much people give once they know that.”

    I honestly don’t think it’ll make much of a difference. I think it will fail for the reasons I explained above. People seek value and given time, they will seek to maximize their value. When you can pay whatever you want, the price quickly goes to zero.

  38. marta says:

    Ok. If that’s true, why don’t you simply remove the donation buttons on this post (you could have used just a picture linking to something other than Paypal) and on the About page?

    The path of least resistance, you know. ;)

  39. prufock says:

    Another reason for low donations, and probably a big exodus of readers if you DID start charging, is that finance blogs are EVERYWHERE these days, and much of the content is cross-referenced. Why would they pay for it here when they could get it elsewhere for free?

  40. Hi Trent,
    In reference to your donate bar good luck. We started http://www.womensave.org over 5 years ago and have had a donate bar up since. Since our inception we have had $50 donated by my daughter’s first grade teacher. We had successfully located $1850 for her she did not know about and was able to claim and very happy. Our site has been on ABC News twice since we have helped people recover over 3 million dollars successfully that they have used for everything from basic needs like feeding their family to travel to investment. We have taught thousands of people how to do things like feed a family of 4 on $50 a week and make the most out of what they have. We believe strongly in the site and throw a lot into it. We have paid for all the research, stamps, letters, computer, internet labor etc and it has been a great detriment to our family. In the long haul it has actually hurt them where we did not have enough $ to pay for our own basic things so we have cut back a lot of who we notify that they have money or the classes we do which is a shame. Before a homeless lady used her money to rent a home and another her tax credit to feed her kids. That is why we were there to help people but we needed to break even and come up in the hole month after month. It is SO frustrating. With your donate button you should offer a no ads perk for those who donate 25 a year to you. When I read your stuff I don’t care about tips to burn belly fat ad or other ones that have nothing to do with what you are talking about and would prefer the streamlined version and it would be worth the couple bucks a month for it.

  41. Jeff says:

    Thanks for the message in your story. I often stop to think and make a deliberate choice between convenience and immediate gratification and saving money by looking a bit further, negotiating or doing something myself to save money.

    I’m interested to see how this restaurant works through their experiment. Would be even better to see if some people paid more to make up for a perceived lack of paying by others!

    Seems that a lot of the posters above me chose to take a different message than I did.
    For those of you that think this story is about the possibility of charging for content here, or trolling for donations. Read it again.

  42. Robin Crickman says:

    An interesting counter to refusal to pay anything
    for items when payment is voluntary is public radio. My local Twin Cities stations are bragging
    about having just completed a successful fund drive
    and gotten 100,000 people to contribute to their
    support. I wonder why these radion stations are
    different?

  43. Russell says:

    Thanks, Trent! I hadn’t articulated it like this before, but this exactly why I roast my own coffee and why I want to brew my own beer.

  44. Immortal3 says:

    If Dave Ramsey can charge for access to a message board, I see no reason why Trent couldn’t ask for donations for the site.

  45. J. O. says:

    @ Sam – you’re right. My failure to click. But in my opinion it’s still not an issue. Donate, or don’t.

  46. Tall Bill says:

    This is not the first time Trent has spoken about donations. Some time back, discussion took place about ads or not. I donated then & got a quick Thank You. I’ll be watching how this one turns out and act accordingly. This is my favorite site & keeping it fresh and going is important to many.

  47. A basic concept to grasp, yet so few of us dow hen it comes to money.

    I try to get this into my thought process whenever deciding on just about anything.

    That is, the question, Can I do all of it, or some of it, myself?

  48. Jane says:

    “I honestly don’t think it’ll make much of a difference. I think it will fail for the reasons I explained above. People seek value and given time, they will seek to maximize their value. When you can pay whatever you want, the price quickly goes to zero.”

    That was my initial thought as well, but my husband seems to think that people will give more. He’s read several studies which say that such methods do work. Plus I think that there is an aspect of social pressure that will probably lead people to just pay the normal price for a Panera sandwich (here’s it’s known as the St. Louis Bread Co.) or even more, since it goes to charity. Of course there will be people who go there just to pay less for their meal, but they chose a location that is in a wealthy area with lots of business traffic. I think the assumption was that such a location would raise more money.

  49. Lou says:

    I wanted to see if the button was real; I clicked the button & gave a small amount ($1.50 for those who care), based not on what the material is worth to me personally, but on a vague sense of what would be a decent return on Trent’s time, effort and effectiveness if everybody who reads regularly contributed periodically.

    I enjoy this blog although, since I am geriatric and retired, I’m in a very different life-stage from Trent; What I like are his thoughtfulness, integrity and values. The grammatical and idiomatic differences between my geographical region and his don’t worry me. (again, for those who care, I’m an urban Northeasterer)

  50. Bill says:

    I read your blog daily, however I usually just skim your ramblings and head for the comments sections. I’ve learned a great deal from the regular readers. I am in favor of a donate button, I do not want to pay $20 for something I don’t want so you can net $2 by buying a advertisement. I would much rather just give you a couple of bucks. Last time you brought this up was after Henry pulled your string and you quoted how you had proof how your normal reader was a financial loss. Yet I’m sure when you quote your daily page views to potential advertisers you include us daily viewers who don’t click threw to your advertisers.

    Please add the button.

  51. Nate says:

    Good post! As money and our tracking of it becomes more fluid this sort of concept should really start to take off. I think the biggest block are consumers being used to being sold to ALL THE TIME. We constantly have our guard up so it’s a hard concept to start ‘micro-donating’ in a free-will way.

    I love the idea of paying the creator directly. I would rather pay for music once I know I like song and I believe most the price will go to the artist. I was more apt to ‘pirate’ software and music before when I felt the corporations got most the proceeds. Now that it is easy for the creator to go direct, we should as consumers start to micro-donate to these sources.

    I’ve recently started envelope budgeting and have noticed that if I have some money in an ‘entertainment’ envelope I’ll be much more likely to happily send a few bucks to authors that have really helped because in my mind that is play money. Your regular book reviews are a pretty valuable service that has helped me spend book dollars smarter AND prevent some of that. Since we are fairly like-minded, I trust your reviews and appreciate the time savings.

    I do intend to donate freely as my situation improves, in part to what I’ve learned from you, and also to a few other writers. Would be nice to have that as a toolbar button with a pulldown to donate in ‘one-click’… I could envision budgeting like $10/month for that and give in increments of $0.25. Then come back and give more if one REALLY impacts my life in a positive way. Sorry bout the long post, I like this idea very much! Thanks for bringing it up Trent!

  52. Wil says:

    It has been mentioned before, but museums do the donations thing and they do quite well. Could they do better? Maybe. Some people donate more because they see others who don’t. I think this is a great way to work, but it relies too much on the integrity of the customer. Hopefully honor starts meaning something again so that this method becomes more wide spread.

  53. jaimeo says:

    “I read your blog daily, however I usually just skim your ramblings”

    Rude.

    “Another reason for low donations, and probably a big exodus of readers if you DID start charging, is that finance blogs are EVERYWHERE ”

    A) he knows what he is doing B) blogs of this quality are by no means EVERYWHERE

    “I pretty much refuse to use any website that charges so if Trent starts charging a fee, even $1 to view his site, I’ll just find another website to view.”

    Amazing. Not even a dollar? Why bother to read something that is worthless? Key point here: there is no other TSD to go to, hence why it is successful.

    “Lately the content has been pretty confusing anyways, turn off your cable but join a video game network.”

    Confusing because you agree with one bit of advice but not the other?

    “Personally I find the writing on this site to be weird and somewhat bland with an overuse of certain words.”

    Weird (dictionary def): Of a strikingly odd or unusual character; strange.

    Bland (dict.) : Having little or no distinctive flavor

    Interesting mix of characteristics there.

    Overuse of certain words? Let me guess…dollar…hour…savings…shares…review.

    ———————————————–

    I am amazed by how many simply rude people there are. I have never even commented before though I read the articles and the comments daily.

    No wonder Trent does not participate in the comments…

    I understand this comment has a high chance of being deleted rather than posted but even if it is please PLEASE Trent realise that some of us are quietly grateful for ALL that you post, we may not think you are right 100% of the time but we certainly know you work hard, you do your best to give us great content and 99.9% of the time we learn something from your articles.

    That is all

  54. wanzman says:

    After talking incessantly for the past few months about doing what you love all the time, not worrying about money, not putting up with “real jobs”, etc., it seems odd that Trent is now relying on us folks with “real jobs” for money.

    I guess having a job is not so evil after all. If Trent had all the money he needed/wanted this post would have never came about.

    You’ve spent the past several months basically berating your readers, and now you are asking for a handout? Nice try.

    I thought you were alreayd living the lifestyle of your dreams?

    I honestly believe that most of what is said on this blog is completely a lie and a farce combined with hypocrisy.

    You shouldn’t buy new expensive cars (even though Trent does).

    You should do what you love and not waste your life on a traditional career (just count on others to fall for tricks).

  55. DOTTIE says:

    Trent
    I really enjoy your comments. I read your blog for what YOU have to say whether it is in your blog or the comments. Reader’s comments can add additional valuable information pertaining to your writings, however the information and insight that you provide are the #1 reason I read your blog.I read several other blogs regularly and your comment section is the least appealing to me and I usually just skim through it quickly for additional edification. Your blog is my favorite because of the information you provide and the values and honesty that you convey.

  56. jaimeo says:

    Just to add my interpretation of the donate/dont donate thing on the site:
    This is what I think Trent is saying…

    Yes, you can give cash via paypal.
    No, you cant see me weird items (or items of any kind)…if you are really hung up on the idea of giving me something non-cash give me a boardgame or make a charitable donation to my recommended charity.

    Thanks

  57. Nadine says:

    @Trent:
    If I had to buy financial magazines (that consist of at least 40% advertisements) instead of reading your blog, it would have been far more expensive than donating 5 USD here ;-)
    Keep up the good work!

  58. Emma Skinner says:

    Whoa, all this hate is over the top! Trent simply put it there to see what happened, geez nothing to lose sleep over.

    Back on topic, what if the pay what you like restaurant had a menu which quoted the cost price of the meal? Then any profit is at the customer’s discretion.

    I would pay 20% profit, I think, and go up or down depending on the quality of the overall experience.

    Imagine a divided ‘pay tray’ where you put coins in for atmosphere, service and food etc!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>