If you’ve spent much time splashing around in the pop-psych-pseudo-philosophy internet, you’ve probably heard the story of the professor and the jar of rocks. If not, cozy up to your glowbox for a retelling (informed by this and this, but with our own little spin).

The probably-apocryphal story goes a little something like this: A professor began class one day by placing some unusual items on a table at the front of the room: a handful of big rocks, a pile of pebbles, a small bowl of sand, and an empty jam jar. (Yes, I am outing myself as a magnificent weirdo who has a small collection of shiny pretty rocks; this should not be a surprise to anyone who knows me.)

The professor took the big rocks and placed them in the jar. “Is the jar full?”

The class said yes, it was full. The professor then started adding some of the small pebbles to the jar. He jiggled it around a bit to help things settle.

“What about now, y’all? Is the jar full?”

The class chuckled and agreed that yes, the jar was indeed (still? again?) full. (I’d like to think the smart students knew where this was going.)

The professor took the bowl of sand and carefully poured it over the contents of the jar.

“Ok. I’m not gonna insult you by asking again, but I think we can all concur that this jar is definitely full.”

The professor carefully disassembled the contents of the jar. He held up one of the rocks. “These big things are the most essential parts of your life. If you lost everything else, but still had or did these, your life would be full. Your essential relationships; caring for your well-being; your values. You don’t compromise on these.”

Then he grabbed a few pebbles. “These things matter too; this might be your classwork, or your job, your hobbies, your efforts to accrue wealth. They’re still very important, but if you had to choose between the big rocks and the small rocks — between your most important relationship and your job — it would be an easy choice, and you wouldn’t regret it.”

Finally he lifted up the bowl of sand. “This represents the little stuff. This can mean many of the material things in your life, and it can also mean things like Netflix, news scrolling, Instagram, TikTok; I’m not here to judge what you enjoy. But if someone offered you a free trip where you’d go spend a few days with someone you cared about, doing one of your favorite hobbies, you wouldn’t spend much time thinking about the sand.”

He poured the sand back into the jar; then he added the pebbles. By the time he was done, the big rocks could no longer fit inside.

“Many of us, myself included, spend our days like this. We drift into putting the little things first. Heck, I reach for my phone first thing most mornings. But lately, I’m trying not to. Because that’s the thing about little things: it’s okay when they fit in around the big stuff. But if you’ve ever had to ask for an extension on a paper because you got sucked into an algorithm… your sand’s taking up space where your pebbles should be.” He raised his eyebrows and looked meaningfully at a couple of students. “And if you’ve ever been so anxious about your grades that you ran yourself ragged and got sick because you were working too hard… your pebbles got in the way of one of the biggest rocks of all, taking care of yourself.”

The class was silent.

“To be clear, there is absolutely nothing wrong with working hard. And there are even times when you’ll be called to surge, temporarily, and go above and beyond — for work, for school, for something else that is legitimately important to you. But it’s important that you know what your big rocks are and build your life in a way that puts those things first most of the time. Then, you’ll know the difference between occasionally making an exception, and when you’ve drifted into regularly allowing a pebble — or worse, a pile of sand — to displace one of your bigger rocks.

“Know what your big rocks are. Know what your pebbles and your sand are. Make sure you show up for your priorities first, because the little things will usually find a space to fit into. And if they don’t, you won’t miss them nearly as much.”

Cool story, Hansel. What does that have to do with personal finance, exactly?

Well, besides the generally helpful message of “know your priorities and build your life accordingly,” the jar of rocks works pretty well when thinking about financial organization, too.

When we think about our spending, it’s easy enough to think in big broad terms, like “not enough” or “too much,” “late” or “early,” “less than my paycheck” or “more than my payment.” But when I work with my clients, I try to help them identify their most essential priorities first. If you don’t figure out how much money needs to be reserved for those things, it’s possible that regular smaller things can make it hard for your big rocks to fit in your jar in a given month.

And then you might wind up carrying a credit card balance that costs you interest, or posting a late payment that dings your credit score. We don’t want that.

You’ll hear this general approach called different things by different people — the “four walls,” the “noodle budget.” Whatever way of thinking about it works for you, the big rocks = the minimum necessary spending that protects your household’s core well-being and earning capacity. To us, core well-being means essential physiological and safety needs: adequately housed, fed, clothed, safe from the elements and danger, and able to get necessary medical care. Earning capacity means the stuff that lets you do the job that pays your bills, like childcare, a functional car, or a stable internet connection. In our definition, the big rocks include these core categories:

Housing.

Mortgage or rent, taxes, critical maintenance, HOA/COA dues, and homeowner’s insurance.

If you fail to pay any of these, you could lose the roof over your head or your home could be unsafe to live in… which is a definite core well-being hit. Although we recommend having renter’s insurance for most renters, it’s probably more of a pebble. (That’s the nice thing about being a renter: you’re paying someone else to deal with the expense of critical maintenance.)

Utilities.

Electric, gas, water, trash, phone, and internet.

In our world, internet has quickly become an essential utility for most people. Depending on your individual situation, if you really needed to cut back you might be able to drop wired internet for a little while and just use your phone’s data, but we know that’s not practical for everyone.

Transportation.

Essential vehicle costs, auto insurance, gas, service and tires, registration, parking, public transportation, and rideshares.

Vehicle costs are so tough, because you can rationalize almost anything into this category if you try hard enough. A functional and safe way to get you and your household to and from work, school, the grocery store, and medical appointments = essential to your core well-being and earning capacity. It’s a need. We can all agree there.

Fulfilling that need with a new luxury vehicle = supergluing a pebble onto your big rock. If you become a new parent, you don’t immediately need to get a late-model three-row SUV or minivan. (Unless you’re having triplets — but even then, the car doesn’t have to be new!) A bike is a vehicle, but if you’re not using it for transportation, it’s discretionary. Having more cars than drivers is discretionary. Mr. Fortuna loves buying new cars, but he clearly recognizes the “new” as discretionary; we have also paid cash for the three cars we currently own, which ensured we bought within our means.

The vehicle decision matters more than just whether or not you can afford the payment, because in most cases, it’s more expensive to insure and register and maintain a more expensive vehicle (or collection of vehicles), and those expenses are non-optional once you own the car (or else they have the potential to turn into way bigger expenses, like fines and uninsured crashes). Buying more car than you can comfortably afford can superglue a lot of pebbles onto a big rock.

Spending on gas, public transportation, and rideshares can creep across the line from “big rock” to “pebble,” too, depending on where you’re going. If you spend $50 on a tank of gas that takes you hiking in the mountains, that’s a pebble. If you take public transpo or a rideshare to a concert or a night out, that’s a pebble. And pebbles are great! But see them and celebrate them as such.

I know it can be hard to shred these expenses out, but if you wind up in financial stress, it’s important to make the distinction between expenses that you could afford to forgo and expenses that are critical. All big-rocks expenses are in service of your household’s core well-being and earning capacity, and you can decide what that means for you.

Health.

Health insurance, prescriptions, copays, dentists, eyecare.

Things like gym expenses or important-but-not-critical services are tricky here, because they are really good for our health! And yet… in our household, we would cut back on chiropractor visits and Pilates classes for at least a little while if it meant choosing between those things or paying our utility bills on time. Again, you can be the judge of your own situation here.

Food.

Groceries and restaurant* spending.

Controversial opinion: for most people, I don’t think grocery spending moves the “financial wellness” needle enough to stress about. (If you’re regularly making lobster paella and truffled wagyu beef but struggling to keep the lights on, ok, we should talk. And also, can I come over for dinner?)

This, again, comes down to your best judgment. If you feel like you have room to trim some of your grocery spending, and doing so doesn’t add an unpleasant level of stress to your life, that’s great. There are certain financial gurus who like to shame people for their food spending. I personally don’t like to shame my clients about food (or anything else; you are precious and worthy of compassion in all things). Figuring out your rocks isn’t about saying what is “good” food spending or “bad” food spending so much as identifying what is your truly necessary food spending. Food is intimate, emotional, and often medicinal. For instance, when your body tells you that you desperately need to eat a big pile of fresh fruit, nothing else will do… even if you’ve sworn to live solely on ramen until your credit card is paid off. So it’s wise not to set your baseline too low.

Second controversial opinion: for many people, cooking at home isn’t always that much cheaper, in time or energy, than getting affordable dinner from a restaurant. If you’re exhausted and pressed for time, ordering takeout from that place you like with huge portions might give you back the time and energy (and leftovers) that you need to deal with your family, your job, your second job, or your desperate need for a good night’s sleep. And I’ll note that in a partnership, the domestic labor of cooking and cleaning can fall disproportionately on one partner in a way that is much unhealthier for everyone than just getting some tacos. Again, we’re identifying your realistic baseline, and it is ok if that baseline includes some restaurants.

• *The big asterisk for restaurant spending: there’s a huge difference between affordable, casual restaurants and high-ticket special occasion places. There’s also a huge difference between an entrees-only meal ticket and a meal that includes drinks, appetizers, and desserts… and there’s a bigger difference still if those drinks are boozy. It’s an open secret that restaurants make most of their biggest profits on their beverages and non-entree items. If you need to shrink a rock, how and where you order can have at least as large an impact as how frequently you let someone else do the cooking. We have been known to put high-ticket meals in a different “pebble” budget category — usually “Gifts” — if we go out someplace fancy for a special occasion, and I recommend a similar tactic for anyone trying to figure out their actual minimum food spend.

Basic clothing needs.

This is one of the categories that can be tricky to stick a number to, but when an urgent situation arises, clothing can be elevated to “big rock” status. To protect your core well-being and earning power, you (and members of your household) need sufficient clothing that fits your body and the situations of your life and health. Pretending otherwise just adds financial shame to an otherwise stressful situation, and this is a no-shame zone.

If your weight has fluctuated and nothing fits, or if you got a new job with different dress requirements, or if you have relocated to a place with an entirely new climate, or if you are in a medical situation that presents a clothing challenge… you will need new clothing. If the essential clothing you have becomes unusably damaged… you will need new clothing (or possibly to pay for a repair). If an influencer tells you that your favorite jeans are no longer cool… don’t listen to them, you’re cool exactly the way you are.

Spending outside of basic, essential clothing needs can be perfectly ok if it fits your priorities and your situation, but it is a pebble.

Essential child expenses.

As we’ve discussed before, kids are expensive. (The latest estimates peg the birth-to-age-17 cost of raising a child at $310,000.) And despite the incredibly valiant efforts of many amazing parents to prove otherwise during the 2020-2022 timeframe… it’s really not sustainable for anyone to work while they’re simultaneously caring for children (nevermind that it’s straight-up-impossible for many jobs). Childcare, formula, diapers and wipes, clothing and shoes to replace outgrown stuff, safety/transportation items (like car seats), kid-specific food needs… you can try to economize where you can (I see you, my thrifters, gifters, and consignors), but there’s some kid stuff that just costs what it costs.

Again, the kid items in this category are for physiological and safety needs. If you’re unsure whether an expense rises to that level, ask if forgoing that expense for any period of time would be unhealthy or unsafe for your child — for example, sports might be great for your kid’s health, but if you need to take a season off to make ends meet, they’re going to be ok.

Other caregiving costs.

If you have a family member whom you currently support with ongoing essential health care costs (senior care, home health aide, etc.), this is also a big rock.

Pets, if you already have them.

I am not going to tell you that your furbabies aren’t a big rock. They’re amazing and precious and essential and part of your family, and caring for one is very nearly non-negotiable… once you have chosen to become a pet owner. But a pet that you don’t have yet is not a big rock (I’m sorry). Once you have a pet, the love that you have for that animal will make it nearly impossible not to spend $3,000 on the lifesaving surgery that they might require if they eat a few of the neighbor kid’s Nerf darts, and I want you to be ready to do that!

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If you don’t have a pet yet and you want one… and if you have financial stressors and cannot manage your pebbles, or find yourself struggling with your big rocks, and you don’t have a cash emergency fund established… consider unfollowing the animal shelter social media accounts until your situation stabilizes.

Why your big rocks matter so much

Your big rocks should be the first things that you identify when you’re creating your budget. They should be the last things to go if you need to pinch pennies. If you know how much your “big rocks” cost, you have a number that is incredibly useful. You know how much money you must make as income. You know how much money you need to save for a two-month sabbatical. You know how much money is the minimum for a six-month emergency fund. You know how much potential extra you can put toward any debts you’d like to get rid of, and how long that might realistically take.

Because big rocks are so important, big rock decisions are also really important. It can be really hard to budget around a mortgage or rent payment that eats more than 30% of your income. Choosing where to live is, in itself, a big rock decision with ripple effects that can save or cost you in different ways. A large car payment is a big rock that might have seemed fine right after your tax refund landed, but it might not feel so good in November when you’re holiday shopping. Choosing to hold onto your phone for an extra year instead of upgrading, or opting for a lower-cost phone, can keep that phone bill “big rock” small enough for a year or two that you can boost your savings rate or pay off a nagging credit card balance, and that can move the needle on your financial wellness by a surprising amount.

The elephant-shaped-jar in the room

That’s all well and good for some people, you might be thinking. But what about if my jar is too small? What if there’s literally no room outside of my big rocks? What if my big rocks don’t even fit?!

In an age of nearly-historic wealth inequality (believe it or not, it was worse in 1928; let’s not think too hard about the implications there), this is sadly not an uncommon problem.

The elephant in the room here is that diligent budgeting is simply not going to solve everyone’s problems. Although traditional budgeting is barely necessary for the wealthy, I would argue that a basic level of personal financial awareness is still a good thing. (In 2014, Rihanna almost went bankrupt, and sued her accountants for mismanagement. She settled with the accountants for a reported $10 million, and now she’s a billionaire. Even if you can afford to pay accountants, your own financial knowledge is essential to make sure that your financial professionals are doing their job in a way that serves you!)

But… you can be unbelievably frugal by every meaningful standard, and still not be able to budget your way out of poverty. At that end of the scale, increasing your income is the single most meaningful thing you can do to improve your financial well-being, and I recognize that can be easier said than done.

I wish I could personally solve economic inequality, but until that particular good idea fairy pays me a visit, I consider myself to be in the business of harm reduction. Making an unjust, difficult situation better with whatever’s in your power is a problem we can work on. And knowledge is power, even if the knowledge doesn’t feel like great news at the time.

Knowing exactly what your big-rocks number is can tell you how many hours you need to pick up at your second job, or how much of a raise to ask your boss for… and that can help. If you’re at a transition point where you have the opportunity to change the size of your big rocks… that can help. If you’re in a position where a few small changes in your financial priorities can give you a little bit of breathing room, and you can use that breathing room to knock off a small monthly payment… that can help.

A bunch of little things that help can add up to big change, and it all starts with knowledge. Regardless of how big your jar is, knowing your big rocks is really important. If you would like help with this — or anything else in your financial life — let’s talk.