.Net Programming - Financial independence

How to Use the “Just-in-time” Expense Theory

I’ve wanted to write this post for a little while now because I think this subject is way underrated and helps a lot with optimizing your finances for financial independence. In fact, a “just-in-time” way of spending might seem counterintuitive in a world where people constantly talk about buying in bulk, points cards and credit card rewards.

The main reason why it took so long to come up with this post was because I didn’t think I had enough quantitative information to justify the use of this method. I figured out I’ll write it anyways so you’ll have to trust my years of experience using it.

Just in time expense theory dépense juste à temps

What is this theory exactly?

The “just-in-time” expense theory is based on two principles :

  1. Keep the maximum amount of money at all time
  2. Simplify your finances and question all expenses

Like pretty much everything else regarding financial independence, it doesn’t need to be complicated to work well! The main goal is to buy stuff only when explicitly required. The theory is that if I pay for something, even at full price, only when I need whatever object or service, I save long term by buying most likely less and by keeping more money for emergencies, to invest or towards my goals. At the same time, reducing my overall financial risk.

Principle Number 1: Keep the Maximum Amount of Money at All Time

First, I always take the option to keep the most money in my bank account. That is, for example, if I know I eat only one pack of sliced ham a week and one costs 6.50 $ but two cost 10 $, I take one. That’s because I go to grocery only once a week and because I know that chances are better that I’ll either get sick of eating sliced ham after a week or simply waste the second pack. Also, this keeps 3.50 $ extra in my bank account. One last thing is that we tend to eat more, the more food we have and fail to be imaginative with what’s left in our fridge to come up with new recipes.

If you see an object on sale, chances are it’s going to go back on sale soon and if you don’t buy it, you keep that money to go towards most interesting things or towards your investments. The object needs to be required now in order to buy it. You can’t pay a month of rent with a new pair of shoes that were on sale if you didn’t need them absolutely, in other words, objects cannot be divided or put into cash without losing some of their worth. Keep your cash as long as you can so it can be directed towards useful or mandatory expenses.

Another example would be that good old “Costco”, not my favourite if you ask me. Why? Because first you need to pay a membership fee which tricks your mind into buying there and the second problem is that you are required to buy in bulk. This, again, stores your money into objects also known as the pockets of Costco which limits your investing potential and reduces your tolerance to risk because you have less cash on hand. I challenge you to try one month at Costco and one month at the grocery store using this theory to see that you’ll be keeping a lot more by buying in smaller quantity with the second option.

OK, you want an easy way to start using this technique? Ask yourself the question: do I need “name of the object or service” right now or can it wait? If the answer is yes I absolutely need it, chances are that it’s a justified purchase. Not buying just-in-case items will keep more money in your pockets if ever something really important happens or if you want to invest. If you think about it, a cash rich business can survive longer in case of emergencies in the markets like, for a totally random example, a pandemic would hit the world. This might even save this business from bankruptcy so why wouldn’t we manage our own finances that way?

Principle Number 2: Simplify your Finances and Question All Expenses

Points cards or credit cards with points entice you to spend more or even worst, spend more at specific places because of points. Not having any of those will keep things simple in your finances and give you the freedom of choice. When things get too complex, it’s difficult to manage where money goes. For the overall work required and the small (if not negligible) savings you get from these reward programs, I’d say stay away from all that crap and focus on your life goals instead.

By simplifying I also mean reducing the number of expenses. This will give you a brief overview of where your money goes, at a glance and at all time. You’ll then know quickly if you can spend extra money or where you are in your budget. In fact, an expense should always manifest itself over obvious reasons or because of your life goals (what’s the most important for you). For example: I like apples and need to eat to stay alive so I’ll buy this bag of apples. It’s possible that some expenses will require a more complex thought process like buying a car because you can’t just buy a 25 000 $ car like you would buy a bag of apples, I know it`s obvious yet a lot of people get in the dealership and come out with a brand new car on the same day.

Buying stuff using logic rather than your emotions is to keep in mind at all time if you wish to use this theory. That doesn’t mean you cannot justify buying discretionary products, for example if you really like cars and want to use one for travelling, seeing your family and the like. Maybe buying a car is worth it, but try to apply the same logic on a second one then, isn’t there another way around it? Considering the potential impacts of such an expense on your overall risk and the two to more years it will cost you in your financial independence goal might or might not be worth it. Does it really align with your goals is the question to ask yourself.

To summarize, if you keep your finances simple and in order, it’s going to be much easier to control where the money goes and focus on your life goals. Which is a lot more important and fun than keeping track of your expenses. Then, with simple finances and less clutter in your life and your space, you’ll have no problem implementing this theory.


The “just-in-time” expense theory is based on keeping more money for yourself to invest, put in your emergency fund or towards what you really want to focus on in life. By buying only what is necessary right now and keeping more cash on hand, you’ll find yourself with less things you don’t need and the capacity to pay in case something really important comes up. In addition, simplifying your finances will help because you’ll be able to, at a glance, know how much you can spend and to be confident in the logic behind every purchase you make. This technique is implemented a bit differently for everyone I found, but you’ll find what works best for you and be able to live a happier life while reaching financial independence quicker.

Good luck in your quest to financial independence and a more enjoyable life!

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