Oct 12, 2025
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If you agonize over every purchase — whether it’s organic strawberries or a trip to Paris — the 0.01% rule might help put things in perspective.
Essentially, the rule states that it’s safe to spend 0.01% of your net worth on a splurge without wrecking your budget.
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Personal finance author, blogger and data scientist Nick Maggiulli developed it as a way to help people determine exactly how much they can spend on an indulgence without hurting their overall wealth.
It’s designed for people who experience anxiety around spending on even small things. Some may even exhibit a behavior called ‘consumer hyperopia’ — opting to save for long-term goals like retirement, (1) even though they can afford an occasional present-day treat.
It makes sense that a data scientist like Maggiulli would come up with a quantitative yardstick to do so.
Featured in his new book The Wealth Ladder, the 0.01% rule has been making headlines, including a recent Wall Street Journal article. (2)
But while it might work for people who sweat over spending, it might not be the right fit for everyone.
Here’s how to calculate your own 0.01% and what to consider before applying the rule in your own life.
How to calculate your 0.01%
First, determine your net worth by adding up all of your assets and subtracting your liabilities.
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For example, if you have $150,000 in your investment accounts and $25,000 in credit card debt, your net worth would be $125,000.
To make the process easier, you can use this online net worth calculator to do so.
Next divide your net worth by 10,000 to calculate what your daily 0.01% spending allowance would be.
For example, if your net worth is $500,000, 0.01% of that would be $50, meaning you could spend $50 on small splurges.
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The author himself, now COO of investment firm Ritholz Wealth Management, only recommends using this guideline for rare splurges. (3)
In a recent podcast, The Money with Katie Show, Maggiulli gave the example of deciding whether or not to splurge on cage-free eggs or spring for a latte as a treat.
“The idea here isn’t that you should spend this every day,” Maggiulli said
“It’s just that, hey, when this occasional expense comes up, you can just pay for it … You don’t have to think about it. It’s just a trivial expense.” (4)
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Should you use it?
As Maggiulli notes, applying this rule daily could cloud your judgment and encourage unnecessary spending. And that could actually hurt your finances.
If you’re digging yourself out of debt and have a negative net worth, this rule is definitely not an option.
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Given the average American has $6,473 in credit-card debt, many won’t benefit from the spirit of this rule. But it might come in handy after you pay off the debt. (5)
But for those who are anxious about non-essential purchases, this rule could be handy.
For example, when an unexpected expense pops onto your radar, like lunch with friends, you can use this rule to help you say yes without feeling the need to triple-check your bank account.
Hopefully, your net worth will grow along the way, and with it your ability to spend more on little splurges that make you smile.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Medium (1); Wall Street Journal (2); Ritholtz Wealth Management (3); The Money with Katie Show (4); Forbes (5)
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Sarah Sharkey is a personal finance writer who enjoys helping people make optimal financial decisions for their situation. She loves digging into the nitty-gritty details of financial products and money management strategies to root out the good, the bad, and the ugly. Her goal is to help readers find the best course of action for their needs.
