Wealth and the Art of Spending
Adhering to a strict budget can be exhausting. There are obviously benefits to being mindful of where your money is going but, much like a diet, restricting yourself for too long can lead to unwanted splurges. IT can be hard to get back on track afterward.
The solution? Don’t spend less, spend smarter. Put aside money for the purpose of treating yourself and your loved ones.
Incorporating this “fun money” into the budget helps you avoid feeling guilty about spending it.
What’s Worth Spending Money On
Do the work to determine what is routine expenditures, and what is a splurge for yourself.
This is more than just getting your hair cut regularly, purchasing clothing, or enjoying date nights out with yourself, friends, or your significant other.
A splurge should be an enriching experience that, for whatever reason, you might have second thoughts about spending money on.
Experiences Worth Spending On
- Continuing education
- If there’s a degree you’ve always wanted to earn or a skill you’d like to develop, invest in yourself! Have you always wanted to learn how to code, speak a foreign language, or fly a plane? Enroll in a course today. You deserve to learn new things and have new and memorable experiences. If you’re not sure how you’ll finance these experiences, look into financial aid options if need be, or save up over time. And who knows? Maybe investing in your education will result in a financially beneficial change in your employment.
- Health challenges at your workplace, gym, or community center
- One of the best ways to stay on track with fitness goals is to surround yourself with like-minded people. Spending money to join a support group for a healthy lifestyle will be worth the cost. You’ll develop healthy habits with the encouragement of your peers, and will learn about proper nutrition and exercise practices to carry with you throughout your life.
- Hiring out personal or professional tasks
- Have you thought about the value of your time? If so, you might realize that you’re better off spending your time doing some household chores or administrative work rather than others.
For example, let’s say your family finds joy being involved in extra-curricular activities.
This means you’re spending a lot of time shuttling kids to practices and watching them participate in games or performances.
As a result, you don’t have as much time as you used to prepare meals every night.
The value of you being in attendance at your children’s activities is probably greater than the value of you staying home to cook a meal.
So, consider investing some of your money into meal delivery services that simplify dinners.
Or maybe you’re great at keeping up with indoor housekeeping, but don’t want to sacrifice the time it takes to get the yard looking as good as you’d like.
Prioritize your spending so you can hire out the mowing and use your time doing other things of value.
The same goes for your professional life; where is your time best spent?
If your skills lend well to organizing operations, see what you can delegate to someone else so you can maximize that strength for the success of your business.
Sure, you might save money cleaning your office yourself every week, but could your time be better spent doing other things?
It may be worth investing in a cleaning service so you have more time for other experiences that grow your business.
“Changing the way you spend your time is the route to happiness, but we often look at money as the ultimate endpoint… [ask yourself] ‘Is saving $10 or $20 worth the trade-off in terms of time?’” Elizabeth Dunn, December 2, 2013 interview with theartofdoing.com.
- Experiences
- When you ask your grandparents what they have loved most about their life, they’re probably not going to say they loved the flat-screen TV one of their kids insisted on buying for them so they could feel like they were at their favorite sporting event. They will, however, probably bring up memories of attending those games in person when they were younger. Our experiences shape us and last a lot longer than material things. Spending your wealth on vacations and experiences is definitely worth the effort.
Items depreciate in value the minute you purchase them. Especially in our technology-driven world.
A bigger, better, faster option is available after you’ve dropped significant money on version 1.0. Behavioral experts Elizabeth Dunn and Michael Norton recommend investing in experiences instead.
Although intangible, experiences never lose value. If anything, they get more valuable as time goes on and you continue to learn from it and reflect on it.
- Hobbies
- Much like spending money on vacation or experiences, spending money on your hobbies is another good investment. They can help you grow as a person, learning what you’re truly capable of. It can help you develop a social circle, and even offer business opportunities. Also, whether you’re playing poker, pickleball, or painting, hobbies are simply fun. And we all deserve that in our lives. What’s the point of earning money if we aren’t going to enjoy it?
Examine why you have an unspoken limit for the amount of money you’ll invest in yourself. Are you worried about saving for a rainy day? Well, start developing your financial plan so you can feel better about spending now.
How to Practice Smarter Spending
What can you do to change your mindset about spending?
We live in a time of instant gratification. With a tap on a screen or the swipe of a credit card, we can have that item we believe will bring us happiness.
What if, instead, we made ourselves wait to purchase something? If you still feel a pull toward the item or experience after a few days, revisit the purchase.
This can help you realize whether or not it’s an impulse buy or something we’re genuinely interested in. This practice of waiting can help you learn to spend with intention.
Start saving now, perhaps in a 401(k), or 529 education account. Regularly contributing to accounts like these ensures you won’t have access to the money until a predetermined time, allowing it to accrue interest for its intended use.
You also won’t be tempted to dip into the funds for other expenditures, whether necessary or not.
Think about what makes you happy, and plan your saving and spending to allow you to have as much of it in your life as possible.
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Category: Financial Education
