Saturday, October 26, 2019

Spending Money Where It Matters Most

I think frugality is great for some people. But I’m not one of those minimalists that believes you need to pinch every penny. In fact, I practice spending money in the areas of my life that will have the greatest impact on my happiness. So let’s have a discussion on spending money where it matters most.

What matters most to you?

Obviously, you have to figure that out before you know where to spend, right? And this isn’t about what’s most urgent, or the things that currently take up most of your time but you don’t care for. So what makes you happiest?
For me, I enjoy tasty food. I love to travel and the experiences that go along with it. So my money goes toward quality food at home (and sometimes eating out), and travel-related activities.
Here’s how to figure out what’s most important in your life:
  • What makes you happy? And I’m not talking about something that makes you happy at the moment but then you feel bad about it later. Like buying shoes that you can’t afford and having a stomach ache when you get the credit card bill. I mean things that bring you pure joy, like a hobby, or day trips to your favorite beachside town. If you get happiness from something without negative consequences, it belongs on your important list.
  • What are activities that give you a sense of accomplishment or fulfillment? A good example would be work (paid or unpaid, such as volunteer work) that brings purpose into your life and boosts your confidence. Maybe it isn’t enjoyable for you in the typical sense, where you’re thinking about how much fun it is while you’re doing it. It could even take a lot of effort on your part. But when you see the results, you feel amazing. 
  • What are the ideas and activities that you just can’t get enough of? Maybe every time you see an article about scuba diving, you can’t wait to read it. You take a yearly scuba diving trip and you spend the rest of the year thinking about your next trip. Could spending more money in this area make you happier?
  • Here’s a simple way to get an answer: if you didn’t have to worry about money and could do anything you wanted, how would you spend your time?
  • Does it make you feel better physically? If your physical health is in poor shape, it’s that much harder to feel better emotionally. So if you’ve found something that helps with physical well-being, add it to your list of what matters most.

How to spend less money on stuff you don’t need

This thought process may cause you to realize you are spending tons of money and energy on stuff that doesn’t matter to you. But, you feel stuck. How do you cut out that stuff that doesn’t matter?
For some ideas, see my post: 13 Things To Stop Buying To Save Money. The goal is to get rid of only the things you don’t care about, or are non-essential and less important to you. I don’t miss any of the things I cut from my expenses, and I’m very thankful to have that money freed up to use for what matters most to me.
If you’re having a hard time, think about it this way. If you were happy with how things are in your life, then you probably wouldn’t be reading this article. You know that saying, “the definition of insanity is doing the same thing and expecting different results?” If you’re not happy, then something has to change.
So give it a try, and see how it feels. If you start to feel lighter and happier, then you know you’re on the right track.

Spending money where it matters most

Now for the fun part—using your money in a way that matters to you and affects your life in positive ways. Here’s how to do it effectively:
Can spending money in one area support your ability to do it more often? Perhaps you can invest in an education that improves your skills even more. It could be the difference between a hobby or side gig and a career that you love.
Or if you have kids, how about paying for a babysitter so you can go do something for yourself? I don’t have kids, but I have a dog with high anxiety who can’t be left alone for more than a few minutes. Before we had my mom with us, we would hire a pet sitter to watch Tahoe when we had an activity that we wanted to do together. I think no matter how much you love your children (furry or otherwise), everyone needs some time away to focus on themselves. While this may not be spending money directly on what matters, it still contributes to the end result.

Don’t get into spending habits that take the fun out of your experience.

I wrote first about cutting back on other spending because if your money is already stretched thin, then spending more is unlikely to make you happier. Refer back to the bullet point about things that make you happy without negative consequences.
Spend strategically. Instead of blowing all your funds on a single experience, can you break it up into smaller activities? That way you can stretch them out over a longer period, and have a constant influx of happiness.
One final thought. Make sure that you are spending money on things that actually matter to you, and not just what you think matters, or what other people tell you should be important, or what you feel obligated to spend money on. The things that matter most should be your decision alone, independent of the wants and needs of everyone else around you.
If you use this advice to change your spending habits, let me know how it goes!