Why Spending Isn’t as Bad as You Think

When it comes to personal finance, the motto is always “save, save, save.” Spending is reserved only for debt and necessities. But is spending really all that bad? You have to live a little (YOLO and all that). As long as you’re not taking a page out of Lady Gaga’s book and spending $50,000 on a ghost detector, the world probably won’t come crashing down if you buy that book you want or treat yourself to dinner.


Why Spending Isn’t Always a Bad Thing

Experts will tell you that the path to wealth is to be generous with your savings and conservative with your spending. That’s generally a good rule. Some take it to the extreme. Dave Ramsey says you should buy a house with cash (no mortgage) if you can, but who really can do that? Probably not first-time buyers.

Saving is good and you should have a budget that you follow, but what if your goal isn’t to buy a house, or a car? Maybe you’re happy renting forever (and that’s okay), and you may live in a city where you can walk or take public transportation everywhere you need to go.

Your spending habits should be based on your personal and financial goals. In order to reach those goals, you may have to spend money:

  • Buying a home will give you a return on your investment (10.6% on average).
  • Traveling will enrich your life and bring personal joy (a priceless benefit).
  • Hobbies encourage personal growth and may even become a source of side income.
  • Education can lead to better job opportunities and personal development.

As long as you’re still on track to reach your goals, that’s really all that matters.

Decide How You Want to Invest in Yourself

This comes back to your goals. How do you want to invest in yourself? Maybe your goal is to travel the world. Maybe you’re learning to play an instrument or how to paint.

All three of these examples require you to spend money, but you get personal enrichment, growth, and pleasure in return.

So, first, decide how you want to invest in yourself, and then you can start working on how to fit that spending into your budget.

Have a Spending Plan and Budget

It really is okay to spend money on things you really want. The trick is to have a spending plan and a budget.

The budget is the most important thing because you’ll know exactly how much you have to spend.

Having a spending plan is more about figuring out your values and setting some guidelines for spending. For example, before buying something, you may have some rules:

  • Wait at least 24 hours to make your purchase. This will help you avoid impulse buying.
  • Ask yourself, “How will this purchase make my life better?”
  • Can I find this item cheaper? Can I buy it used or borrow it from a friend?

Many of us buy things on a whim. We see it. We want it – now. But being more analytical about your spending can help you spend money guilt-free and enjoy life a little.

The bottom line? Spending isn’t always a bad thing. In fact, spending money on things you really want can make you happy.

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