The central theme to personal finance is simple – spend less and save more. This is sound advice to be financially successful. However, there isn’t a lot of guidance on how to spend money wisely.
Believe it or not, there is such a thing as saving too much money. It happens when you save too much income for the future that there is nothing left to enjoy your life now. At Fortrove, we build plans that evaluate your competing priorities to save for the future while enjoying your life today.
Spending is Not a Problem
Spending money isn’t bad. Keep in mind that money is a device. With this device, we can have experiences we love and live the life we want. The problem is too many people don’t spend money in a way that brings them lasting joy.
This may not be obvious, but we have a lot of emotions tied up with money, and this causes us to do some rash things with our cash. For example, we spend on things that we think will make us happy, but they don’t. We have buyer’s remorse, or develop unhealthy money mindsets.
How To Use Money To Your Benefit
Like any tool, you can use money to create some amazing things in your life. On the other hand, you can use it to work against you.
The device never changes, but how we use it does. Personal finance rarely teaches you how to use money well. Typically, it’s focused on not using it. You hear many themes of spending less, saving more, or putting it away for a rainy day.
What we need to learn is how to spend money better. Here are some tips on how to do so.
Get Clear on Your Core Values
What matters most to you? If you don’t know your monetary priorities you won’t be able to make sound decisions. What is more important to you? What are your core values? There are many examples of core values, and here are some to get you started – adventure, compassion, knowledge, etc. A core value aligns with who you are and you cannot live without it.
It may take some time to get focused on your core values so give yourself some space to think and reflect on them. Moreover, you can speak with those you love and respect and talk with them about your core values. To organize your thinking, draw them out on a piece of paper and then rank them by priority.
Align Spending Money With Your Values
Once you have clarity on your values, you can align your spending with them. Spending money well becomes much easier. When thinking about spending on something, ask yourself, “Does it align with my values?”
Remember that personal finance is personal. What matters to you may seem frivolous to someone else. Neither of you is wrong because the spending matches each person’s values.
Money Goals Won’t Make You Happier
Many people I talk with really believe that once they have more money, buy a new shiny object, or have X amount of dollars, that they will be satisfied. After working with many clients to develop strategies for them, I’ll tell you a secret – this isn’t how it works.
If you are unhappy now, more money will not eliminate the source of your unhappiness. This is true for everyone – even famous people you see on the silver screen. Given that you want to spend better, you must be aware of statements like, “Once I have B, I will be C.”
If you’d like to chat about spending, saving, or other money matters, please feel free to set up a free consultation.