This isn’t my typical article. Normally, financial professionals (myself included) will tout the same story over and over again…SAVE, SAVE, SAVE! For many, these words of wisdom fall on deaf ears and an astounding number of people choose to save absolutely nothing. For others though, this message instills a fear that actually causes them to save too much!
9 Reasons You Should Spend More Money
I would put myself in the camp of extreme savers (25 Examples of My Extreme Cheapness). I hate debt. Earning money is a game. And my net worth growth always puts a smile on my face. It’s almost a sickness – this extreme saving mentality. It’s not a horrible thing (since we that have this sickness never really have to worry about money), but it often handicaps us in our relationships, our social circles, and even our spirituality.
For those of us that have trouble spending money, take a look at the below reasons for spending. There aren’t just one or two reasons to spend more money – there’s nine at the minimum! If you’re on track to millions of dollars in your retirement, loosen your grip a little and spend more money.
Yes, saving money is important, but there are so many other things that should be on your list of to-do’s. Life is short and the world is large – go explore it!
Think about it. Would you rather be the man on his deathbed that says,
“I’ve gone nowhere and experienced nothing, but I have saved up millions of dollars”?
Or, would you rather be uttering this phrase as your time came to an end…
“I’ve experienced much, traveled the world, and seen so much beauty in God’s creation. I may not have millions, but I’ve always been thrilled to live the life of my dreams.”
If you know that you should spend more money in your life, you might want to start on travel. There’s so much to see and so much to experience, so you’d better not delay. Spend more money today!
2) You’re Saving Too Much as It Is
It doesn’t happen all that often, but I have met a few people that are saving far more than they even realize. They’ve been scared by the message of SAVE, SAVE, SAVE, and they end up putting 50% of their earnings into investments or straight into the bank. If you think you might be an accidental extreme saver, take a moment and write down where your money is going. For many extreme savers, the monthly spending looks something like this:
- Mortgage/Rent – $500
- Food – $150
- Clothing – $20
- Utilities – $100
- Gas – $100
- Phone – $35
- 401k – $700
- Roth IRA – $600
- Early Mortgage Payoff – $500
- Rental Property Investing – $500
They have far more money going toward appreciable assets than they do anything else. When you set up your budget like this, you’ll end up with far more money than you’ll ever need – something like $10-$15 million compared to the $2.5 million that would allow you to live quite extravagantly compared to the life that you’re used to.
Many millennials are getting on the kick of saving 80% or more of their income so that they can retire by the age of 30, like Mr. Money Mustache, but I don’t believe this is all that it’s cracked up to be. Basically, to retire extremely early, you have to live super cheap, save up a ton of money, and then live on a restricted budget for the rest of your life. That really doesn’t sound like much of a retirement to me.
Heck, instead of doing that, why not use some of your beefy income to actually enjoy it today? There’s a novel idea. I say you should spend more money on vacations to the mountains while you can still hike, climb, and move without breaking a hip or going into cardiac failure. Extremely early retirement is fun for some, but not for most. Spend more money and enjoy yourself today while your body can handle it!
Don’t delay pleasure if you don’t have to. After all, you never know what tomorrow might bring.
4) Spending Is Fun
Let’s be real. No matter who you are – an extreme saver or a veteran spender – you have to admit that spending is fun. If you were given $1,000 with no strings attached, what would be more fun:
- driving to the bank, getting out of your car, walking to the teller and saying, “I have $1,000 to deposit in savings.”?
- OR going to straight to the airport, buying a ticket to Sanibel Island, and laying on the beach watching the dolphins play?
I don’t know about you, but laying in the sun on the beach sounds WAY more fun than standing in line at the bank. Spending is FUN! Don’t kid yourself. Yes, we have to be responsible with our spending, but if we have the means to spend money, why not enjoy ourselves and burn some dollars here and there? We could buy some cool stuff, book some travel, or choose to get pampered for a day. Whatever it is, you might just want to allow yourself to spend more money from time to time.
Sometimes being an extreme saver can make people a nervous wreck. No matter how much money they seem to have, the more they worry that they don’t have enough. The worry is constant and it’s killing them from the inside out. If they simply understood that they could stand to spend more money, the fear would subside and it could actually make them healthier for two reasons:
- Fear is no longer crippling them and therefore not causing damage to their body
- Spending money on healthy foods and habits will enable them to live a longer, more productive life
If I wanted to live super cheap, I would spend no money on anything but the essentials. Plus, I would likely buy unhealthy processed food because it’s typically cheaper than the fruits and vegetables in the produce department. This lifestyle might lead to a lifespan of approximately 60 years – mostly due to my inactivity (after all, recreation is expensive) and my unhealthy eating.
Now, if I actually allowed myself to spend money, I’d likely buy a gym membership, cross country skis, running gear, and camping equipment – all the items that would enable me to move and be healthy throughout all seasons. On top of this, I would buy more fish, organic vegetables, fruits, and salads. My grocery bill might double and my recreation spending could be a couple hundred bucks a month, but I also might live to 80 years or more – all because I was willing to spend money.
6) Buy More Quality Stuff
There are some instances where if you spend more money, you’ll actually save more. Buy a cheap DVD player, and it will likely provide a sub-par viewing experience and last for a year. Spend double the money and you will actually experience a better movie, PLUS it might last five years instead of one year. In some instances like these, when you spend more money, you actually spend less. Don’t be afraid to spend more money on quality items when it actually makes sense to do so.
7) To Insure Yourself
If spending money is difficult for you like it is for me, then you probably hate to spend more money on insurance. It just seems like such a waste doesn’t it? You repeatedly take money out of your account and send it to some agency time and time again, only to never receive a penny. It’s all for some unknown accident that might never happen!
But insurance is necessary, ESPECIALLY when you grow your net worth into a fortune. The more money you have, the more likely it seems that it can vanish in an instant. Disease, a money management mistake, or a greedy soul that’s looking to sue the pants off a millionaire – these are all items that could reduce your great wealth to pennies.
When it comes down to insurance, don’t worry so much about the dental and vision insurance, those won’t hurt your pocketbook all that much. Focus on the auto insurance and the business insurance – these are the areas where a lawsuit could cause you to lose everything.
Spend more money on protecting yourself. If ever the time comes when you need it, you’ll certainly be glad that you splurged on the insurance.
If you’re looking to spend more money but aren’t sure what to do with it (after all, you’re over-invested as it is), then put it into your house! Upgrade your kitchen, add a rec room, or put in a pool.
As you’re spending this money, remember that its sole purpose is not to increase the value of your home – it’s to increase your pleasure! If you really like golf, turn the basement into a huge putting green. I mean who cares?! If you’re going to live in the house for a while, make it your own. You’ll have way more fun that way.
9) To Impact the World Around You
Have you ever counseled someone and gave them incredible advice that you haven’t even taken yourself? This happened to me the other day. A young lady I know had absolutely no trouble saving money, but didn’t really like to spend it or give it away. It wasn’t that she was opposed to either one, it just wasn’t her initial response when given the choice to save or give.
I had recently read the book, “The Legacy Journey,” by Dave Ramsey. I expected that this book would instruct me how to grow amazingly wealthy now that I was out of debt, but instead, I learned that I needed to soften my heart and give to a world that’s desperately in need.
My advice to that young woman stemmed from the powerful pages of this book, and it’s advice that I will soon take myself as well:
“God has blessed us with the ability to earn far more than we’ll ever need. He has essentially given us all of our wealth and allows us to keep 90% of it for ourselves and only asks for us to pay it forward with the remaining 10%.”
When we relinquish the ownership of our money, it becomes much easier to spend it – especially when we feel lead to give it to someone else.
Train Yourself to Spend More Money
It’s one thing to know that you’re a natural saver. It’s another to hoard all of your money for really no purpose at all.
Light is a powerful thing. Just a single bulb can illuminate an entire room. But, if it is covered up the room goes dark in an instant. Money has a similar power. It can do great things if it’s put to use, but can have no influence if it’s simply stored away.
Spending money is not a bad thing. I hope you’ve grasped that over the duration of this article. If you are an extreme saver that needs to spend more money in order to lead a healthy life, I would advise that you do one thing….
Spenders budget so that they actually save money. Savers need to budget so that they actually spend it.
If a saver doesn’t set up a budget for themselves, they’ll naturally spend only $150 on groceries for the month and never go out to eat…EVER – simply because it’s unnecessary and seems like a waste of money when there’s perfectly good food in the refrigerator at home.
BUT, if this extreme saver would actually create a line in their budget that says, “Eating Out: $50”, they have just given themselves permission to spend the money. PLUS, they can see at the same time that even with this unnecessary expenditure, they are still saving $1,450 of their hard-earned money for the future.
By budgeting for your spending, it suddenly becomes easier to hand that money to someone else. Need to learn how to spend more money? It’s just that easy. Create a budget and you’ll soon be semi-normal with your spending. 😉
Do you need to spend more money? What will you choose to spend it on?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.