99.99% of financial literature is based around how you can make more money. In some shape or form. Whether that’s how to invest and save or ways you can boost your salary and ask for that pay rise!
And if I’m honest with you, for a while there I thought that was all to it. But then it smacked me in the face that our money is there for it to be used – properly. To make us happy and give us joy.
Money is not there for the sake of it. We don’t make money so that we can stare at the number of zeros in our bank account. Though for a teeny tiny % of our population, there are those that invest for the sake of it. They love watching their money compound. They enjoy investing it is a gazillion times more than spending it.
How you spend your money will determine how happy it makes you
But for 99.99% of us, that’s just not true. Money is there to be spent. But how you choose to spend it – that’s the million dollar question.
Yes obvs too much spending is a no-no. After all, we do want (and kinda need) an actual roof over our head. Some space bigger than a 1×1 studio situ!
But spending is a gigantic part of it. And if you can’t spend properly now, you’ll never be able to. What’s the point in making all this money if you have zero clue what to do with it?
Beyond the big financial goals in life like buying your first property and saving for retirement (which is all about spending later on btw!) we’re making money so that we get to spend it.
Beyond the basics, we work so that we can enjoy life. Or at least that’s what we should be focusing on.
And if you’re spending your hard-earned cash you wanna make sure you’re doing it right. That you’re getting the max enjoyment. That you’re squeezing your money. Making it work for you in the best possible sense.
How to go about that? It’s simple and fun!
Spend on loads of different things to see what really does it for you
Figure out what you enjoy. Spend some time (and money) to discover what kind of purchases (or experiences!) make you feel like a million bucks. What things give you that sense of adventure and what gives you that feeling of being drunk on life.
Focus on all of that. That’s exactly where you should be spending your money on. And when it comes to the rest, you can be frugal. Cut back. And say No. But don’t cut back on what you love most. Ever.
How many of you can actually remember what you bought 8 months ago that gave you a feel-good feeling, huh? So many of us spend mindlessly. We don’t put much effort into what we’re spending our hard-earned money on that it’s no wonder we feel a little empty.
That’s not because we need more money. No. More money just means more mindless purchases in that case, if you’re still stuck with that mindset. You’ve gotta be thoughtful about where you spend your money. If you can spend it on the right things, you’ll find yourself in a way better state. Mentally and financially!
Spending is an art. You can’t find an answer on google. Sure chatGPT can give you some clues about where to start but only you know yourself. An AI bot can’t do that for you.
Not all of us know what we like right away. And that’s fine! Spending doesn’t always come naturally. It certainly didn’t happen for me. For some of us it takes time, effort and a lot of wasted bucks to actually get there.
For me, I love books, tech, travelling + skincare products (aka an over-priced brand I am stuck to like glue). It took me ages to figure out I love those stuff rather than a closet full of barely-worn clothes. And yet more shoes. Okay I still love shoes but it wasn’t really doing it for me.
I realised I don’t love designer for designer’s sake. I get scared when I wear fancy things, worried I’ll dirty it or snag it and that took away 75% of the enjoyment for me.
I received a designer scarf as a gift and I wore about 4x before it was stolen. Needless to say I wasn’t running back to the store to replace it! Beyond those faves of mine, I try to not go over-the-top. I cut back on dining out (that extends to deliveroo!), clothing and other bits and bobs.
After all, I’ve still gotta save something! And I plan a few (budget-ish!) holidays each year. I just wanna make sure my money can buy me those experiences and things I love most while leaving some leftover to build my future.
Spending and saving are NOT mutually exclusive. They go hand-in-hand.
Your money is not a bottomless pit. Sadly. Which means spending £1000 on something means you’ve got £1000 less to spend and invest. It’s eating into your future.
But if you set aside a % of what you’ll dedicate to your fave purchases but ruthlessly save + invest the rest, you’ll be okay. More than okay actually.
Most of us are already spending a big chunk of our paycheck on gd-knows-what! It’s time you direct your money to where it needs to go. To where you want it to go.
Money is a very observant servant. But it can also be a powerful master. Make sure you show ‘em who’s boss!
Especially now that inflation is still where it is (ahem, 10%+) and bills are billing us in the eyeballs. You wanna be strategic about how you spend your money. To make sure the right things are getting your money attention.
Here’s a super easy 3-step process to help you figure out how to best spend your money!
#1 Put your spending under a microscope
Or an X-ray.
Whatever helps you see exactly what’s going on!
Look at all your discretionary spending. See what you’re spending month-to-month and ask yourself if that’s really doing it for you?
Tally up how much you’re spending on “extras” and whether that’s too much or too little. (Yup, that’s a thing.)
This will help you see what areas you can cut back on to give you more bucks to spend on what you love. But if you have no clue what you love spending on, #2 is for you!
#2 See what stuff is doing it for you and what is NOT
After the lovely activity of looking at your spending, see what really did it for you. What purchases or experiences really made you feel wowza. Gave you that pick-me-up or whatever else you were after. And see what stuff felt a bit meh. The “meh” stuff – cut it out like a tumour. If it’s money not enjoyed, it’s money wasted.
Then experiment! Aka the fun part. Play around with a couple hundred quid. Nothing mad. Try cool ways of spending. Try things and see what works. Go to a spa, get your nails done (actually don’t – the fumes are dangerous.), go out for brunch, dinner whatever.
Go on a budget trip or try biz/1st class! Depending on how far you wanna take this experiment! By the end of it, you’ll soon start to see a) what you really love b) what you like and c) what does nothing for you.
The stuff that does fits in the 3rd bucket – don’t waste your money on that. It could be things like takeouts or taxis but whatever it is, you’ll wanna keep those to a bare minimum. That way you have cash to spend on the stuff that makes you buzz!
#3 Direct your money from where it is to where you want it to go
Figure out a % of your salary that you’re spending on your extras. The ones that you love. The kind of stuff that will help you enjoy your money to the max.
It should not be more than 30% of your salary but obviously the lower the better. If you look at the 50-30-20 basic rule of budgeting it says that 50% of your salary goes to the basics, 30% to the extras and 20% to investing/saving.
I think the 30 and 20 should be switched around but that’s just my opinion! The more you can save the better off you’ll be but you’ll still be enjoying your money today.
Which is why it’s so critical that you figure out what you love.
You’ve worked hard for your money. You should be enjoying to the max every step of the way.
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.