The other day I got this question from Fiona, a reader of My Two Dollars:
“You always talk about saving money and making sacrifices, don’t you ever spend any money? Don’t you have stuff you want or things you want to do? What good is money if you don’t spend it?”
OK, so it’s more than one single question, but they all ask the same thing…”Are you a cheap bastard?” And the answer is no…we just control our spending, save for what we want, and buy quality over quantity when we do spend it. I spend too much time working for my money to just toss it out the window on a whim, and I like to take the best advantage I can of the money that comes in the door. For us, some things are worth spending money on and most others are not. For example:
Vacations are one thing that I feel are A. important to take and B. worth the money spent. In the past year, we have gone to Palm Springs for a weekend, a week long drive through the California, Arizona and New Mexico, went to Boston and Chicago to visit family, spent a weekend up near Sacramento, and we are headed to Mexico in November for 6 days. Every one of these vacations is (or will be) money well-spent because it gives us a break from our regular lives, gives us a chance to explore new places, and provides memories and experiences we wouldn’t otherwise have. We have a savings account that is set up for only vacation money, and I usually put $50-$75 per month into this account. Over time, this adds up and allows to take these trips with a minimal impact on our finances.
Another thing I feel is worthy spending money on is a nice dinner out once a month or so. There really is nothing like going to a nice restaurant and having someone get everything for you and clean up afterwards too! However, eating out too often every month would drain my bank account, so we limit it and thus can go to nicer places.
When it comes to spending money on work related products, I am a firm believer that sometimes it costs money up front in order to increase your income later. For example, I work from home doing various freelance work…video editing, web stuff, writing, etc etc. Because of that, no one other than myself is going to buy me the equipment I need to be more productive at my job, so it is up to me to decide where my money should be spent to make that happen. So buying the equipment you need, although it can get expensive, is worth it in my book.
One last thing I feel is OK to spend our income on is food. Not the restaurant variety, I already covered that. I am talking about the food we eat and make at home. We buy as much organic and natural food as we can because, well, it is going into our bodies! I would rather give up any and all of my gadgets than eat crappy, genetically modified and man-altered food. Food is what keeps us alive, and my health is worth far more than the latest iPhone, HDTV or whatever. If you can afford both, that’s fantastic…there is nothing wrong with having your cake and eating it too. But food is one thing I will not scrimp on.
That all being said, I think you need to find a healthy balance between hording your money and blowing it all on crap. Fiona is right…what is the use of money if you never spend any of it? The problem people have is that they think they “need” a new TV, a new car, new clothes, etc. when they really only “want” them. Buying stuff you want when you can easily afford it is fine…but buying when you can’t doesn’t make any sense to me. And the opposite is true as well, because if you only save and never spend anything, you might be missing out on some of life’s greatest pleasures such as vacations, good food, and new experiences. So Fiona, there you go and I hope that helps answer your question. I would never advocate wasting your money on stuff you don’t need, but I do think it is important to spend some money on things that make your life better, whether that be your personal or work life. I am not a cheap bastard, I am just careful about where my money goes!