By round of applause, who likes to spend money? Looks like we have a few Spenders in the crowd…
But hang on a minute…that’s kind of a loaded question because while most of us enjoy buying things we want, we may not actually enjoy the entire process. Spending money sometimes comes with guilt or a feeling of shame afterwards…especially if we’ve gotten ourselves into debt.
Based on the amount of debt, stories about shop-aholics and that I can never find a parking spot at the Mall, I believe most of us like to spend money.
Me, I am a Saver…I REALLY enjoy making and saving money and this habit has done me well. So well that I could stop making money tomorrow and still live comfortably for the next 20-25 years on my savings and the interest generated.
And…I still like to spend money (I know, all you Spenders out there that think us Savers just sit around counting our money probably don’t believe that – but it’s true!). I just choose what I spend my money on…and that’s the subject today: How to have fun Spending while continuing to be a Saver (so you can spend money and avoid the guilt that comes with it).
I recently returned from Hawaii. That’s right, Hawaii. I say that because my Spender friends would be shocked to hear that as Hawaii is one of the more expensive vacation spots.
“Okay, you went to Hawaii but did you stay in Backpacker hostels and only eat instant noodles??!”
No smarty-pants, I stayed in a nice, clean hotel right in downtown Kona that was steps away from the ocean, restaurants and the main shopping area. I ate delicious fresh seafood and drank Kona coffee every morning.
I say this in jest because there is a stereotype that to be a Saver and put money aside every year for retirement, you need to live like you’re back in University…with 4 roommates eating only Kraft Dinner. And I’m here to tell you, it just isn’t so.
I live a very enjoyable, comfortable life. I go on vacations to exotic destinations, I buy stuff and I like to eat out at nice restaurants. I drive a new fully-loaded vehicle, I work with personal trainers and I get a massage every couple of weeks. Does that sound like a boring, Scrooge, no-fun lifestyle to you?? So how can you have both – Saving and Spending??
I choose wisely what I spend my money on after (typically) doing my research. Here are some guidelines I use to have the life I want AND build up my net worth:
– I do not buy top-of-the-line name-brand things. In most cases, there is a middle tier item from a reputable brand that costs 30-60% less than the top brand…and often the quality is just as good or better! Example: I do not drive a BMW or Audi or Mercedes. I drive a fully loaded, turbo, new model Kia. It’s got all the features of the higher end models (like a heated steering wheel which is totally awesome on those cold winter mornings), scores higher in independent ratings of automobiles, has a longer warranty and cost me about $30k less!
– I flew to Hawaii on points. I have a no annual fee points credit card and I use it for EVERYthing (and I pay the ENTIRE balance every month). It didn’t take that long to accumulate the points (I make sure I shop at the places that offer extra points – groceries, gas, pet food…I have to buy this stuff anyway so why not get extra points??). I saved $1,200 on the flights (and spent my money on experiences I’ll remember like snorkelling with dolphins and diving with manta rays).
– I wait for stuff to go on sale. And it almost always does…Buying stuff when it first comes out at full price is putting extra profit in the hands of retailers. Now if you absolutely need something right now (and I say Need, not Want), go ahead and buy it. But if you can wait because the planet won’t stop revolving if you don’t have it TODAY, then wait. Almost everything has a season and if you wait for the end of that season, that product will go on sale (because stores need the space for the next season’s stuff). Other stuff, like appliances, furnishings, and electronics have seasons when they go on sale for drastic discounts (Back-to-school, Thanksgiving, Christmas). You can have the same things your neighbour has while saving 25-75% on the ticket price by waiting to buy it.
These are a few of the strategies I use regularly to have the kind of life I love AND continue to build my Savings for the future.
Financial Freedom can be in your control!