What I got wrong: Spending Money

This is my new series, exploring experiences and ideas over the course of my life in order to see if those same principles hold true or not. Click here to see my previous idea!

When I was 8 years old, I bought a football-size ceramic piggy bank to save all of my money. The plan was simple — save all birthday money or any time money was given and save it to purchase a house. At a young age, I knew ownership of assets was important, but I was foolish in thinking it would be that easy. I was also foolish in not spending money on the right things like field trips, gifts for dear friends and family, and for personal health. It wasn’t enough to label as “being cheap”, I was obsessed with saving every single penny and limiting every single option if it meant I could save just a bit more. I saved for a whole year and accumulated around a couple of hundred dollars, and the result? We used it to fix the family home, and I had to start back at zero. What I worked so hard for, sacrificed for was gone within a moment and I had no say in the matter. I don’t regret helping my family, but the lesson of spending money to make memories, save time, and learn how to spend money would not come until late in my adult life.

My history of spending

We’ve repeated the mantra of “save for tomorrow” to many, and we’ve probably learned it from our parents, but we don’t exactly learn how to spend our money. By spending, I don’t mean throwing it towards material objects or letting it go by impulse. I specifically mean spending money to give you more time, freedom, and leverage.

One of the biggest moments in my life when I realized that lesson was when I learned to invest. I was skeptical of course, how is it possible that I could have my money work for me? How could I make money when I’m not working? I was around 25 years old at the time so the concept of not being there and still making money was foreign to me1. The size of my eyes when I read the financial statement that I just made $30 dollars from dividends and from the stock going up in price was one you see in those looney tunes shows. Granted it wasn’t that much, but seeing how I could make money this way was a game-changer. What if I added more money to my portfolio? What if I did more research and chose the right stocks? I realized that my goals of financial freedom could now be attained.

My biggest problem with spending money was making sure there was a tangible benefit to spending money. If I couldn’t see the benefits in front of me instantly, it wasn’t worth spending the money. Some examples include spending money on a good pillow or paying for a seminar to improve my skills. I thought very short term because I wanted my money to provide instant gratification. I realized that if I wanted long-term benefits, I’d need to have long-term habits. If you spend money strategically, it actually aligns you with your goals or helps makes it easier to get to that path.

How to spend

Now to answer the question, how do you spend money? Of course, we aren’t trying to throw money away by indulging in instant gratification nor are we just saving up to spend it all in the long term. It’s best to examine what our goals and aspirations are and then budget accordingly. I don’t think we spend enough time sitting down and figuring out what’s worth allocating capital to. Some things are automatic like bills, loans, food, etc. so that’s a sunk cost that will always be taken out of your paycheck. But let’s focus on the things we can control like disposable income, and the strategy we use to purchase things that we need, to name a few.

If you want to save more money to invest, perhaps it’s time to see what can be modified to increase your disposable income. In my case, it was cutting back on eating expenses and making meals that were not only nutritious but a fraction of the cost. Ground beef with broccoli or rotisserie chicken and onions were some of my choices. Sure, it was boring, but it saved me a bit more money to focus on my goal which was to use that extra money to invest or spend on things to help me build my skillset. I find that small medications work best and going cold turkey isn’t great for building habits. You want to be able to build positive habits for spending money since this is a long-term project. But if you are able to go cold turkey, don’t do it at the expense of your health. I had a friend that refused to buy new pillows and a bed so he could save money, but ended up having to go to physical therapy for his neck and back issues.

Is it worth the cost? Sometimes it’s hard to find out, but that’s where we can use first principle thinking to explore if it is. Let’s take biking to work so you can save money on gas, car insurance, and the upkeep of having a car. If you work closed to work that may make sense, but if you have kids or have recreational events that may not work out to have a bike. How about a moped? If your job requires you to look “professional”, it may not be worth saving a few bucks. How about catching the bus? If you know that you’re someone who doesn’t like being reliant on the bus driver, it’s probably not worth the emotional stress. You’ll go down the list and argue for both sides. The key is to detach and not favor any options. This is just one example out of many that you can do. Yes, it’ll take some time but if we think of it 5–10 years down the road, if you save $100 per month, that’s $6000-$12000 and now that’s a sizeable number.

Keep redefining how you look at money

As you continue to learn about your spending habits and your life changes, your take on money will change. Costs will inevitably come and go, and you’ll be forced to spend money on things that are out of your control. After you’ve appropriately spent or saved your disposable income, if you have extra, experiment with spending money on things that make you happy or make your life easier. I did so by buying plants2, and it’s made a big difference in raising my mood. I also got a lot of mileage from buying an adjustable desk to do work or store things on.

With some discipline and goals on spending money, I no longer have any guilt about spending or not spending. My only exception is when I’m on vacation, no limits in order to fully enjoy it and to make lots of memories. Saving money is great but we shouldn’t forget the benefits of what spending does for us as well.

Until next week,


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1. 25 years old is kinda late, in my eyes, to start investing. Of course the sooner the better, but it’s better to start it than to never start one. Doesn’t matter if you’re 80 years old or 30.

2. I also got addicted to buying plants and bought a lot of them (of course, this was with the money I wanted to experiment with). You can read about it here.



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