Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things. Isaac Newton
I write a lot about saving, investing, markets, taxes etc. It is often complicated, dry information. Easy to grow weary of it all. This quarter I am writing something different that should help you spend your money and enjoy it! That sounds good doesn’t it?
I recently came across a great read called Happy Money: The Science of Happier Spending by Elizabeth Dunn and Michael Norton. They are two academics that use behavioral research to explore the ways that spending satisfies versus spending that disappoints. I really enjoy this topic as my brain is easily confused by our modern world and appreciates some advance understanding as to how I should spend my money. The authors lay out five ways that spending (like a Snickers bar!) satisfies:
- Your experiences are much more satisfying than your material possessions. We love to talk about our travel, our sporting events and our golf games. We relive them again and again. Plus we can spend months planning for them!
- Remember the saying “too much of a good thing”? It’s true – too much money, too much ice cream, too fast a car – it’s not good! Too often the initial excitement quickly wears off and we are left feeling low. Think about how many lottery winners lives changed with the influx of cash and are now unhappy.
- Investing in your own time – do it every chance you get! Nothing is more valuable. My intention at Westfield Financial Planning is not to retire. Rather I am building a firm and staff that allows me the freedom of having my own time. “My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.” Steve Jobs
- When our kids were babies we had no money. Each January the holiday bills would roll in and we would be surprised by what we spent. It is better to Pay For It Forward. So if your travel agent offers you a deal to pay for your trip months ahead of time – DO IT! You’ll enjoy months of anticipation, you’ll enjoy your trip that much more knowing you paid for it months ago at a discount and there will be no buzzkill of paying for it after you’ve returned back home.
- Spending on someone else is more fun than spending on yourself! Ouch – really? Are you sure? I believe there is truth to this statement. Think of this as the Family or Friend License to Spend. Plan an extended family adventure, a trip with the grandkids or maybe a high-school or college reunion. Many a family trip to Disney or Jersey Shore house rental was paid for under this license.
The book is an easy 224 page read based on legitimate behavioral finance/psychological research.