Use Your Money Well
Posted by Gail | Filed under Balance
So you’ve balanced your budget, paid off your debt, and you’ve got your emergency fund stashed away somewhere safe. You’re saving 10% for retirement, you’ve got the kids’ educational savings set up, and you’ve established some goals for yourself to which you are working together with your partner. Life is good.
You’ve just gone over your budget and realized you have a bit of cash left every month and you’re trying to decide what to do with it. Sure, you could boost your savings even further, but you’re thinking maybe there are better things you could do with that money.
Like buy a big screen TV. Or a new car. Or a whole bunch of new clothes.
Now hang on a sec, before you go acquiring (which is fine if that’s what you really want to do), think for a minute. Are there some things you could DO with that money that would increase your happiness factor?
Like what?
Well, like having some fun. If you’ve been single-minded about balancing your budget and creating a sound financial foundation, you may have forgotten just how much fun FUN is. What do you love to do? Maybe you miss hunting through flea markets with your best friend, sipping coffee with your sister or experimenting in the kitchen (my funnest thing). Haven’t been skiing in dogs’ years? Want to make that new quilt you’ve been talking about but reluctant to shell out money to start? Hey, this may be the perfect time to do those things that bring you joy, teach you something new, or let you share with someone you love.
Using your money to strengthen bonds with family and friends is a great way to increase your happiness quotient. Studies have shown that close relationships have a lot to do with how happy we feel. So maybe it’s time to spring for a trip to see your old high-school chums or university roommate. Or you could offer to bring your sister and her family to your place for visit. I find saying, “My treat” let’s people who are themselves financially strapped consider doing things that they’d love but simply couldn’t afford.
Using your money to reduce your stress is also a good “investment.” If you and your partner are working hard, busy with the kids, and can’t find time to do the vacuuming, maybe spending a little of that extra money to come home to a clean house will be worth it to you. And if you’re tired of yelling at your mate to get the garage, the basement, the shed cleaned up, hiring someone to do the dirty would eliminate the need to nag.
You could also take some of that money and spend it on someone else. Making other people happy has this fabulous rebound effect. If you could help ease someone else’s burden, or just bring a little unexpected joy to another’s very difficult life, the gift you give will be returned to you in spades. Would you child’s teacher appreciate a gift of some new books? Would the elderly in the local home appreciate a bunch of new movies to wile away their countless hours? How about building a treat basket for less well-advantaged neighbours and leaving it on the doorstep with a note that says, “I’m having a great day, hope you have one too!”
Whatever you decide to do with your money, it should be something that will truly make YOU happy. Never mind what turns anyone else’s crank, this is about using your money to fill your life with joy. Figure out what makes you happy, and then use your money to fill your life full.
January 25, 2010 at 8:02 am
I invest a little out of every paycheck so that I can go to Holland every 2 years to see all of my extended family…I started this in 2006…the last time I had been to Holland before that was 1982!!…I am making plans now to go in June of this year!…I willingly give up all sorts of other things to afford this trip…for my husband, it’s his gym membership…no matter how tight things got we always had that money…the gym has always benefitted him and he really enjoys it…money well spent…for both of us!:)
January 25, 2010 at 8:15 am
once the debt is paid off I know there is a few things I’ll be wanting to spend some money on. most of it will be fun and most doesn’t cost much. Which should leave some room for savings.
Regards,
Jason
January 25, 2010 at 8:46 am
We had gotten our ducks in a row last year and were able to spend some money on things we had wanted for a long time. A piano, a pool table, and a digital camera. All three give us hours of enjoyment. We still have a healthy EF, and honestly, I can’t think of anything else we’d want.
We do lots to ‘treat’ others, and I am often looking for ways to help charities, etc out. One thing that is consistent is my help for the local humane society.
January 25, 2010 at 8:51 am
I set aside enough funds to take my siblings out to lunch on their birthdays; to purchase art supplies for my landscape painting hobby; and every month 20% of my pay goes into a self-funded sabbatical – which I take every 5th year.
January 25, 2010 at 9:13 am
I’ll answer one of the questions in the second-last paragraph: Would you child’s teacher appreciate a gift of some new books? YESSS!!! Please! Given the wiiiide range of abilities in one class, a teacher can NEVER have enough books in the room, fiction, non fiction, easy reading, more advanced, magazines, picture books and graphic novels (especially in older grades)…to get more bang for your buck, give them $$ (not the actual books) b/c if they, as teachers, order from certain companies, they’ll get points towards even more books.
January 25, 2010 at 10:08 am
How timely! I hit the mountains twice with my snowboard last week. This weekend will be spent reacquainting it with the snow in Fernie. And I’m now saving up to send my parents on a vacation back in our home country for a couple of months. (I must admit to an ulterior motive here: Hopefully the trip will dispel any of their fantasies of retiring there. It would be easier on my bank account if they did, but I’d prefer to have them close to me.)
January 25, 2010 at 10:29 am
Great advice Gail. Thought you and others here might enjoy a blog I’ve been reading lately, about figuring out what makes you happy (what’s fun for me isn’t always fun for you, and vice versa, and pleasure and happiness are not, in fact, the same thing). Google “Happiness Project Blog” by Gretchen Rubin. I have have no affiliation with her whatsoever, but your blog and hers are ones I read every morning to kick start my day. “I’m having a great day, hope you have one too!”
January 25, 2010 at 11:35 am
Good advice to ponder. Sometimes I think sitting on my money is what makes me happy, but that’s because it’s been so long since I went out and had any real fun that I’ve forgotten what having fun really is… must work on that.
January 25, 2010 at 11:54 am
Great post Gail! I wish I could treat others more right now, I do try to help others out when I can. I think it’s important to treat yourself and others WHILE you are paying off your debt as well. Otherwise life would get pretty negative and stressful.
I’m sure I would be close to debt-free now if I said no to everytime someone wanted to go out, or never bought myself toys, but I think life would be a lot more boring. It’s important to keep up the connections you have with people.
I love the idea you were talking about of surprising people with gifts (teacher, retirement home, neighbour). Even just your partner or friend, give them something that says I was thinking of you (something you baked, made, a card, take them out, etc). It’s fun to do for both the recipient and yourself!
January 25, 2010 at 12:42 pm
Gail those are wonderful suggestions, fun that has a lasting impact rather than a short term high and then buyer’s remorse.
Back when a had a very nice disposable income I loved going to the bookstore or paper craft store and just buying whatever I wanted. I still read those books now (while I have practically zilch as a disposable component of our income). And people tell me that sometimes my cheerful letter is the only bit of happiness they got that day in the mail. So both of these fun things have kept on giving.
January 25, 2010 at 1:15 pm
Sorry, I already set $ towards fun stuff. Next pay increase (last one for a long while, I guess) will go towards critical illness insurance. Got to get it before something comes up and I don’t qualify! I’ll see how much coverage I can afford.
January 25, 2010 at 1:42 pm
I LOVE your show, Gail, I watch it whenver I can, even the reruns!
I am setting aside enough $$ so my family can go to Disney in 2014 when my boys will be old enough to remember the trip. If you set up a savings account through ING Direct, they have a “Goal” calculator which will help you figure out how much you need to save and help you keep track of your savings as they grow. We’re saving up money to buy a new house too, and the ING Goal calculator is great for that too!
Gail
January 25, 2010 at 2:01 pm
Sparky, what a lovely thing to do for your parents, even if it does have other motives! lol
Amelia, how nice to hear that someone still writes letters!
I’m hoping as I free up money that I will be able to occassionally go away for a weekend, or go to the theatre without feeling guilty about it. I also enjoy spluring on the occassional art supplies or cooking gadget. I love buying little things to decorate my home for various holidays.
January 25, 2010 at 2:33 pm
I love that once the bills are paid and the debt is gone you advocate for people spending money in ways that work for them. I think that way too many financial ‘experts’ try to convince us that one thing or the other will make us happy. The truth is, there is no single answer, just as there’s no single answer for what leisure activities people enjoy or what food they like. It’s very liberating to know that I can come up with my own answers for how to spend my money and make myself happy, as long as I do so responsibly.
January 25, 2010 at 3:08 pm
Right now we put money into a travelling fund every month. Even though we are only putting $100 a month into this fund so therefore it doesn’t allow for alot of travel but its all we can afford right now. I look forward to after the wedding when our budget can get back to normal and we can increase our “fun fund”
January 25, 2010 at 3:43 pm
Right now is our dreaming time. In three years we should be debt free (even with a one year mat leave) and then a world of possibilities will open up!
What to do with the extra cash will be up to us and we can have some real fun with no justifications or regrets!!!
January 25, 2010 at 4:32 pm
Fantastic post Gail. My favourite “fun” purchase since getting in a better financial position was a subscription to the local professional theatre. It’s something DH and I both enjoy a lot (which is rare) and it’s been fun to have monthly date nights set up way in advance. It keeps us close and having fun together-a relatively small investment with big dividends (a happy marriage)!
January 25, 2010 at 4:37 pm
Should I wait till after ALL student loans are paid off to have fun? Both my husband and I went to graduate school and are slowly paying it down. We’ve paid $30k in 4 years and have another 60k to go. So tired of waiting to have any fun.
January 25, 2010 at 4:57 pm
I am forgoing a lot lot of small indulgences this year: dinners out, adult beverages, new clothes, stretching out getting my hair done (I look like a reverse pepi la peau), movies in theatre toward 3 very major goals this year (beides paying down my debt and saving of course). One is a cruise to celebrate our 40ths with my two best friends, two is a trip to Jasper with my family this Easter and three is a fancy smancy party to celebrate my fortieth, my Mom’s 65th and my 5 years cancer free. These are all things that will contribute greatly to my satisfaction and happines. All the more so because I am sacrificing the small things to get there.
January 25, 2010 at 5:48 pm
Robin:
Reminder: Gail always includes one entertainment jar!
It looks like you have a way to go before being done with your student loans (debt fatigue is annoying). If you want more fun money, get a second job and use the money exclusively for fun stuff. When you are at that job, remind yourself of the purpose.
January 25, 2010 at 6:12 pm
@Robin You can save to have fun when you’re still paying off debt…so long as you don’t incur more debt to pay for it. With that much debt in front of you a binge might happen if you don’t give yourself something fun.
Just as a suggestion though, think about what you want – save up and get the most from it. I love to travel so saved up and went on a few small trips. I could have used that money to pay down debt but having a nice short term goal to save for helped to prevent me from shopping for things I didn’t need.
What ever you enjoy you should find a way to enjoy and maybe explore fun that is easy to do on the cheap
Great post Gail. I am getting to this point (car will be paid off in about 3 months) and then I just need to keep building my EF but really I have money that I can spend guilt free so maybe I just need to think more about what would give me real pleasure.
January 25, 2010 at 7:29 pm
VJ..congrats on a year of milestones. Enjoy your celebrations!
January 25, 2010 at 7:36 pm
Hmm, never thought of saving 20% a year in order to have an every-5-year sabbatical. I like it!
January 25, 2010 at 8:33 pm
I always find it easier to save for something if I have a goal in mind. Travel is my weakness and I pretty much travel every year. I would give up all the shopping in the world to be able to travel! But only recently have I stopped putting fun stuff on credit cards and paying cash instead. It means I have to work a little harder, but my discipline in saving for the fun stuff has also helped me to be smarter when it comes to paying down the debt.
For those of us who aren’t quite there yet, I do think even having small bits of fun is important as long as debt isn’t incurred doing it. It helps push you farther in the long run – and you appreciate it more when you work hard for it.
January 25, 2010 at 8:45 pm
This is a great reminder to cut yourself some slack and enjoy a few little treats when you’ve covered the big bases. I find you get so focused on cutting expenses, making frugal choices and keeping your eye on whatever end goal you’re working toward that you can forget to have a life in the meantime, or forget how to relax and spend on the fun stuff once the debt is gone.
My passion is travel. I’ve been known to scrimp and save to the point of ridiculous on virtually everything else and then spend a small fortune on a trip. It would be hard to justify to anyone who isn’t also mad about travelling.
We’re down to just the morgage, but still saving like mad people so we can pay that off and retire a little early. Sometimes my husband shakes his head and laughs at me having a mental struggle with whether or not to buy a second coffee in one week. Apparently I really need him to force me to take a reality check every now and then. I can justify spending the money on a trip, but a relaxing enough to enjoy a tiny little treat gives me fits. With me there’s no fear that one treat will lead to a massive spending spree, so I really do need to reevaluate a little. It would be awful to get successfully to our early retirement and then find myself unable to make myself relax the purse strings enough to enjoy it.
January 25, 2010 at 10:11 pm
Great to see so many have their ducks in a row..and ponder what to do with extra over and above the EF fund. Just entered the 30’s last year so maybe this is why we’re still lining the ducks up. Not sure if the other poster are 40+..but right now we are literally saving our pennies & workin’ off debt. Cheers to those enjoying the really good life!!
Def’ something to look forward to.
January 25, 2010 at 10:26 pm
We now put money aside every pay for vacations. For the first time in 7 years we are heading for a nice warm Caribbean vacation this winter. And it’s all paid for before we even set foot on the plane and our spending money is also set aside.
My mother downsized into an apartment and I realized she did not need, nor did she want anymore stuff. In fact, she got rid of a lot of the stuff we gave her over the years when she moved (originally I was quite hurt by that then I realized it was just stuff…). So I now take her for a nice lunch or dinner and the theatre or a concert instead for those birthdays, christmas and mother’s day gifts. It actually costs me more money (because I pay for us both) so it means saving longer but she likes it so much better and we spend time with each other.
I also added another charity to my “sharing” envelope this year – a monthly donation to the Humane Society.
January 25, 2010 at 11:04 pm
My vacation is always to watch the Olympics – it brings me more than fun than anything. I just heard Clara Hughes today on the radio talking about the Olympics and her favourite charity – Right to Play which uses sport and play to help kids in war torn regions and just countries where the kids aren’t kids any more. I decided to use my extra money to donate $10 for every Olympic medal Canada wins. It will make cheering even more fun, support Clara Hughes who is my hero, support a very worthwhile organization and give me a great tax receipt for next year!
January 25, 2010 at 11:18 pm
Every month for the past few months , I’ve purchase another copy of Gail’s new book and give it to someone who I think would benefit. I think of it as a gift that keeps on giving, kinda like the Energiser Bunny!
January 26, 2010 at 2:35 am
Trying to take all of the extra money that is saved and used towards travel. Nothing large, maybe 2-3 days in Chicago, but since we did New York last year I caught the travel bug. Big time! Can’t wait to think about where and when to go this year, and the year after…..not on credit of course.
January 26, 2010 at 10:56 am
After all these automatic transfers my husband and I set up we forgot to think about what happens to any extra we have lying around.
We decided since we have a vacation fund set up we won’t use the extra money for more travel (even though we love the idea of travelling more — like many others that have commented above!). Instead we are going to set up a once a month date day or a “family” day where we just get to spend whatever is left over or building memories — ie. a tobaggoning day, high tea at an upscale hotel etc.
Thanks for reminding us to enjoy life, Gail
January 26, 2010 at 3:48 pm
I’m a thriftaholic and spend my life at yard sales, thrift shops, eBay and Craig’s List. I don’t need a $4000 bag to make me happy. I’m perfectly content with my silver Sportsac that I scored on eBay for 12 bucks. I do, however, splurge on things that feed me emotionally – like the occasional meal in a really great restaurant or tickets to a fabulous musical.
We all have our priorities!
February 4, 2010 at 11:46 pm
[...] Gail Vaz-Oxlade has some excellent tips for spending money in a meaningful way. [...]