So I’m sitting here pondering the purpose of money and how it fits in the world. My conclusions? When it all comes down to it, money is meant to be spent, but we should be selective over what we spend it on.
Let me elaborate. For me, I’m a fairly frugal person who does not like to waste things… food, clothes, energy, material things and especially money. However, I believe that spending money has its place as well.
I believe in using money on things that provide “value”. I’m not talking about Warren Buffet style investing, or even buying things on sale. By value, I mean buying things that make your life better, or as Derek Foster would put it, life enhancing purchases.
That’s why I go skimpy on things that don’t bring me long term joy and spend a bit more on things that do. “Value” will have a different meaning to each and every single one of you. For me, an example would be my home. We spent a bit more on our home as it was located in a great neighborhood for family. For us, it was more important for our kids to grow up in a safe environment zoned for good schools than it was to save the extra money of living in a smaller/less expensive house.
I also put a lot of value in health. You can’t put a price on eating healthier food along with regular exercise. Even though the gym costs me money on a monthly basis, I enjoy working out in a gym and the health benefits are a bonus.
I sometimes get caught up in net worth building, whether it’s finding ways to make more money or ways to reduce our expenses. In the big picture, money is neutral, it’s neither good or bad. It’s simply the currency or tool used to trade for other things that you want/need.
So the next time your working on your budget, keep the items that make you genuinely happy, but cut back on expenses that don’t enhance your life.